COSTA MESA, Calif., July 15, 2009 (GLOBE NEWSWIRE) -- According to recent industry reports, from January to May this year nearly 1.5 million homeowners nationwide received a foreclosure notice (RealtyTrac), and mortgage defaults are on track to reach 3.5 million by the end of the year (Moody's Economy.com). Concurrently, the number of mortgage scams continues to rise.
"There are a lot of mixed messages being presented to homeowners right now about their options," said James Parsa, founding attorney of Parsa Law Group, a law firm specializing in consumer finance counsel and services. "It's unfortunate that homeowners, who need help now more than ever, are not taking advantage of opportunities to save their homes out of fear and confusion about the process."
Below Parsa Law Group answers frequently asked questions about loan modification, in an effort to empower homeowners to take action and save their homes and to educate families so they can protect themselves from misguided support.
* Do You Qualify for Loan Modification? If you can answer "Yes" to
all of the following questions, you stand a good chance of
qualifying for a Loan Modification:
-- Is your home one to four units? (Single-family home, duplex,
triplex, etc.)
-- Is it your primary residence?
-- Is the balance on the first mortgage less than $729,750?
-- Did you get your mortgage before January 1, 2009?
-- Do you owe more on your mortgage than your house is currently
worth?
-- Are you having trouble paying your mortgage payment?
* Service Provider & Payment Options:
-- Attorneys & Law Firms: A licensed attorney or law firm
specializing in loan modification is the best place to start.
Most will offer a free consultation and pre-qualification,
and can tell you if a loan modification offer from your bank
is fair and sustainable. Attorneys require a retainer fee,
which, depending on the agreement, a portion of the fee can be
refunded in some circumstances. Law firms are regulated by
state bar associations and do not require approval from the
Department of Real Estate to accept retainer fees.
-- Non-Profits: If hiring an attorney is not financially
feasible and you are not in immediate need of services,
there are HUD approved non-profits. Due to the demand for
its services, working with a non-profit may require a longer
period of time for your modification to be negotiated.
-- Brokers: Only loan modification brokers approved by the
Department of Real Estate can legally accept upfront fees.
* How to Detect Scams: Loan modification is a custom process based
on individual circumstances; there are no guarantees. Your first
red flag should be a guarantee of specific payment or interest
rate cuts, especially without review or access to your financial
information. You should ask to see examples of previous loan
modifications obtained by the company, ask to see the final loan
modification offer letter from the bank with the individual's
private information blacked out. Do your homework:
-- Before hiring an attorney or law firm, check their record and
standing with the state bar associations (State Bar of
California: www.calbar.ca.gov)
-- Choose from a list of HUD approved (www.hud.gov) non-profit
companies
-- Confirm a broker is approved to accept advance fees with the
Department of Real Estate (www.dre.ca.gov). You can also see
if the broker or company has received an order to desist and
refrain from offering loan modification services.
* Information to Have On-Hand When Beginning the Loan Modification
Process: Loan documents for all mortgages on your house, pay
stubs and/or proof of all household income, statements from all
current debt including student loans, car loan, credit cards, etc.
* How Long Does the Loan Modification Process Take? Loan
modification from start to finish can take anywhere from three to
six months, in some cases much longer, depending on your financial
situation, the lender requirements and how many cases the lender
has in the pipeline at the moment.
About Parsa Law Group
Parsa Law Group is a full-service law firm providing qualified and affordable legal representation for those in need of loan modification, bankruptcy and debt resolution services. For more information, visit www.parsalaw.com, or call 1-800-256-1097.