When a person is facing foreclosure, most of the time they have already tried to modify their loan and were turned down. But if you have not done that, you should try — I can virtually assure you that it will be a long and cumbersome and frustrating process, and in my experience most people are getting turned down, but those who get the loan modification can get some really good terms, including paying 2% interest on only a portion of their mortgage with the rest of it being interest-free, re-amortizing the mortgage over 40 years, and wrapping any arrears into the modified loan.

While a loan modification can be a sweetheart deal, my anecdotal experience is that only about 10% of my clients actually get decent, workable loan modifications. It can be a long, frustrating, arduous, repetitive process, sometimes with a reward at the end.

Most people facing foreclosure have other underlying debt issues, such as second mortgages, credit card debt, taxes, etc. When you call me, we will go through all of your options, including Chapter 7 (which would usually mean you will get a loan modification or will let your house go), or curing the arrears in Chapter 13, and possibly doing a lien strip. If losing your home is inevitable, the timing of your bankruptcy can be strategies to maximize your rights to remain in the house as long as possible while you are seeking alternate housing.

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