[Case Study] Texas Homeowner Avoid Foreclosure With Mortgage Loan Mods
E.J. Simonsen | Sep 27, 2022
Many people apply for a loan modification or “loan mod,” as it’s more commonly called, because they are unable to meet the payments under the original terms. A loan modification is defined as a change to the original terms of a mortgage agreement. The problem is when people apply on their own, the percentage of success stories is a measly 20%. Even if they do succeed, given the complexity of the process and the mountain of paperwork required, only 7% of all applicants are successful in obtaining a reduced mortgage payment or other relief they seek.
Unfortunately, the answer given by most mortgage companies is either the borrower didn’t make enough payments on the original loan, the balance exceeds the value of the property (negative equity), or, most frequently, a “lack of hardship." Meaning that the lender doesn't feel the borrower has a valid enough reason not to make the required payments.
But what if none of these reasons apply and you are still denied a loan modification? Or if your loan modification isn’t denied, it’s perpetually delayed? That’s exactly what happened to the Taylors. (Names changed to protect identity.)
The Client: A Typical American Couple Whose Finances Were Hit By COVID-19
Mr. and Mrs. Taylor are a typical, dual-income, hard-working American couple residing in Houston, Texas. The Taylors have lived in their home for over a decade and always made their mortgage payments on time.
Until COVID hit, that is.
When COVID hit, Mr. Taylor’s job, like many others, was affected, and the Taylors lost their ability to make timely payments. Once they fell behind on their mortgage payments, the Taylors' home was in danger of foreclosure.
Due to these circumstances, which were completely out of their control, the Taylors asked their mortgage company for help. Unfortunately, while working through the loan modification process, the foreclosure process continued, and they weren’t getting the communication or the information they needed to feel secure that they wouldn’t lose their home.
With a child in college, mortgage payments piling up, looming foreclosure, and a debt of $142,341 still left to pay on their home, they turned to The Lane Law Firm for help.
This case study outlines how The Lane Law Firm stopped the foreclosure, kept the Taylors in their home, and obtained a loan modification that lowered their monthly payments to an affordable amount.
The Challenge: Making Unwieldy Payments Amidst a Global Pandemic
When COVID hit, no one was ready for the damage it would cause. Schools closed, businesses shut down, and many people found themselves out of work yet still obligated to make payments on their debts. Despite these challenging circumstances, though, the Taylors were still committed to making their mortgage payment. Unfortunately, they fell behind.
Now that they were in default, their mortgage company refused to accept any payments that were not the full amount owed, and that amount grew every single month.
Fortunately, their mortgage companies soon offered COVID forbearance, which the Taylors accepted.
After a while, their lender ended the forbearance assistance, and even though the Taylors were being considered for a loan modification, the mortgage company still posted the Taylors’ home for foreclosure! While confident they would be offered a loan modification, the mortgage company’s frequent delays and communication failures made the Taylors extremely uncomfortable. With their home on the line, they needed to know what was going on, their legal options, and how best to save their home.
When a home is in danger of foreclosure, it can be foreclosed on in as few as 21 days. To make a terrible situation even worse, there’s no redemption period. Foreclosure devastates the homeowners’ credit, and the homeowner may still owe money to the IRS or the mortgage company even after the home is lost or the debt is forgiven.
The Solution: A Temporary Restraining Order that Stopped the Foreclosure, Bought the Taylors the Time They Needed, and Forced the Mortgage Company to Communicate
The Taylors came to The Lane Law Firm and told us exactly what had been happening. They were understandably worried about the pending foreclosure and that they might be offered a loan modification with a rate or payment so high they’d never be able to pay it. We immediately discussed the possible ways we could help the Taylors and quickly worked out a plan to save their home.
The first thing we did was stop the foreclosure.
We filed a lawsuit and requested an emergency, temporary restraining order, or a “TRO,” which was granted by the court. Once the foreclosure was stopped, we worked with the Taylors to get their financials together so we could request a reasonable loan modification.
With the lawsuit and TRO in place, we took the Taylors' updated information to the mortgage company and worked with them to secure the Taylors an affordable monthly payment.
Fortunately, the lender was willing to work quickly, thereby successfully avoiding a long, drawn-out court battle, saving the Taylors time and money. In the end, we secured an affordable, permanent loan modification for the Taylors.
Results: The Lane Law Firm Saved the Taylors' Home and Secured an Affordable Loan Modification.
Through the hard work of our team, the Taylors' trust in us, and the cooperation of the lender, we stopped the foreclosure, got the Taylors a permanent loan mod, and kept them in their home.
Now the Taylors can enjoy their home without worrying about how to make their mortgage payments.
Conclusion: Helping Texas Families Save Their Homes
Just because you’re in default or your property is in danger of being foreclosed doesn’t mean you have to accept what the mortgage company says. There are options beyond battling it out in court for years.
If you used to make your mortgage payments on time and have suffered an unforeseen loss that caused you to be unable to pay, like the Taylors, there’s still hope.
Not all mortgage companies are out to get their customers.
Many, including the Taylors' mortgage lender, are willing to work out a new agreement with the right amount of persistence. It just takes time, patience, and sometimes legal assistance. If you need help with your loan modification or have questions about the foreclosure process, don’t hesitate to reach out! Contact The Lane Law Firm for a confidential, no-obligation consultation.