There may come a time when you will suddenly realize that it has become difficult if not impossible to make the required payments for the home mortgage. A deed in lieu of fotreclosure may be your ticket to exit safely and a good California real estate attorneys is just wht you need.

If this is your situation, then you might be facing the possibility of a foreclosure. You lose your home and some of your self-respect, and you discover later that it is much more difficult for you to take out a loan.

Don’t despair because the Law Offices of Fransen & Molinaro, LLP may be just what you need to lend you a helping hand because one of their primary areas of expertise is mortgage law and predatory lending.

But first, why don’t you have some quiet time with yourself and ask yourself a couple of questions?

The threat of a foreclosure may be so frightening that the fear could prevent you from making a wise decision or it could spur you into making a move that you will later regret. Many people just want to walk away and give the keys back to the bank. That is perfectly fine, but make sure you are educated about the “legal” risks that you may face because of that decision.

Here’s a secret that you might find interesting: your lender is just as reluctant as you to go ahead with the foreclosure.

Why would he want to pay for legal expenses that could average $10,000 per month? Why would he want to lose the monthly income during the time interval when it is foreclosed and when it is sold? 

So, calm yourself a bit and look at your situation from the point of view of another person who is not worried about foreclosure. Ask yourself (or this imaginary person) if the current incapacity to pay is permanent or temporary. If your financial situation is temporary, then why don’t you workout a solution with the lender?

If it is permanent, then you might have to give up your home but you must try to protect yourself from being liable beyond what the lender could get when he sells the property.

If Your Situation Is Temporary, You Might Get to Keep Your Home

A possible alternative here is loan modification, where the current agreement with the lender is renegotiated for an adjustment in the interest rate, especially for adjustable-rate mortgages (ARMs) and the teaser rate is no longer in force.

The teaser rate is lower than prevalent rates so that the lender would, of course, want to increase the rate. However, in this alternative, you are depending on the principle that the lender might find it more appealing to permit you to continue to pay the teaser price for a longer length of time instead of getting zero monthly payments with you out of the house.

If You Have to Leave Your Home, Do So without Fear

If you have been honest with yourself and found that the situation is permanent, there is no choice but to hand over the keys to your home. But it is not as simple as that. In some states, your liability as debtor will not be totally erased if the house sells for less than the unpaid amount. The lender might force you to make up for the difference! So, how do you protect yourself from this possibility?

An option that you might consider is the short sale, where it is possible for the lender to free you from being responsible for any deficiency in the amount collected from the sale.

But wait!

A potential problem here is that there must be a willing buyer and the lender must agree to the proposed price. The challenge here is looking for the buyer who would be able to offer an amount that is not too low that the lender would not be interested. 

Another option is the deed in lieu of foreclosure, which simply means that you just hand over the keys of your home to the lender and in return he forgives and forgets any difference in the amount you had not paid and the money he would get from selling it. Just make sure that the agreement is in writing and, of course, having a lawyer to guide you in the process would be better. 

It is important to remember with the short sale and the deed in lieu of foreclosure that they are quite complex in their requirements. One critical requirement here is that you must be able to prove to the lender that you are no longer capable of keeping up with the payments but that you were indeed capable during that time that you took out the loan.

Boston Herald

I know there will be two very different reactions on this blog:

A. Great! Do I qualify?

B. Darn�a give-away to someone who doesn�t deserve it.

Before you hit the comment button, look at who can get these loans.

For the Home Affordable Refinance, you must
Own a house that was Fannie Mae or Freddie Mac insured.
You have to be current on your mortgage.
You can�t be underwater.

For the Home Affordable Loan Modification, you must
Own a home with a first mortgage no higher than $729,750.
You need to be current on your mortgage as of January 1, 2009.
You need to show that you have reason to be having trouble keeping up with those payments. That would include adjustments to the interest rate, reduction in income, or significant increase in expenses (the example they gave way medical bills.)

Manita Dadil :

How do you know if a company is legit?

Paul Molinaro Esq.

We fully understand the dire financial situation our clients face. EVERY one of our loan resolution or Bankruptcy clients is having money problems (or they would not need us). Thus, we have made our pricing affordable to people with very limited funds.

That said, we need to make sure we are paid, and we do not want to be just one more creditor of the many seeking to collect from our clients. We ask for full payment up front.

As to guarantees.

Lawyers do not guaranty the outcomes of their cases or matters. We are lawyers and zealously represent our clients. That is how we earn our fee… through the actual work we do.

If a loan modification does not work out (it happens), that is when we are of even more value to our clients. That is when they need help with a short sale, deed in lieu, advice on the foreclosure process, or bankruptcy. We are paid to provide legal services, not to “shoot for a loan mod, and see what happens.”

Ellen Jones on February 28th, 2009 8:31 am

Is the Better Business Bureau and good reference to check the legitimacy of one of these loan modification companies?

TJ Roberts on March 2nd, 2009 6:59 pm

Well said Paul,Im in a fix myself,and Ive been a REALTOR for 17yrs.There are a lot of angels,on the loan mods,some want money up front,? and there is no guarantee a loan mod will be approved even with a rep co.and you’ve loss 2 months to find out a no

The problem is when most of these people dont have any equity,so I have a different mindset,on chap 13 or sell

PaulMolinaroEsq on March 2nd, 2009 11:07 pm Re: “Better Business Bureau”

Well, the BBB seems to be giving all loan mod companies lower than expected ratings due to the fact that the field is getting filled with corrupt businesses. The legitimate companies are being spoiled by being in a bunch of rotten apples. That said, it is one of the sources you should examine, but not the only source.

PaulMolinaroEsq on March 4th, 2009 12:08 am

No way around it, many potential clients who call my office want to hear that we guarantee their loan modification. They have read promises of balance reductions and super low fixed rates on the websites sites of loan modification companies, heard the radio commercials, and opened their junk mail (both email and U.S. Mail).

We know what people have heard. But when one thinks it through, a guarantee is just plain ridiculous. Each loan modification is unique. Some of the factors at play are the borrower’s ability to pay, the hardship, the location of the property, the amount of equity to loan balance, the lender’s financial situation, the attitude of the negotiator at the lender, the timing (whether the month was bad for real estate sales or really bad for real estate sales).

So many things affect the outcome. One of the hardest parts of advising people on loan modifications is making sure that a person really wants to stay in their home. Sometimes, the home is just unaffordable, no matter how low the rate.

When someone makes $3k a month and they bought a $700k home with no money down, it might be time to face the facts. Letting the house go through short sale or otherwise and then renting might really be the best choice. This is a discussion I have with my clients, and I make sure they get an education on all their options. The decision is left to the client, but I make sure it is an informed decision.

Mike on March 5th, 2009 3:48 pm

My neighbor had a guy call him about a loan modification and said he was a lawyer. He said it would cost 3,000 dollars for his fee and he would take the cost of his house from 310,000 to 233,000 and bring his interest rate from 6.5 to 5, plus 3 months off from paying his mortgage. Now this sounds too good to be true.

Is there anyway this could be for real?

PaulMolinaroEsq on March 6th, 2009 12:43 pm

Well, I guess it could possibly under some special set of circumstances if the stars and planets are all in alignment… be true… but… how the heck would someone know exactly what interest rate and exactly what balance a person would get. Any such claims should be examined for misleading statements very carefully and then? Examined again.

Marvin Opiyo on March 10th, 2009 9:43 pm

If a scammer has already taken my money, then failed to modify my mortgage, can your firm sue them? How much?

2. Is there a statute of limitation when suing my lender for predatory lending? That is, if it has been more than three years since the loan closed, do I still have a case?

Paul Molinaro Esq on March 11th, 2009 11:19 am (Edit)

In general, California law prohibits a non-licensed attorney or a non-DRE approved company from taking money up front to handle a loan modification IF THE BORROWER IS IN DEFAULT. Violating California law on this matter might result in the illegal act-doer being hit with THREE times the charge for the service as a penalty. As to statutes of limitations, each statute sets its own limit and the same holds true for non-statutory laws.

(All my posts are for general information purposes only, and are in no way providing specific legal advice for any person or entity.)