Paladin Legal Center Loan Modification Attorneys

Homeowners who engage the attorneys at the Paladin Legal Advocacy Center to assist them in obtaining some form of mortgage relief from their lender will benefit from one of two courses of action:
non-litigation based relief or litigation based relief.

Non-Litigation Based Assistance

This approach is typically used for homeowners who are in the early stages of mortgage distress and who do not appear to be victims of fraudulent lending practices

Mortgage Modification

Paladin Legal Advocacy Center specialists will engage with the lender(s) on a client’s behalf to renegotiate the terms of the mortgage in order to obtain a more affordable monthly payment for the client.  In this process the two most common points of negotiation are the interest rate and amortization period. We will attempt to get lenders to extend the term of length of a mortgage, reduce the interest rate of a mortgage, extend an initial or “teaser” rate for a period of time or potentially all of the above thereby reducing the client’s monthly payments.  In some cases and with some lenders, a reduction in the principal may be available as well.

Loan Forbearance

Loan forbearance is stop-gap measure negotiated with a lender to typically forestall foreclosure for some period of time. It is used when a homeowner has fallen behind on their mortgage due to a temporary event such as loss of income due to injury or the loss of a job.  In the forbearance process, Paladin will negotiate on the client’s behalf with the lender to create a temporary arrangement whereby monthly payments may be reduced, or outstanding past due payments can be set aside until the end of the forbearance period, at which time the mortgage must be brought current.  This delay allows clients time to gather assets and or acquire additional sources of income to bring their mortgage account current.  In the alternative, it may allow a home owner time to arrange for a short sale or other orderly liquidation of their property allowing them to avoid foreclosure.

Partial Claim (for FHA Loans only)

If a client has an FHA Loan and is unable to negotiate a modification or forbearance program, Paladin can start discussions with your lender for a Partial Claim. This strategy is only available on FHA loans. Working together with The Department of Housing and Urban Development (HUD), your lender can agree to help you with a one-time loan from the FHA Insurance Fund to bring your account current. The loan is not due until the client’s mortgage is paid off, and does not bear interest until that time. It is important to note that the criteria for qualification for FHA Insurance Fund assistance are specific and not all clients will qualify.

Short Sale

A short sale is advisable for clients that are unable to make their mortgage payments under a modification or forbearance strategy and are unable to sell their home for its mortgage value due to market conditions. Paladin will negotiate with lenders to allow for a short sale of the client’s property, and if successful, a short sale will allow client homeowners to sell their home to a third party at an amount less that is owed on their mortgage and be relieved from the remaining original debt balance.  This process has negative effects on a client’s credit rating, but those effects are far less damaging than a foreclosure.

Pre-Foreclosure Sale

When a client is willing to sell their home or it is currently on the market, some lenders might agree to put your foreclosure on hold while you attempt to sell your home through traditional real estate methods.  Paladin will negotiate with lenders a period of time, typically three to five months, during which the lender will agree to delay foreclosure so the property may be liquidated on the open market. This process has negative effects on a client’s credit rating, but those effects are far less damaging than a foreclosure.

Deed-in-lieu of Foreclosure

The deed in lieu of foreclosure strategy can by employed when all other mitigation strategies have failed or are unworkable. In this instance Paladin negotiates with a lender to take possession of a borrowers house without going through a formal foreclosure proceeding. This should relieve a borrower from most if not all of their indebtedness associated with the property, allow them to avoid a formal and public foreclosure, and typically achieve more favorable terms that would be available in a foreclosure situation.  This process has negative effects on a client’s credit rating, but those effects are far less damaging than a foreclosure.

Litigation Based

If your home is in foreclosure or you are considering letting your home go into foreclosure, it is possible for you to retain possession of your home regardless of whether you are capable of making the mortgage payments for a period of time due to violations of Federal Law by the mortgage company.

Federal laws such as the Truth In Lending Act (“TILA”) and the Real Estate Settlement Procedures Act (“RESPA”) are violated daily by lenders and mortgage companies. These laws are in place to protect homeowners, but they have been largely disregarded by servicers and mortgage companies during the home buying frenzy of the last five or more years.  Due to these types of technical violations, your loan is probably unlawful, and you may be entitled to substantial damages whether or not you're currently in foreclosure.

In addition to avoiding foreclosure, the Truth In Lending Act also can enable you to avoid bankruptcy and it puts money in your pocket. Once TILA and/or RESPA violations are discovered in your loan documents and Paladin Legal Advocacy Center files initiates a lawsuit on your behalf, your lender will be eager to discontinue the unlawful foreclosure process and settle the dispute.  The most likely form of settlement is a loan modification on terms that are attractive to the homeowner/borrower.

Litigation to Effect a Loan Modification

The Federal Truth in Lending Act is a very specialized area of law, and only a few attorneys in the country are able to take on mortgage companies in this regard. Paladin Legal Advocacy can help qualifying avoid foreclosure by using litigation.  Most loans will qualify for our program, but time is critical. We need time to fully analyze and evaluate your mortgage documents and then prepare the lawsuit.

Here is an overview of how our program works:

• We scrutinize the mortgage documents you received upon the closing of your loans(s) and look for TILA, RESPA and/or HOEPA violations by your lender. Nearly every loan has at least some violations.
• We immediately file a Federal lawsuit on your behalf, and place a Lis Pendens on the property to stop foreclosure (if applicable) and begin litigating your causes of action against the lender(s).
• We reach a settlement agreement with the lender (most cases) or continue on to trial (rare situations) and demonstrate to a judge or jury how the lender has willfully failed to comply with Federal Law.
• It is NOT a requirement for you to make mortgage payments while the lawsuit is pending, and it is also unlawful for the lender to report negative information about you to the Credit Reporting Agencies while the lawsuit is pending under the Fair Credit Reporting Act.