Mortgage Loan Modifications

Mortgage Loan Modifications

Think First Before Paying Someone

I saw several clients this week who had lost their homes to foreclosure after paying someone thousands of dollars to modify their mortgage loans, and some others who paid thousands to have a lending compliance audit performed on their mortgages, in an effort to obtain a loan modification. While it can often be a very good idea to have someone work on your behalf to obtain a loan modification, a couple things should be kept in mind.First, there is no magic or secret recipe involved in getting approved for a loan modification: the process simply involves presenting the consumer’s financial situation to the bank in a way complies with their modification underwriting guidelines. The decision of whether to modify a loan is always left to the mortgage servicer’s discretion, and that decision is based on whether the lender will profit more by foreclosing on the home now or by allowing the consumer to pay back the money that he or she owes on modified terms. After all, mortgage lenders are in the business of making money, and they are under no obligation at all to help you. Often times, it makes financial sense for a lender to modify a loan, but when it doesn’t you can be sure that in the end the servicer will reject the application (often times after having taken thousands from the consumer in ‘trial modification’ payments pending approval for the final modification). It’s not nice, but it’s the reality.Second, the people who are now in the business of taking thousands from consumers to modify their loans or perform forensic audits are often times the same mortgage brokers who were taking thousands in kickbacks from the lending transactions that consumers are not seeking to have modified. There is absolutely no reason for anyone to pay thousands of dollars to have a forensic compliance audit done: for someone with experience in lending compliance, the process takes under an hour and can be done using inexpensive software available on the internet. Anyone who wants to charge you more than a few hundred dollars for a forensic audit is trying to rip you off.Nine times out of ten, a qualified foreclosure attorney or financial/housing counselor will talk to you for free and will give you an honest assessment of your situation so that you can create a real plan for recovery. Please consider talking to an attorney or housing counselor before giving someone your hard earned money to ‘save your home’. I’ve seen it happen too many times that consumers, desperate to save their homes, will pay more than they can afford to someone promising unrealistic results and go on to lose their home anyway. If you can’t afford your mortgage and are in danger of losing your home, mortgage modification is an option, but not the only one. Speak with a qualified foreclosure attorney or housing counselor to discover what your options are.

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