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Many families find themselves behind in mortgage payments. A loan modification is when you work with your lender to match your mortgage payments with your financial situation. It is important to not confuse loan modification with mortgage refinancing. While mortgage refinancing is looking for a new loan, loan modification is adjusting the present loan to better the situation of the debtor. Saving your home from foreclosure is imperative. If you need legal help to save your home, contact a skilled Rockland County attorney The Law Offices of Allen A. Kolber, Esq. to discuss whether a loan modification is the best plan for you.
Loan modification eligibility
Under the current NY law, a Foreclosure lawsuit on a home loan must be assigned to the Foreclosure Settlement Conference Part before the bank can proceed to the actual Foreclosure and Sale, and a home loan means one made to an individual for personal, family, or household purposes and secured by a one- to four-family home or condominium in New York that the borrower occupies as a principal residence. The purpose of the Settlement process is to allow the Homeowner to apply for a loan modification, and to require the bank to review your financial ability, in good faith, to determine whether you qualify for one of the Government loan modification programs, or the bank’s own internal loan modification program.
The following is a basic list of documents you must provide to the bank in any loan modification application:
- Financial Statements or Profit & Loss Statements
- Personal or business bank statements
- Paystubs from each wage earner in your family.
- Personal or business tax returns
- A current utility bill proving you reside in the home.
- A Hardship Letter to explain the reason for your default and your current ability to pay the mortgage.
Notice and Conference Deadlines
New York requires a lender to send a 90-day pre-foreclosure notice before it can start a foreclosure on a home loan. That notice lists housing counseling agencies and is your earliest window to apply for a modification. Once the case is filed, the court must hold the settlement conference within 60 days after proof of service is filed, and neither side may charge the other for attending.
Do I need an attorney?
Attorneys skilled in the loan modification process will be able to process the documents in the most efficient manner. For example, my office has a relationship with almost every law firm that represents the banks in NY State, and my paralegals know most of the loan mod paralegals at those firms. Therefore, we always submit our clients’ packages directly to the law firm as well as the bank representative during the Foreclosure Settlement process. Readers should be suspicious of any loan modification “expert” who tells you he has a “personal connection” in the bank. No bank representative will go against his bank guidelines and risk losing his job, pension, benefits, etc.
Additionally, a skilled attorney, like a skilled accountant, must know how to prepare the Financial Statements or Profit & Loss Statements that will best represent your financial ability to qualify for a loan modification.
What lenders will and will not approve
But remember, a loan modification is not a discount program to reward homeowners for defaulting on their mortgages. The banks will not approve a loan modification if the homeowner cannot prove sufficient income to pay his monthly mortgage. The banks are not compassionate or understanding. They are merely following their investors’ guidelines: If the mortgage can be returned to a current status, the loan will be modified. If the homeowner cannot afford to carry a mortgage plus real estate taxes, insurance, utilities, etc., then the bank will usually move to take back its collateral (the house) and cut its losses.
The federal HAMP program that lowered interest rates to 2% and extended loan terms to 40 years closed to new applications at the end of 2016. A government-backed modification today is more likely to target a percentage reduction in your monthly payment, under the Fannie Mae and Freddie Mac Flex Modification or the FHA loss mitigation framework that took effect in February 2026. Some of the banks’ internal programs may lower your interest rate, fix an adjustable rate, forgive excess principal, or place your defaulted payments (“arrears”) at the end of the loan, to be paid when you sell the house or refinance.
Whichever program is offered, the most important feature of being granted a loan modification is that your Foreclosure action will be dismissed, and you will return to a regular monthly mortgage payment. For most of my clients, this is a major step in the return to financial stability.
Contact a Rockland County Loan Modification Attorney
The Law Offices of Allen A. Kolber, Esq. works with clients to protect their homes from foreclosure. We fully understand that facing foreclosure can be devastating. Our firm will work to protect your family and your home exploring all methods to avoid foreclosure proceedings. If you need effective legal representation, contact a loan modification attorney from The Law Offices of Allen A. Kolber, Esq. for a consultation today.
