Attorney David Galler Touts the Merits of Loan Modification in Combatting Foreclosure

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In light of an October 15, 2015, CNBC article reporting that home repossessions spiked at 66% as the foreclosure crisis lingers, David Galler, of Galler Law, LLC, discusses the need for legislated loan reform.

Galler Law, LLC

The government has spent millions of dollars to provide lenders incentives to help modify loans but provides few strict guidelines or oversight. The modification process is complicated, and would be difficult even if lenders cooperate, which they do not.

“The country in the last ten years has experienced an unprecedented foreclosure crisis,” said Galler. “This is a national issue as it affects millions of people with the loss of their most important possession, their house, which provides shelter and a ‘home’ in an emotional sense.”

According to the CNBC article, bank repossessions, the final stage of the foreclosure process, jumped 66 percent year over year in the third quarter of 2015. In fact, more than 123,000 homes went back to the bank in just three months.

“Legislated loan reform is the only long-term answer to this, but provides little relief to those facing foreclosure today,” said Galler. “The government has spent millions of dollars to provide lenders incentives to help modify loans but provides few strict guidelines or oversight. The modification process is complicated, and would be difficult even if lenders cooperate, which they do not.”

Oftentimes, adds Galler, people are left with no choice but to file chapter 13 bankruptcy to stop the foreclosure, but bankruptcy does not provide many of the advantages of loan modification, such as the ability to reduce monthly payments and interest rates, convert adjustable interest rates to fixed and move missed payments to the end of the loan period. Galler further stresses that loan modification provides the homeowner the best chance to save the home because of the number of programs and changes to the loan only a modification can provide.

“However, because it is a complex formula and due to the lack of cooperation from lenders, homeowners should not complete a modification on their own,” said Galler, one of the few attorneys in Georgia that has experience at both loan modification and chapter 13 bankruptcy. “Lenders often under-staff modification departments and homeowners have to send documents over and over again, which causes long delays in processing and results in the financials often becoming outdated, requiring more paperwork to be sent.”

Additionally, Galler states distressed homeowners need to watch out of unregulated companies doing modifications that “promise” favorable outcomes. Homeowners also need to be aware that the modification can be a lengthy process and if they are in an active foreclosure, they need to realize a loan-modification application does not totally protect them from foreclosure; only a chapter 13 can stop a foreclosure by operation of law.

About Galler Law, LLC
Galler Law, LLC has been serving Atlanta and all of Georgia for over 27 years in bankruptcy, workers’ compensation, student loan debt and mortgage modification cases. They work with each client to ensure that their individual needs are met, providing the kind of personal service not found at most larger firms. For more information or a free consultation, please call (404) 835-2911. Galler Law is located at 750 Hammond Drive, Building 6, Suite 100, Atlanta, GA 30328.

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Tiffani Tendell