Law Firm Serving Albany, Troy, Saratoga Springs & Clifton Park NY
While the worst of the financial crisis is behind us, the real estate market still has individuals facing troubles with their mortgage payments. Although the foreclosure rate remains higher than historical averages, the rate has dropped, due in large part to the expanded use of loss mitigation techniques, such as loan modification agreements, short sales or deeds in lieu of foreclosure.
Each of these types of transactions serve as alternatives to foreclosures. Our clients who utilize these loss mitigation options find that these processes minimize the damage caused by defaulting mortgage loans in preventing foreclosure, which lessens the damage incurred by both the lender and the borrower.
Often, whether a certain loss mitigation option can be utilized depends greatly on the status of the title concerning the subject property. At Ianniello Anderson, P.C. we assist our lender, servicer, bank, investor and guarantor clients across the country to evaluate the viability of each loss mitigation option from both a legal and title perspective.
We are prepared to advise and aid our clients through the entire loss mitigation and title resolution process, from analyzing the title issues and recommending the best loss mitigation option, to basic recording of documents in every recording jurisdiction in all 50 states, to preparing and filing any and all legal documentation necessary to achieve the desired outcome.
Our goal is the help our clients to convert defaulting loans to performing assets.
The referenced loss mitigation options are more specifically detailed below:
Loan Modifications- Contracts are often thought of as being set in stone- inflexible, rigid, and unforgiving. However, the current financial environment has induced both borrowers and lenders to amend the terms of their existing mortgage contracts. Lenders are often willing to reduce the interest rate and/or extend the term of a loan if it means the borrower will not default, as it is advantageous to both the borrowers and the lenders to make the existing mortgage arrangement work rather than to resort to foreclosure.
Short Sales-. When a property is worth less than its mortgage balance (commonly called being underwater), lenders sometimes allow the borrower to sell the property at the current market rate, and forgive the difference between the mortgage balance and the sale price. In such an instance, the borrower must vacate the property, and the sale must be to a legitimate third party, the borrower (or its nominee) is not allowed to be the purchaser on the resale in order to get out from underwater.
Deed-in-lieu of Foreclosure- If a borrower is unable to meet the financial obligations of a modified mortgage, or if modification is not an option, deed-in-lieu of foreclosure may be the best alternative to foreclosure. The name describes exactly how this process works. In lieu of being foreclosed on, a borrower can vacate the property and give the deed and all rights to the property to the lender. This is often the best option when the mortgage on a property is underwater and a buyer cannot be found.
The techniques above are just general descriptions of loss mitigation tactics that our clients have benefited from. Whether a particular property can benefit from one of these loss mitigation techniques and can stay out of foreclosure varies on a case by case basis. The only way that we can determine if a particular property could benefit from any of these options is by reviewing all pertinent facts and by making a close examination of the title to the property and determining whether any required title clearance steps are feasible.
If you are a lender with a need to manage a large block of defaulting real estate loans, do not hesitate to call us (518)350-7755 or e-mail us (firstname.lastname@example.org) to set up a free, initial consultation. We have offices in Albany, Glens Falls, Clifton Park and Saratoga Springs and represent clients in the greater Troy area.