Legal Question in Real Estate Law in California

Since we do loan mods, our experience is similar to yours. The banks got billions in handouts and won't even help people asking for a hand up not a hand out. They caused the current economic distress we are all suffering through and have come though relatively unscathed. I�ll get off my soapbox but the long and short or it is that in my opinion the banks and their Wall Street friends are well a bunch of Madoffs.

The bank can pretty do as they please unless you get an attorney and threaten to sue them for the fraud they are committing. That's why you should consider getting someone to help you even given the tremendous negative publicity about loan mod lawyers/companies. First advice hire a lawyer who is licensed in California not some facing sounding company.

Make sure your lawyer has malpractice insurance too.

Typically the banks put you on a three month trial payment plan at which time they are supposed to offer you a loan modification. Sometimes they do sometimes they don't. The basic guideline to consider is that the payment on your first mortgage which would include principal interest, taxes, insurance and HOA fees should be between 31% and 38% of your gross or pre tax income. If you them take amount of this payment and if it would equal the mortgage payment you would have to make if your loan was over 2% and more probably in the 3% to 4% range then you should be able to do a deal. You obviously will have to have a qualifying economic hardship and it helps if your house is worth substantially less than what you owe.

As for the second it depends on whether there is any equity to cover the second. If you house is worth far less than what is owed on the first then you should be able to substantially reduce the 2nd either payment and /or principal.

To get started the bank would have demanded to two years of your taxes or a request for a tax transcript pay stubs and a whole bunch of other information. Just because they asked for it once doesn�t mean they didn�t lose it and would ask for it again. After three months even thought they have all that information they ask for it again in case something has changes. Your income or hardship circumstances could have I don�t see how your taxes returns could though.

The problem is there is a lot of fraud being committed out there and a lot of it is being done by the banks who dreamed up these schemes to get us to the point where we are today.

Besides hiring a lawyer you can go to the HUD website and get a list of free counselors and non profits, kind of like using the public defender.

Hope this helped and good luck to you.