Rarely have I heard a disparaging word about Wachovia, particularly when it pertains to short sale. But is that what they want? To do a short sale rather than help a homeowner with loan modification?
HORRORS!
Homeowner bought her place using Wachovia's Pick-A-Payment Plan which was recently on the news because of mortgage loan class action settlement.
PICK-A-PAYMENT PLAN
This article explains that
"The Pick-a-Payment mortgage loan permitted borrowers to select and make a minimum payment amount for a limited time under certain conditions. When a payment was insufficient to pay the interest owed, unpaid interest was added to the loan balance and the outstanding loan balance increased (a practice called “negative amortization”). Plaintiffs in the Wachovia mortgage class action lawsuit claim that Wachovia did not adequately disclose the Pick-a-Payment loan’s potential for negative amortization."
TWO YEARS LATER.....
For nearly two years, the homeowner attempted to get a loan modification, and even hired someone to work on her behalf. Unfortunately, she received bad advice --- very common, but bad advice nonetheless --- to miss payments. She is now so much in arrears that it's difficult for her to catch up. She has a genuine hardship in that the economy affected her business which resulted in less income. On top of that, her interest has risen to 7%!
She would rather keep her home, and is still trying to do a loan modification. But Wachovia seems more intent on rejecting her loan modification and is pushing her to do a short sale or do a deed in lieu of foreclosure.
SHORT SALE MORE PROFITABLE THAN FORECLOSURES?
We've heard that banks make more money on short sales than they do on foreclosures, but wouldn't they rather keep the homeowner who is already their client in the home, and attempt to do a loan modification instead?
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