If you are facing foreclosure in Ohio, you may be surprised to learn that you have various tools and options available to you to resolve your situation. One of these tools is loan modification, which can ultimately lead to a more serviceable payment plan. However, understanding the first foreclosure notice (lis pendens) and when loan modification can be helpful is essential for any borrower before taking action.
You still have options after receiving a first foreclosure notice. Contact our experienced bankruptcy attorney at Fesenmyer Law Office to learn more by calling 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) today.
Understanding the First Foreclosure Notice (Lis Pendens)
In Ohio, as in many other states, foreclosures typically begin with what is known as a first foreclosure notice, or a lis pendens. Lenders use this notice to inform the public that a certain property is the subject of a foreclosure lawsuit.
All parties are considered to be on notice when a first notice of foreclosure has been filed. This is because the foreclosure proceedings and notices are all part of the public record.
What Is Loan Modification?
A loan modification is a temporary or permanent adjustment in the original terms of a loan. When a borrower enters into a loan contract, they agree to terms and agree to fulfill these terms, which creates a binding loan contract. Often, however, the terms can become unsustainable for certain borrowers over time. When this happens, a loan modification may be appropriate, especially when foreclosure is the only other viable option.
It is important to note that loan modification is not the same as forbearance. Forbearance is a short-term option that can relieve financial pressures for buyers temporarily. However, loan modification is usually a more permanent option. Still, temporary loan modifications can apply in some situations.
Is Loan Modification an Option After the First Notice in Ohio?
Yes. In Ohio, some borrowers may be able to take advantage of loan modification after receiving the first foreclosure notice. However, being granted a loan modification is not a guarantee. The mortgage lender ultimately decides whether a loan modification is an option for a borrower.
For on-point guidance and tireless representation in bankruptcy and foreclosure matters, Ohioans call on Fesenmyer Law Office for help.
Eligibility for Loan Modification
Generally, buyers must fulfill certain requirements in order to be granted a loan modification, including:
- The borrower must have experienced financial hardship, such as job loss or divorce.
- The hardship is the cause of missed payments.
- The borrower is capable of making payments under a new loan plan.
- The loan to be modified is a loan for the borrower’s private residence.
Keep in mind that if a bank or mortgage lender is not confident in a borrower’s ability to fulfill the terms of a loan modification, the lender may deny modification and proceed with the foreclosure.
The Loan Modification Process
The loan modification process involves negotiation. Borrowers and lenders work to come up with an acceptable, new payment plan for all parties. However, it’s important to note that negotiating for loan modification after a first foreclosure note can be more difficult than doing so before a foreclosure is on the table.
This is because a foreclosure involves the lender taking steps to protect themselves. If a buyer approaches the mortgage company before this point, the lender may be more amenable to a modification.
Comparing Loan Modification to Foreclosure
Loan modification and foreclosure are essentially opposites of one another with regard to their effects. With a foreclosure, the lender seeks to sell the house to another buyer, which essentially removes the borrower from the picture.
When it comes to loan modification, however, the original borrower remains in the home and continues a contractual relationship with the lender. However, the terms governing their relationship will have been modified.
You may wonder which option is the most optimal. A given situation determines whether loan modification or foreclosure is best. Lenders may opt for foreclosure when a buyer is simply too saddled with debt and financial issues to sustain original or modified loan payments. To determine whether borrowers can meet the terms of a modified loan, lenders do deep dives into borrowers’ financial habits and history. If they don’t believe a borrower is capable of meeting these terms, the foreclosure may proceed because it is in the best interests of the lender.
For homeowners, though, remaining in a home is priceless, so loan modification can often be ideal for borrowers. However, this isn’t necessarily true for all cases. For example, loan modification can be disastrous if the borrower cannot meet the new terms.
When to Seek Legal Help
When you’re facing any legal or financial issue, seeking help from a qualified professional as soon as possible is essential. In cases involving foreclosures, the earlier you bring a case before an attorney, the better. Additionally, if you have questions or concerns related to foreclosure or similar issues but have not yet received any kind of notice, it can be helpful to seek legal advice before a problem escalates. Doing so can help you understand your situation in detail and explore which path forward is best to protect your interests.
Call Our Trusted Ohio Bankruptcy Lawyer Today
Loan modification and foreclosure are two of the many financial issues that borrowers can face in Ohio. To navigate either situation successfully, seeking guidance from seasoned attorneys is vital. Filing for bankruptcy is one way to stop a foreclosure. Our attorney specializes in bankruptcy and can listen to your situation and create a strategy tailored to your specific circumstances going forward. We will fight for your best interests every step of the way.
If you are dealing with foreclosure issues, you don’t have to face the situation alone. The skilled team at Fesenmyer Law Office can help you take the right steps to put your financial worries behind you. Call 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) today for a consultation with a bankruptcy attorney who cares.
