The mortgage crisis has hit Arizona hard. According to official state statistics, more than 10,000 homes every month are foreclosed upon, and thats a trend seems to have no end in sight despite efforts by the government and industry professionals to stem this disastrous tide. There are new options available, however, for those who find themselves in a difficult situation, and below is an overview of how this process works.
Eligibility for Arizona Home Loan Modification
Not everyone is eligible for a home loan modification, which is why you should begin by meeting with an attorney to analyze the whole of your financial situation that includes your mortgage status, your income and any other financial variables that define your monthly bottom line. Once this process is complete, the options available to you will become clearer.
Generally, there are a few qualifying tenets that should be met in order to give you the best opportunity to successfully negotiate a home loan modification.
- Proof that youre either behind on your mortgage payments or about to fall behind because of a rise in your monthly payment amount or a loss of income based on a job loss or some other factor
- Proof that youve had the mortgage for a minimum of 12 months
- Proof that you are not yet in a state of foreclosure
- Proof that the home loan in question involves your primary residence
If these general qualifications are met, a home loan can be modified in the following ways:
- A reduction in your interest rate
- The potential to lengthen the loans length to a maximum of 40 years.
Regardless of the specific items modified on your home loan, the goal of such an effort it to keep you in your home and to avoid foreclosure. This is not only a win for the borrower, but also the lender, as taking possession of a property in a depressed real estate market many times will present an even bigger loss on that loan for the lender who sells it out of foreclosure. Therefore, there is incentive for both parties to the loan to find a solution to the immediate problem.
Relevant Arizona Statutes
Adding to the incentive for lenders to approve a home loan modification is the presence of an anti-deficiency statute in Arizona. A.R.S. 33-729 states that if a home is foreclosed upon, the lender may not attempt to seize other property owned by the borrower in order to satisfy the deficiency between the amount of the loan and the funds received when that property is sold, unless the reason for this deficiency is because of voluntary waste on the part of the borrower.
How to Proceed - AZ Loan Modification
The Obama administration has also published tenets that should be met in order for a new home loan modification to be valid, and this is partially dependent on the percentage of a borrowers income thats devoted to a monthly mortgage payment. If you are facing a difficult situation with your home loan, you may have options that include a home loan modification that could help both you and your lender avoid foreclosure.
Contact the Arizona home loan modification attorneys at Phillips Law Group today to schedule an initial consultation and to get the process of putting this stressful situation behind you started.