When an individual has financial difficulties their monthly mortgage payment may be one of the bills that they are unable to pay. A foreclosure is the process by which an individual’s rights to a property are forfeited because of a failure to pay the mortgage. It is important to speak to an experienced St. Louis foreclosure attorney even before that first monthly payment is missed in order to discuss possible options for avoiding foreclosure.
Ways to Avoid St. Louis Foreclosure
Loan modifications, forbearance agreements, and repayment plans are all different ways that borrowers can avoid foreclosure.
St. Charles Loan Modifications
A loan modification is a permanent restructuring of the mortgage where one or more of the terms of a borrower’s loan are changed to provide a more affordable payment. With a loan modification, the lender may agree to do one of more of the following to reduce your monthly payment:
- reduce the interest rate
- convert from a variable interest rate to a fixed interest rate, or
- extend the length of the term of the loan.
In order to be eligible for a loan modification you may be required to take several steps including:
- Demonstrating that you cannot make your current mortgage payment due to a financial hardship
- Complete a trial period to demonstrate you can afford the new monthly amount, and
- Provide all required documentation to the lender for evaluation including copies of tax returns, bank statements and proof of income.
There are many different loan modification programs available but only a St. Louis loan modification attorney can review those choices and determine the one that is best for your particular situation.
St. Louis Forbearance Agreements
While a loan modification agreement is a permanent solution to unaffordable monthly payments, a forbearance agreement can provide short-term relief for borrowers. With a forbearance agreement, the lender agrees to reduce or suspend mortgage payments for a certain period of time and not to initiate a foreclosure during the forbearance period. In exchange, the borrower must resume the full payment at the end of the forbearance period, plus pay an additional amount to get current on the missed payments, including principal, interest, taxes, and insurance.
Missouri Repayment Plans
A repayment plan is an agreement to spread the past due amount over a specific period of time. A repayment plan:
- The lender spreads the overdue amount over a certain number of months.
- During the repayment period, a portion of the overdue amount is added to each of the regular mortgage payments.
- At the end of the repayment period, the mortgage payments will be current making it possible to resume paying the normal monthly payment amount.
Contact an Experienced Foreclosure Attorney in St. Louis, Missouri
The laws regarding Missouri foreclosure can be difficult to understand and complicated to apply making it necessary to seek the advice of a skilled attorney who can discuss all of the options that may be available to you. Consider contacting an attorney who is familiar with both Missouri and federal laws to discuss the specifics of your case even before you contact your mortgage company so that you can best understand your rights. Call Kenneth P. Carp today at (636) 947-3600 to schedule a free consultation to discuss your case.