Help with Loan Modification Problems

Help with Loan Modification Problems

Let me guess.

You can’t get a hold of anyone from the mortgage company to talk to…

You can’t get a hold of the same person you spoke with…

They lost your documents …

They want you to resend your documents…

They have agreed to lower your payments for a “trial period” of three months…

Three months pass and no word.

It’s now four months and they tell you that they need more documents.

You send the documents, they say they never received them. You send them again…

After five months they say everything is ok and that you are still under review and keep paying the trial period mortgage payment…

Six months and still no word from the lender…

Your loan mod representative, or lawyer or company representing you has taken off with your $3,000 fee…

Eight months later they say you are finished with the trial period and they are just waiting for the final contract…

Ten months, still waiting…

You begin to worry that your house may be heading for foreclosure. They say not to worry, keep sending the trial period monthly payments…

You receive a foreclosure notice.

You can’t get a hold of anyone.

You finally get a hold of someone and they say not to worry about a foreclosure, that they will postpone the sale…

You get a foreclosure sale notice (they never postponed the foreclosure) …

They declined you…

Sound familiar?

Each day thousands of hopeful homeowners are stunned to discover they have been declined by their mortgage lender after waiting months for word of their approval. These same homeowners are even more shocked to discover their lender has put them into foreclosure, or worse, that their house is now days away from sale or already sold.

Regrettably, loan modifications are nothing what they appear to be. But before we explain why, let me give you the good news

BANKRUPTCY CAN STILL SAVE YOUR HOME – EVEN THOUGH YOU HAVE BEEN DECLINED FOR A LOAN MODIFICATION.

You can file a Chapter 13 bankruptcy. This will allow you to bring your mortgage loan instantly current, pay back your missed mortgage payments, wipe out your miscellaneous debt and take your house out of foreclosure. We can probably even wipe out your 2nd mortgage.

Here is how it works:

Let’s say your house is currently worth $300,000, (it used to be worth $575,000 before the real estate crash). You owe $350,000 to the 1st mortgage, and $120,000 to the 2nd. Your mortgage payment to the 1st is $2,000 (the lender dropped it down to $1,500 during your loan mod trial period, but now that they have declined you it has gone back to $2,000), and your payment to the 2nd is $575. You are 8 months behind to the first and 2nd mortgage. This means that in order to bring your 1st mortgage current, you have to pay the lender $16,000, and you have to pay your 2nd mortgage lender $4,600. You don’t have that kind of money.

The Chapter 13 bankruptcy takes the $16,000 and puts it into a 5 year (60 month) payment plan. $16,000 divided by 60 = $266. This means you would pay the bankruptcy court $266 a month for 60 months. At the end of the 60 month period you will have paid off your $16,000 of mortgage arrears or missed payments. That’s it. Oh, we also wiped out your miscellaneous credit card debt, medical debt, personal loans and even your 2nd mortgage to zero! That is the power of federal bankruptcy law.

And if you are still interested in knowing why loan modifications are misleading, here is the explanation:

As you know, loan modifications came onto the scene after the real estate crash in 2006. Prior to that, there was no such thing as loan modifications. Traditionally, a homeowner lowers his mortgage payment by refinancing, but to do this a person must have at least $50,000 in equity. But with the crash of the real estate market, property values plummeted, and suddenly people found themselves with their homes upside down in value, thus no equity, thus no way to refinance. At the same time, their adjustable rate loans began to mature, the economy began to sink, people began losing their jobs, and now people were in serious threat of losing their homes. The media got involved and overnight the real estate/mortgage loan industry fell under fire from the press, alleging greedy lenders, unconscionable banks and unscrupulous real estate agents and brokers. To deter this bad press, the idea of loan modification emerged. What if the banks just voluntarily agreed to change or adjust the borrower’s loan? After reviewing and confirming a homeowner’s financial hardship, a bank could lower the monthly mortgage payment, reduce the interest and put any missed payments to the rear of the loan. It took off like wildfire, and within months the mortgage industry was flooded with applications, which they quickly processed and approved. Companies, real estate agents and lawyers suddenly began advertising that they were “experts” in representing clients in applying for loan modifications, charging homeowners anywhere between $1,000 to as much as $5,000. As you know, most of these companies have now been shut down, and the representatives have either disappeared or been arrested. And what happened to the approval of loan mods? Well, after the first two years, the press and media began to taper off from their pressure on the mortgage industry, and as such, the banks began to slowly decline applications.

But what about the rights of a homeowner to get a loan mod? Well, here is the answer. A homeowner has no rights – because there is no such thing as loan modification laws. A loan modification is completely voluntary on the part of the bank. Why in the world would the lender change his loan to receive less money at a lower interest rate? And even if they do approve the loan mod, they are certainly not going to reduce their profit, remember, they have their stock holders and investors to answer to. So if they do decide to approve the loan mod, you can be sure they are going to tack on additional fees, costs and the deficiency somewhere in that new mortgage contract. Either way the homeowner is at their mercy, and that is why even if your loan mod is approved, 70% of all loan modifications fail.

So what is a person to do? The first thing is to immediately meet with a lawyer who knows the truth about loan modifications and about how to truly save your home from foreclosure. The attorneys at the Law Offices of David Lozano know exactly how to proceed to save your home, eliminate your debt and get you back on the right track. Call now for a free consultation and learn what you and your family can do to save your home and your future.

Call a Bankruptcy Attorney Today!

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