Your options for modifying your home loan in San Diego, commonly referred to as obtaining a loan mod, depend on whether you are trying to modify your first position home mortgage or your second position home loan or Home Equity Line of Credit (HELOC). To obtain a home loan modification in San Diego, with respect to your 1st position mortgage loan, you should request a modification directly from your lender or loan servicer. The request should be made outside bankruptcy and before you file for bankruptcy relief.
A bankruptcy lawyer can help you by reviewing your loan modification packet to make sure it is complete and in proper form so increase your chances of success. Review by a lawyer is not always necessary, but it can help a great deal, particularly if you are unsure about how lenders view a loan modification. An attorney will also understand how and why the lenders decide whether or not to grant you a modification, and the pitfalls of the process. To obtain a modification directly from your lender or mortgage servicer, you need to call your lender or servicer and ask for a loan modification packet. You can also check your lender's website. Most lenders provide a loan mod packet available on their website. The Federal bankruptcy law does not allow you to forcefully modify your 1st position home mortgage against your lender's will. The rule is different if you have a 2nd mortgage or HELOC.
Under certain circumstances, Federal and California bankruptcy law allows you to modify your 2nd mortgage or HELOC. To modify your 2nd position home loan, you need to retain an attorney who is a Chapter 13 specialist, to file a Chapter 13 bankruptcy case for you.
Through the Chapter 13lienstripping process, your Chapter 13 attorney will be able to eliminate and erase a 2nd mortgage. Lienstripping allows your lawyer to “strip off” (remove) your 2nd mortgage or HELOC so that it no longer encumbers your home.
Lienstripping in Chapter 13 bankruptcy is different from voluntary modification by a lender. The two main differences between lienstripping and voluntary loan modification by a lender are:
Lienstripping is done against your lender's will.
Loan modification requires your lender's consent.
Lienstripping eliminates the principal balance of your loan.
Loan modification usually will not reduce your loan balance.
By stripping off your 2nd mortgage or HELOC loan, your lawyer will thereby reduce your total home loan balances, making your home more affordable for you.
If you have attempted to obtain a loan mod and you have been getting the run around from your lender, erasing your second mortgage through lienstripping may be the answer you've been looking for in order to make your home more affordable.
Call Bankruptcy Legal Center today to set up a free consultation with a bankruptcy lawyer to learn how you can erase your second mortgage through the lienstripping process and thereby make your home more affordable.