A change to the existing loan contract which is agreed to upon by both the lender and the homeowner. The lender may be able to modify the existing loan(s) based on the homeowner’s financial situation.
Due to the devastating effects of the housing crisis, many of our clients have little or no equity in their homes today. In fact, many of our clients have negative equity and owe more than their homes are worth. If this is your situation, you may be eligible for a loan modification.
For a homeowner, a deficiency judgment can become an issue. A deficiency judgment refers to a mortgage lender’s judgment against the borrower for the difference between the outstanding balance of the mortgage note, plus costs and attorney’s fees, and the value of the property foreclosed. The property value is determined by the date of the foreclosure sale.
To obtain a deficiency judgment against the borrower the foreclosure sale the mortgage lender must file a motion for a deficiency after the foreclosure sale, and the court must hold a separate evidentiary hearing on the lender’s request for deficiency liability. At the evidentiary hearing, the mortgage lender must show the court evidence that the property’s value on the sale date was less than the note balance.
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