LOAN MODIFICATION GONE BAD..NOW WHAT?
I had the opportunity to speak with a distressed homeowner and I was truly heartbroken after I heard his story. He was a victim of bad, wrong, incorrect advice.
Two years ago, his income was reduced but he was still able to make his mortgage payments. One of his neighbors told him that he had not make a mortgage payment in over a year "Thanks" to this firm that's working on a Loan Modification for him. He gave this gentleman their information and of course he called them immediately.
They asked him to pay $2500.00 upfront and $375.00 a month for them to work with his Lender to get his mortgage payments and the principal. Upto this point, he was current on his mortgage, however, he was advised by this firm he had to be in default in order for his Lender to grant him Loan Modification.
Seventeen months later, he was served with "Foreclosure" papers and that's when he called me to see if I could sell his house as a Short Sale as he did not want the word "FORECLOSURE" on his credit report.
Sadly, he's not the only one in this situation. There are many homeowners who are trying so hard, selling everything that's worth money to pay these firms that are offering just bad advice.
Here are SOME FACTS about Loan Modifications;
-Loan Modification is very similar to "Loan Approval" your Lender will look at debt-to-income ratio. If you have other debts besides your mortgage and your income is less than your outgoing expenses, chances of receiving Loan Modification is slim.
-The Lender may NOT agree to Loan Modification
-Foreclosure process does not STOP while you're trying to workout a Loan Modification
-Lenders DO NOT charge upfront fees to review Loan Modification requests
-Homeowner requesting Loan Modification must submit some documents for Lender's review(ie tax returns, bank statements, pay stubs)
Banks are open to working with homeowners to avoid foreclosure. If Loan Modification does not work..there are options.