I am doing a loan mod and the bank can STILL foreclose?

Real Estate Agent with keller williams vip properties

I am running into alot of situations, and I would like to address in a small way.  The first is for those people who are behind on payments and currently in the loan modification process.  Please understand that just because you are in the loan modification process, your obligation to pay your payments DOES NOT STOP.  Most people think that because they are working with the bank (and hopefully the bank is working with them.....hahahaha) foreclosure proceeding are on hold.  NOT TRUE!  Once the foreclosure time line starts the banks DO NOT normally halt that process.  So what is the big deal?  Once my loan modification is approved its all good right?   Well WHAT IF YOUR LOAN MODIFICATION IS NOT APPROVED?  The bank is that closer to foreclosing on you thats what.  You need a plan "B" if you are in that situation.  You need to look at options, such as short sale etc.....This also applies if you are in a TRIAL PERIOD on a modification.  The trial period (in most cases) has no bearing on whether your loan modification will be accepted or not.  At the end of the trial period if you were already in the foreclosure process IT DOES NOT START OVER, it picks up from wherever it was prior to the trial period.   The consumer who is current on their payments and do a loan modification you are not exempt from possible issues.  The biggest I am seeing currently is the homeowner that is in good standing with the mortgage payment and is in a trial period for the loan modification.  At the end of the trial period they are told they are not qualified for the modification.  The problem I have experienced is the bank kicks the payment back to PRE TRIAL period AND wants the homeowner to pay the difference between THE TRIAL PAYMENT AND THE ORIGINAL MORTGAGE PAYMENT FROM THE PREVIOUS OBLIGATION!  What do I mean in English?  If your payment was normally $2,000 a month and you are on a trial modification for 3 months at $1,000 a month.  Needless to say that is a $1,000 savings per month or $3,000 over 3 months.  Well I have experienced the bank to DENY the modification AND THEN ASK THE HOMEOWNER TO PAY BACK THAT $3,000 SAVINGS AND PUT LATE PAYMENTS ON THEIR CREDIT SCORES WHICH OF COURSE HURTS THE FICO SCORES!   Remember this on someone who was making the payments on time and doing everything asked of them to qualify for a modification!  Is it right?  HELL NO in my opinion, BUT it is happening and you need to be aware!

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 No matter what you are going through in life it is a temporary condition and it truly is a great life.  God Bless

Elgin Walker


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Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

This is good info for homeowners who are struggling;  I admit I do not understand all the banks are doing, but it pays to be ever vigilant!

Sep 28, 2010 05:02 AM #1
Paul Molinaro
The Law Offices of Fransen & Molinaro, LLP - Corona, CA
M.D., J.D.

The trial modification is just another bank tactic to grab money - The banks were faced with upside down homes and non-paying homeowners, so they did what they had always been doing - whatever it took to keep their profits going - they promised to help homeowners if Uncle Sam would give them money, and they GOT BILLIONS in bailout money from taxpayers... they then gave the homeowners trial modifications to make it seem as though they were keeping their promises, and in so doing they continued to GET BILLIONS in bailout money PLUS MORE MONEY from the homeowners who otherwise would never have paid another dime to the banks... then when the time was right to foreclose - meaning the inventory was controlled and the borrower was out of any spare cash, sell the home through foreclosure and GET ANOTHER BIG PAYMENT... then if there was any kind of insurance against foreclosure, collect MORE MONEY on that policy.

This scam should not go without recourse. In California, there are laws in place to address such breaches of promise... and many law firms, mine included, take people who have fallen prey to the TRIAL MODIFICATION SCAM and make them into plaintiffs against their lenders. By joining plaintiffs with similar patterns of lender abuse together, these homeowners are able to afford aggressive litigation against the big banks. Visit dub dub dub dot fransenandmolinaro dot com for more information about my firm. If you are in another state, there are likely lawyers there who can help you.

- Paul

Paul J. Molinaro, M.D., J.D.
Attorney at Law, Physician, Broker
Fransen & Molinaro, LLP
980 Montecito Drive, Suite 206
Corona, CA 92879

** Any posts or comments I make on Internet are for informational purposes only. None of the information or materials I post are legal advice. Nothing I post as comments, answers, or other communications should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship. While I try to be accurate, I do not guarantee accuracy.

Feb 26, 2011 06:37 AM #2
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