If your like millions of Americans still trying to get a loan modification, you can identify with the frustrations of your lender losing documentation and not returning phone calls. Unfortunately your bank is not your friend and you have to fight to get the best terms for your modification.
In a previous post, click here to read, I showed you how to properly package your documents and get it into the right hands at your lender to get you modified. Without getting your loan modification submitted correctly in the first place, you will join the legions of thousands of homeowners running around in a circle.
Who can believe that after four years homeowners and their lenders are still trying to get on the same page when it comes to dealing with underwater mortgages. Several programs by the government like the HAMP and HAFA programs meant well but was met with opposition from lenders and servicers.
Without any strict enforcement, lenders and servicers have sent distressed homeowners in a never ending circle of frustrating processes to get loans modified. While the government had high goals of modifying over 20 million loans over the past four years, only a fraction of that really occurred.
The
housing crisis has been hitting homeowners hard since 2007. The number of
homeowners facing foreclosure is staggering. Nearly 15% of homes are in some
sort of foreclosure proceeding. One out of three homeowners are “underwater” in
the value of their home, meaning they owe more than what their property is
worth.
There are
some other facts that explain why lenders are actually in favor of working with
borrowers and their legal specialists in order to negotiate equitable loan
modifications.
What
is a Loan Modification?
In simplest
terms, a loan modification restructures the terms of a loan without actually
refinancing the property it secures. Investopia defines a loan modification as
an agreement between the lender and the borrower which stipulates a long term
relief from untenable loan terms. Modification of a loan applies to the terms
governing the interest rate, the amount of the monthly payment, and in some
cases also the length of the loan.
