Loan modification negotiations can be difficult, and if you try to handle it yourself, it could be even more difficult. For a loan modification to be acceptable to creditors, the property owner needs to show two main facts: evidence that there is a financial hardship which prohibits you from making your current payments; and a demonstrated ability to continue making mortgage payments if those payments are reduced.

Financial Hardship

Facing a financial hardship usually means one of two things: your income has changed; or your mortgage payment has changed. If your income has changed, it could mean that your spouse lost his or her job, your hours got cut, your sales are down or something else has happened. During this current recession, many are people are lucky to just have jobs, and even high-level executives are getting their pay cut. Getting your pay cut can be dramatic, and with many people living paycheck to paycheck, it can mean losing your ability to pay all of your bills.

It could also be that your mortgage payments ballooned. Part of the subprime mortgage crisis occurred because there are balloon payments and adjustable interest rates. Many people saw their interest rates adjust to a rate that doubled or even tripled their payments, which ruined their ability to make their mortgage payments. Some people had monthly mortgage payments that were more than they brought home a month.

Ability to Make Future Payments

Unfortunately, if you are unemployed you are not eligible for a loan modification. A loan modification really depends upon your ability to make the new, adjusted payments. This means that you have to have verifiable income. A California loan modification attorney can work with you to organize your paperwork and make sure that you can prove to the lender that you are indeed employed and have money coming in every month.

Overall, you need someone who can work with you on your loan modification to prove you qualify and to get your financial ducks in a row. There is quite a bit of paperwork involved in a loan modification, and if you do not know what you are doing, it can greatly harm your chances. In fact, it was reported that many people had their loan modifications rejected or negotiated terms that didn’t work for them when they negotiated on their own. A California loan modification attorney can walk you through the process and make sure all the information is accurate and available.

These two factors are hugely important for the loan modification process. A California loan modification attorney who knows what he or she is doing can make your life easier and help keep you in your home for many years to come. If you are facing a foreclosure, or if your financial situation is deteriorating, a loan modification might be your best option. Find a California loan modification attorney who you can trust, and you will greatly enhance your chances to stay in your home.