Legal Question in Real Estate Law in California

Hello,

We had a significant reduction in household income in 2013 due to a family member being laid off. Consequently, we could not afford to and stopped making our monthly home mortgage payments. We applied for a Loan Modification with the mortgage lender, but this was rejected due to lack of sufficient income.

Recently, the family member finally secured a new job resulting in the household income jumping back up to the pre-hardship levels. We are re-applying for a loan-modification. It is likely that the mortgage lender may approve the loan modificaton application now that the household income is high enough, but may tag on all the past missed payments, interests and related charges resulting in a sizeable increase in the principle!

Now, although the documented market value of the property is high, there are serious issues with the property which would significantly reduce its realistic marketable value. This is clearly evident from a property value appraisal that we did. We would not even be able to pay off our loans if the property were ever to be sold.

So, our primary question is:

Based on this info, how can we aggressively argue our case and convince the mortgage lender to take into account the above mentioned facts when structuring a modified loan?

Thanks in advance.


Asked on 8/26/14, 8:43 pm

1 Answer from Attorneys

This is not a legal question and you have no "case." From a legal standpoint the lender has no obligation to do anything but collect as much of the debt as it chooses, including any add-on charges it is entitled to under the loan documents, in accordance with the loan documents you signed when you took out the loan, and if you don't pay and they want to foreclose, then to foreclose in accordance with the documents and the law. Your legal obligation is to pay everything you owe, including any add-ons legally charged under the loan documents, or move out after they foreclose. Anything else is purely a business matter between you and the lender.

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Answered on 8/27/14, 7:43 am


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