Stop Foreclosure Answer

You would think that when a person facing foreclosure has their loan modified it should be the right one for their situation.  After all they have to submit detailed information on their finances including their income, assets and debt.  The mortgage company carefully reviews all of this and modifies their loan so that the person is able to make the new monthly payment and save their home from foreclosure.  Well let me tell you

It Always Does Not Work That Way 

 I recently read about a man in Arizona and had to let you know what happened to him.

This man asked his mortgage company for help in October of 2008.  At the time he had bee making the monthly payments on his mortgage on time.  However, he knew that would not continue.

His annual income had dropped by $30,000.  He worked for Boeing and was earning $50,000 a year.  That job was safe.  However, he earned about $30,000 as a loan officer.  That income disappeared.  His girlfriend who lived with him was out of work.

His mortgage company told him that since he was not behind on his payments, he did not qualify for help. Several months later he did fall behind on his payment of $2,000 each month.  When the Making Home Affordable Modification Program was announced in March of this year, he checked and saw that he was eligible for help.  He sent information on his income, assets and debt to his mortgage company.  They told him that they would get back to him in 30 to 60 days.  By then his savings were exhausted.

Several weeks later he got a foreclosure notice from his mortgage company in the mail.  He called them and explained that he applied for a loan modification.  They put the foreclosure on hold for a month while his application for the modification was considered.

Sometime later his mortgage company sent him a package via Federal Express.  In it was a contract lowering his monthly payment by 50% for six months.  They asked him to sign it and send it back to them. The letter said that this was to demonstrate to the mortgage company that he would have no trouble making the payment on time for each of the six months. He was happy when he received that.  He felt that he would save his home.  He signed the contract and sent it back with his first check.

A week later he received another Federal Express package.  This contained a letter from his mortgage company congratulating him.

His Loan Modification Was Complete.

His New Payment Would Be $150 More a Month.

 Yes, that was $150 more a month than his original payment – the one that he could not afford to make in the first place.

He called the mortgage company and was told that he could reapply.  The review might take 90 days.  There was also no guarantee that foreclosure might not take place before then.  At that point he asked to speak with a supervisor of the department.  He was put on hold and then disconnected.

This man did not know whether he was going to continue to try to get his loan modified.  Would you say that he is frustrated?  I know that I would.  If I were in his position, I would be ranting and raving.

Let’s Take a Closer Look At This

 First -the modification proposed by the mortgage company was nowhere near what the man expected.  Especially after he got the Federal Express package the week before with the contract reducing his monthly payment by 50%.

Who controlled the entire process? Be he or his mortgage company?  I would have to say that it was his mortgage company.  He did submit the application on his own.  After that there was very little contact between him and the mortgage company.  He didn’t call them on a periodic basis.  He had no idea of when he was going to hear from them.  He was surprised when he got the first Federal Express package.  He had to be more surprised when he got the second.

So his mortgage company controlled the process.  He had no input into how the loan would be modified.  He had no idea of what they were going to propose.

Second – This man handled everything on his own.  He had no one representing him.  He did not get the help of a lawyer or an expert in loan modifications.  If he did get someone to represent him, they would have told him what to expect.  They probably would have been in touch with his mortgage company more frequently.  The loan may have been modified more favorably.  If It was not, they would have taken more decisive action when the  second Federal Express package was received.

If you are facing foreclosure, you should only represent yourself if you feel that you are really qualified to do so.  If you’re not, get either a lawyer or an expert in loan modifications to help you.  Don’t allow your mortgage company to dictate the terms of the loan modification they will give you.

You also want to get as much information as you can on the foreclosure process and the steps you can take to save your home.  One place you can get more detailed information is my EBook.  You can get more information on it by clicking Stop Foreclosure.

Much Success,

Mark Elkins