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Loan Modification In New York: Restrictions and Denials

Loan modification basically refers to a new agreement with the lender seeking changes in previous terms and conditions for affordable repayment. It is an addendum to the original loan having a purpose for avoiding foreclosure in case of financial struggling or inability to keep up repayment options. This process is also beneficial for lenders in some cases as government provides incentives to them on being agreed to loan modification. The expiration of the federal Home Affordable Modification Program brings relief for struggling borrowers in terms of financial hardships. Loan Modification In New York is defined as a sacrifice of any sort of material term. Whatever term the loan may have, modification changes several factors including interest rate while forgiving principal payment. At the same time, it extends the final maturity date of the loan as well. Borrowers need to go through the modification rules properly with a good effort. Banking regulations are as follows:


1. The borrower should have a prominent proof due to severe financial crisis.


2. The probable income during the period of the modified loan is greater than the value the home would bring in a foreclosure sale.


3. The borrower needs to show some assets like the home has to be own.


4. The home should be payee’s primary residence.


The payee has to submit a prayer for loan modification describing the actual reasons for this and the lender will ask for documents such as Income tax documents, bank statements, pay slip and other supporting papers. The lender has to reply within one month after receiving of applicants’ documents and shall inform about the contact person with telephone no to handle the loan modification process with a Bankruptcy Attorney Brooklyn NY. The payee shall have all rights to get detailed status information about the mortgage account. In case the lender/bank do not entertain the application of loan modification and statistically in most cases in New York it happens. As per the rule the lender will look into the following matter for denial.


1. Whether the payees are spending 29% of monthly income for mortgage repayment.


2. With an existing loan modification term, the payee is applying for re- modification of the same.


3. The payee is willingly trying to prove his incapability towards affordable payments on the existing mortgage


In case of denial from lender for loan modification the payee may seek for short sale of assets or bankruptcy. It is to be noted that if residence without share was shown under mortgage, it may be used to remove chance of second mortgage according to rule chapter 13 of bankruptcy.


It is advised to get in touch with Affordable legal counselling Attorney Brooklyn NY to deal with the matter of loan modification. Any agency who claims advance fees to settle up, should be avoided as New York authority prohibits on claiming upfront fee before providing any legal service.  Law office Coney Island Brooklyn NY ensures that there are certain paths to the collection of the upfront money. In terms of going for a loan modification program the borrower needs to give the fee in terms of refinance which is completely different term.


Law Offices of Mark Bratkovsky, PC   

(718) 891-0564



Real Estate Attorney Brooklyn NY , Bankruptcy Attorney Brooklyn NY , loan modification new York , Brooklyn based law firm NY

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