Bankruptcy often provides a necessary fresh start for individuals experiencing financial problems and difficulty repaying debts. An experienced and qualified bankruptcy attorney may help reduce stress and uncertainty by providing valuable assistance throughout the entire bankruptcy process. When a homeowner decides that it is no longer feasible to continue living in his or her home, foreclosure is not always inevitable. Instead, it may be time to consider other alternatives to foreclosure that allow homeowners to mitigate the problem of a burdensome home mortgage.

*Loan Modification

The purpose of a mortgage loan modification is to make monthly mortgage payments more affordable. An affordable mortgage payment is considered to be 31% of a person’s monthly gross income. Thus, for example, if earnings are $3,600 a month, then a loan may be modified to 31% of gross income or $1,116 per month.

*Forbearance

Another alternative for borrowers suffering temporary hardships is forbearance of the mortgage loan by the lender. In this scenario, the lender agrees to not pursue foreclosure for some finite time period. While forbearance of a loan reduces monthly mortgage payments, some plan of repayment must be agreed upon for the amount of the mortgage reduction. However, in this situation, a borrower’s hardship must be temporary, such as an illness or injury that prevents work for some limited period of time, to qualify for a forbearance.

To learn more about loss mitigation options, contact the experienced Sacramento metropolitan area/Northern California attorneys at the Montefalcon Law Offices. Contact us online or schedule a free consultation at any of our three conveniently located offices. Telephone our downtown Sacramento office at (916) 444 0440, our south Sacramento office at (916) 399-9944, or our Concord office at (925) 222-5929.