4 Questions to Ask a Loan Modification Attorney

A loan modification attorney can help you negotiate the best deals on your mortgage contract. Attorneys have detailed knowledge of contracts, helping you to understand terms and the way those terms will affect your total cost. While most attorneys are an asset in this case, there are some attorneys who will not disclose all of the necessary information to assist in your decision. Make sure to ask these questions before employing any attorney for your negotiation. 

#1 What will this cost?

You will most likely be surprised to learn loan modification, which is meant to save you money, can actually cost you a lot as well. The goal is to net savings over time. Initially, though, you will have to be prepared for some expense. This expense is escalated when you seek the assistance of a consultant. Attorneys are the most expensive consultants, and they typically charge on a per hour basis. This means they can rarely give you a cost estimate up front. However, you should ask for a "good faith estimate" on the cost, and you should use this as a benchmark to make your decision.

#2 How will this affect my credit score?

There are negative impacts to modification. The most sizable negative impact is a drop in credit score. Your attorney should understand your goals for credit score during the process. For example, if you tell your attorney you want to actually raise your score through the process, your attorney can work on deals with the lenders to report positive results to the credit bureaus. This will tend to cost you more money, and you may even have to pay a penalty to your lenders. If you simply want to avoid negative impacts, your attorney can work toward that goal as well. 

#3 How long will this take?

Some modifications can take months to fully finalize. This can be a problem for borrowers who have an immediate need for debt relief. This is another problem you can address by speaking with your attorney about your time table. For example, if you know you will not be able to pay the debt next month unless it is modified prior to coming due, you need to clearly communicate this to your attorney. Having a time table in mind, even if you are not pressed for changes, is important. The longer a modification takes, the more it will cost you in attorney fees.

#4 What about bankruptcy?

Modification seems like a better idea than bankruptcy, but this is not always the case. At times, a borrower would receive a greater total benefit by simply filing for a legal protection under bankruptcy. If you qualify, it is worth asking a lawyer to discuss the implications of bankruptcy with you. You may find you cannot continue to make payments after modification, which means modification will only delay the inevitable bankruptcy you face. In this case, it is best to file now and start recovering than to continue to dig yourself deeper into debt.

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