I just received an update today on a client going through a 1st mortgage loan modification. As most are well aware, a loan modification is an option made to a borrower who is struggling to make their payments due to a hardship, who is not able to refinance their mortgage.
This client qualified for the program, completed the three month trial period, and still hasn't received the final modification paperwork. Instead, he received a "summons" and an "appearance" from the mortgage companies attorney after making the first payment on the modification.
This frustrated and scared the client. The client went to the courthouse to make his "appearance" and to answer the "summons". Of course, this cost additional money and time that he didn't have to waste. But in order to protect his family from losing their house he had to do this.
He has now made the fourth payment and his fifth payment is due January 1, 2010. The lender has repeatedly told him to continue to make his trial period payments and that they are backlogged. The lender does not know when the loan will be permanently modified or if it will be permanently modified. They just say to keep making the payment.
Well, yesterday the client received more foreclosure paperwork that of course frustrated and scared them again. They have been told all along that everything is "fine . . . just keep making your payments . . . we're backlogged." But the lender continues with the foreclosure proceedings. Now their is a "motion for summary judgment", "motion to appoint selling officer", "order to appoint selling officer" and "judgment for foreclosure and sale".
The client called once again and was told to keep making the payments . . . but with no guarantees.
All of the terms of the loan modification were followed to a tee. That is where the client is starting to get very nervous. If they are going to lose the house they would at least like an opportunity to keep a foreclosure off the record by doing a short sale or a deed in lieu of foreclosure.
That's an update on this great Obama plan that is supposed to help many people save their homes during this tough economy. Making Home Affordable is a blessing to many people, but only if it works.
Let's hope, for this client's sake, that this is one plan that works.