A Loan Modification with a Happy ending

by Hermin Dowe on October 1, 2012

The financial meltdown that clobbered this country was widespread.  It affected hard-working people who thought they were on the road to achieving the American dream:  home ownership and retirement savings.  It came as a shock to many as they watched their income disappear and their homes threatened.

Sometimes, though, when hard-working people decide to put an end to the bleeding good things can happen.  Here is one of those stories:

In 2010 we filed a chapter 13 bankruptcy for a hard-working young woman whose home was threatened with a foreclosure sale.  We stripped off the second mortgage saving her almost $100,000.  Her first mortgage payment was $1,700 on an outstanding loan of $464,000.

For this client continuing to make her mortgage payment was a major struggle, but she persevered. Then her first mortgage holder, a major player in the banking industry, followed not only to modify the monthly payment of $1,700 down to $1,100, but also to reduce the balance owed on her mortgage by $325,000.  Yes, you read that right. They cut $325,000 off her outstanding balance. This is huge!  By filing a chapter 13 bankruptcy this client has gained the benefit of a $325,000 loan reduction plus elimination of the second mortgage of $93,000 for a total saving of $418,000.

This is a phenomenal result knowing that when we started this process she had a housing obligation of $565,000.  Two years into her bankruptcy she now has a mortgage of $155,000 and monthly payments of only $1,100.

Not all outcomes are this dramatic but if you are having financial difficulties give us a call at 510-233-7700.  You’ll be pleasantly surprised at what we can achieve for you.  At Dowe Law we are committed to doing the best job for you.  Call and come in for a free assessment of your own situation.


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