FORECLOSURE   is the legal process in which a lender or association attempts to obtain title to a property as a result of a default of payment.  The Plaintiff is required to prove to a Court that,  as a result of a default by the owner,  the owner's property should be sold.  If the Plaintiff is successful, the Court will order that the property be sold and the owner removed from the property.    After the sale, the Plaintiff may ask the Court for an award of money because the sale of the property did not generate enough money to satisfy its claim.  This is called a deficiency.

The lender must   follow the correct legal procedure and properly prove its case to the Court.  There are numerous steps and protections for the Defendants.   It is advisable to have a professional review the documentation that the Bank files with the Court.  Sometimes the Bank makes mistakes or does not follow the correct procedure.   The process is not automatic and may take many months.   There are numerous cases in which the process has taken years.   There are also cases in which the Bank  has not been able to prove its case was not allowed to foreclose the property.   The Defendant has numerous rights and defenses to the action for foreclosure which must be raised or they are waived.  

Paul Contessa has experience in foreclosure defense and can present your rights and defenses in the foreclosure process.

MORTGAGE MODIFICATION  is a voluntary procedure in which the lender reviews facts about the property and the financial situation of the borrower and changes the terms of the loan so that the borrower can make more affordable payments.  The borrower or his agent contacts the lender and requests a modification and the lender may indicate the information it will consider.

The lender may or may not allow a modification. The decision is up to the lender or its investor.  It does not matter how much you pay an attorney or realtor or whether you make temporary payments.   No one can force a lender to accept a modification.   In many cases, despite need and the loss in value of the property, the lender will not allow a modification. 

The foreclosure process is independent of the modification.  If you are served with legal papers which includes a Summons and a Complaint for Foreclosure,  do not neglect the foreclosure because you are attempting a modification.  The attorneys for the lender do not know about the modification.  They do not stop foreclosing because the borrower is attempting a modification.  Do not waive your rights while attempting to modify a mortgage.

A modification may reduce the interest rate or principal or, in some cases, both.  If the interest rate is reduced the payments will be reduced for a period of time.    Frequently,  the balance of the missed payments will be added to the end of the loan.  This provides temporary relief but may not provide permanent relief if the balance of the loan is in excess of the value of the property.  Some modifications will allow the reduction of the principal on the loan.  This provides a better long term solution when it is available.