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Attorney Ben Proto - The Musings of a Mad Lawyer

Monday, July 17, 2017

Real Estate Loan Modification in Connecticut

For homeowners in Connecticut, the consequences of failing to make one’s monthly mortgage payment can be devastating. With results ranging from foreclosure to bankruptcy, homeowners faced with such situations often wish that there was some way to make their mortgage payments more affordable. Fortunately, a program designed to avoid these outcomes is available to qualifying homeowners in Connecticut. This program, known as loan modification, allows debtors to remain in their homes while getting back on track financially. A loan modification is a change to an existing loan that results in affordable monthly payments. Banks and homeowners typically prefer this method to foreclosure, as it keeps the debtor in his or her home and allows the lender to continue receiving regular payments on the debt. Successful loan modifications often result in longer loan terms, lower interest rates, the transfer of accrued payments owed to the borrower’s loan balance, and a reduction of the total principle balance owed. However, as is discussed below, loan modifications are only permitted under certain circumstances.

Reasons for Real Estate Loan Modification

In order to qualify for a real estate loan modification in Connecticut, the borrower is typically required to demonstrate to the lender that his or her inability to make timely mortgage payments was caused by a change in personal circumstances leading to financial hardship. Common circumstances leading to financial hardship that may qualify a borrower for real estate loan modification include:

  • Separation or divorce
  • Incarceration or imprisonment
  • A call to active military duty
  • Unexpected reduction in income
  • Unexpected medical bills
  • Property damage
  • Interest rate adjustments
  • Illness
  • Unemployment
  • Job relocation
  • Death of a spouse or partner

Common Documentation Requirements

An experienced Connecticut real estate loan modification attorney will walk you through each step of the loan modification process. However, borrowers can typically expect to be required to provide the following documentation when applying for the modification of a loan:

  • 2 years of federal tax returns
  • 6 months of bank statements
  • 2 months of income statements
  • Profit and loss statement (if self-employed)
  • 2 years of business tax returns (if self-employed)

Real Estate Loan Modification Legal Representation in Connecticut

In addition to the reasons listed above, there may be additional circumstances that qualify a borrower for real estate loan modification. Therefore, if you are currently having trouble meeting your monthly mortgage obligations due to financial hardship, and you believe that you are at risk of foreclosure or bankruptcy, please contact an experienced Connecticut real estate attorney to discuss your situation, as your eligibility for the modification of a real estate loan will be determined by your unique situation. An experienced Connecticut foreclosure defense and real estate modification attorney will ensure that you understand your rights as a borrower while keeping you apprised of all of your loan modification options. Please contact Benjamin S. Proto for a free consultation at (203) 307-2915.

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