Be Prepared to Do Lots of Research
Ultimately, if you decide to proceed on your own in court, prepare to devote a significant amount of time to the case since you’ll have to do quite a bit of research in order to have any chance of success.
The rules and procedures that you must follow vary in each state and sometimes in each court. Your research must cover not only foreclosure statutes and relevant court decisions, but also rules of civil procedure (the detailed rules on what should be in your complaint, how to file it, when and how to file motions), rules of evidence, and more.
State and court rules also set forth deadlines that you must meet, which means you may have to complete your research (on possible defenses, for example) and learn how to properly lay them out in your answer or other court documents in a fairly short period of time.
If you've lost work because of the coronavirus outbreak and fall behind on loan payments, loan modification could help you avoid default.
Loan modifications are most common for secured loans, such as mortgages, but you may also be able to modify other types of loans. That could include personal loans or student loans.
A loan modification can relieve some of the financial pressure you feel by lowering your monthly payments and stopping collection activity.
But loan modifications are not foolproof. They could increase the cost of your loan and add derogatory remarks to your credit report.
That doesn't mean you should avoid a loan modification. But before you jump at the chance, consider all the angles.
Do Loan Modifications Affect Your Credit?
If you're thinking about a loan modification, chances are your credit has already taken a hit. "Most customers in the process are already delinquent," Broeker says.
When you proceed with a loan modification, a comment code will appear on your credit report that says something like "paying by modified terms."
But getting back on track with payments could have enough of a positive effect on your credit over time to make up for this derogatory remark.
If you're still unsure whether a loan modification is a good idea and hesitate to extend your loan term, remember that you can refinance later, when you're on better financial footing.
"I don't think loan modification fits everybody," Broeker says, "but it's the single best tool we have from a loss mitigation perspective to keep people in their homes."