Modifying your mortgage is a way to make your home affordable...but these options expire in 2016.

Photo by William Foley/iStock / Getty Images
Photo by William Foley/iStock / Getty Images

What is Mortgage Modification?

Mortgage Modification, also called Loan Modification, is where you provide certain financial to your mortgage company if you have fallen behind in payments and they evaluate whether you are eligible for a change in the terms of your mortgage.

When the financial crisis hit, the federal government created a program through the U.S. Treasury Department called HAMP, which stands for the Home Affordable Modification Program. This is sometimes referred to as the "Making Home Affordable Program." 

The goal of this program is to require mortgage companies who were bailed out and took TARP money from the federal government to help Americans keep their homes and make it affordable to do so, based on their income.

This program, and other in-house bank mortgage modification programs, have helped millions of Americans keep their homes and made it affordable for them to do so.

Mortgage Modification is Ending in 2016

Because these programs have been operating since 2009, they are set to expire in 2016. There is still time to pursue this solution but time is running out. You may qualify to have your mortgage payment reduced to an amount equal to 33% of your monthly income. So if you have had a reduction in income that makes your current mortgage payment higher than 33% of your monthly income, you may qualify for this mortgage solution.

We help clients in Central Florida modify the terms of their mortgage which allows them to keep their home on a much more affordable payment.

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The Orlando Bankruptcy Court Mortgage Mediation Program

While you don't always need to file for Chapter 13 Bankruptcy to modify your mortgage, there are many advantages to doing so. 

The Orlando U.S. Bankruptcy Court was one of the first in the country to launch a court supervised procedure to force mortgage companies to go to mediation to make the loan modification process easier. It has become the model program around the country and many other bankruptcy courts have created similar programs based on the success of the Orlando program, started in 2010.

Because of court supervision, mortgage lenders are much more likely to cooperate in good faith with you to process and evaluate your mortgage modification application. Because certain penalties and sanctions can be imposed on them by the Bankruptcy Court, the banks are aware that their conduct in this process is being monitored. 

As a result, the success rate of the program has been almost 80% of mortgages being modified under the program.

We specialize in helping our clients through this process and for many, it is the best solution to save their home and make it more affordable.


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