Robo-Signing and the Foreclosure Moratorium
It sounds like good news that foreclosure filings for October were way down. Unfortunately, you cannot take that statement at face value. The only reason for the lower numbers was because of the foreclosure moratorium due to the robo-signing scandal. In case you don’t understand what robo-signing is, it means signing documents without verifying the accuracy of its content.
The truth be told, very few of the homeowners will get their houses back if they haven’t paid or if they can’t catch up on their mortgage. But, what if there truly was a mistake and the original homeowner wants their house back? The purchaser of the house would get their money back if they purchased title insurance which most mortgage companies require. The original homeowner usually ends up with a monetary settlement, since in most cases they have already moved out.
The Loan Modification Process and Your Sanity
When first applying for a loan modification and reading the directions, it appears relatively a snap. In actuality, less than half of the people have gotten a loan modification, and the number drops considerably when we are discussing a permanent modification. It is a little like winning in the lottery. I believe there should be support groups for those going through the process.
Unfortunately, HAMP is a voluntary program and only Freddie Mac and Fannie Mae must participate. The other lenders get to make up their own rules and strategies as they see fit and are rarely consistent. Also, changing rules, by our administration, make it difficult to participate in the HAMP program.
There are also problems with training departments, since you will get differing explanations from representatives and the directions you need to complete the process. If this isn’t difficult enough they are constantly losing paperwork, even though they outsource companies to pick up the borrower’s documents. Save everything you send in, and update it every time you get a bank statement or pay stub. The lenders have several departments, one assumedly working on your modification and the other department pestering about your default and upcoming foreclosure, and one has no idea what the other is doing.
Do not include your 401 (k). They are not to be counted in the loan modification process at this point of my writing. Who knows what will change? There is no appeal process, but you can just start from square one and apply again.
Please feel free to contact me with any of your questions that I might be able to help you with.