Ann Arbor Real Estate Attorney

Can I Modify A Fixed Rate Mortgage Loan?

Part of the reason for the collapse of the real estate and financial industries was the number of borrowers who applied for adjustable rate mortgages and couldn’t afford the increased interest payments as their loans matured. Lured in by low interest rates and equally low monthly payments, borrowers began do default as their banks demanded higher monthly payments as per the terms of their original mortgage contracts.

Ballooning and unpredictable monthly payment amounts are what make holders of adjustable rate mortgages the usual candidates for home loan modifications. The language of an adjustable rate mortgage contract allows for every monthly payment to be different after the introductory fixed rate term has expired. When a person can’t plan their monthly payments, they often begin to fall into default, which is perhaps the biggest flaw of adjustable rate mortgages. Many consumers think that just because their mortgage rate is fixed that they are not eligible for home loan modifications. This is not true. Holders of fixed rate mortgages can qualify for home loan modifications as long as they meet certain requirements established by law and / or their lenders.

The requirements that must be met will differ from lender to lender, so it is important for the borrower to understand the policies of their lender before submitting a request for a loan modification. Holders of government sponsored loans may be required to meet additional requirements, so it is important for borrowers to understand what laws apply to their loan. Contact a local bankruptcy or real estate attorney for more tailored guidance on the steps to requesting a loan modification from a particular lender in a particular jurisdiction. Some states have laws that may affect the loan modification process.

In many cases, the holders of fixed rate mortgages can be approved for home loan modifications if they can provide evidence of a financial hardship that threatens their financial security. The loss of a job, presence of a medical emergency, etc. are examples of hardships that could make it difficult for lenders to stay on top of their monthly mortgage payments.

A person with a fixed rate mortgage is able to plan for their monthly payments better than a person with an adjustable rate mortgage, which makes the presence of an unplanned hardship a necessity
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in most situations to get a loan modification approved. Some lenders will even require their borrowers to be in default before they will entertain the idea of a loan modification.

Home loan modifications are designed for borrowers who need assistance from their lenders to keep from losing their homes. They are not designed for borrowers who just want to pay less every month. Borrowers who are not facing hardship should not apply for home loan modifications because this just slows down the process for everybody else. Borrowers who just want to save a couple hundred bucks a month should start clipping coupons and cutting down on their daily gourmet coffee intake, not applying for loan modifications they really don’t need.

By: Timothy McFarlin

Article Directory: http://www.articledashboard.com

The author is an authority in bankruptcy and loan modifications

A power of attorney form is a type of legal form that is commonly used for conducting basic personal and business transactions, including matters that relate to banking, loans and real estate transactions. In particular, a power of attorney authorizes a specifically designated third party (known as the “agent”) to engage in certain tasks (e.g. banking transactions) on behalf of the person granting the power (the “principal”).

Power of attorney forms are frequently signed in connection with transactions involving real estate. When someone executes a power of attorney which conveys confers upon an agent the general authority with respect to “real estate transactions,” the power of attorney form will generally be viewed as authorizing the agent to execute and deliver deeds, leases, mortgages, and other legal documents relating to the purchase, sale, transfer, encumbrance or leasing of real property.

In many jurisdictions, an itemization of powers that are deemed to have been granted by virtue of a power of attorney is set forth in statute. For example, in New York, the scope and limitations applicable to various forms of powers of attorney are set forth in the NY General Obligations Law. Within that law, there is a particular subsection which explicitly sets forth the powers of an agent to execute legal documents relating to real estate. Pursuant to Section 1-1502A, a power of attorney for real estate is generally interpreted to include the authority “[t]o execute, to acknowledge, to seal and to deliver any deed, mortgage, lease, notice, check or other instrument which the agent may think useful for the accomplishment of any of the purposes enumerated in this section.”

Before signing a power of attorney form, it is important for that the principal carefully consider the scope (extent) of the powers that he or she is granting to the proposed agent, and to be sure that the any limitations on the agent’s powers are specifically and clearly set forth in the power of attorney form. It is also essential that the principal be familiar with his or her agent. Court cases involving agents who have allegedly abused the powers that were granted to them in power of attorney forms are not infrequent.

By way of example, the Court of Appeals for the State of Kentucky recently considered a case in which family members of a deceased woman accused her bank of improperly honoring a power of attorney form in which the decedent had conveyed broad banking powers to a third party. Apparently, the agent abused his or her authority and misappropriated funds. The Kentucky Court ruled in favor of the bank, concluding that the bank had neither the duty nor the ability to investigate the circumstances pursuant to which its deceased account holder had granted a power of attorney to the third party.

In summary, with regard to powers of attorney, three key considerations include: (a) if you wish to enter into a power of attorney, be sure to use a state-specific form that has the legal language needed to ensure that it is valid and enforceable; (b) carefully evaluate the trustworthiness of the potential principal(s) to whom you are granting powers; and (c) carefully review the language in the power of attorney form to ensure that the powers conveyed are narrowly drafted so as to serve your needs, without opening the door to uses that are unintended and/or unanticipated.

Templates and sample power of attorney forms are generally available for download online. Such power of attorney samples should be used for guidance, and will likely need to be edited to suit your individual requirements and concerns.

This article is brought to you by Marc A. Rapaport, Esq., a New York City attorney and the founder of http://www.ASAPLegalForms.com, an online supplier of legal forms for business and personal use. Mr. Rapaport regularly appears in the national media to discuss legal issues facing American consumers and small businesses. For more information regarding real estate forms, deeds, and powers of attorney, visit http://www.ASAPLegalForms.com.

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