The Truth About Loan Modifications

The Mortgage Modification Trap

Mortgage modifications are almost always a bad idea for homeowners.  Since few modifications actually reduce the amount of the loan to the market value of the property, mortgage modifications generally trap unwary homeowners in underwater loans that are harmful to their financial future.  If you are considering applying for a mortgage modification, we strongly encourage you to take a much closer look at whether a modification will end up hurting you much more than it helps.  Most homeowners will be much better off financially in the long term if they simply walk away from a toxic loan by engaging in a Strategic Default with the assistance of an experienced law firm.

HAMP

The Home Affordable Modification Program (HAMP) that was supposedly intended to help millions of homeowners avoid foreclosure is a dismal failure.  In the past two years, only about 500,000 homeowners have received any type of modification under the program, and the vast majority of those modifications trap the homeowner in an underwater mortgage owing more than the property is worth. Lenders and loan servicers have created a truly nightmarish scenario that keeps applicants for loan modifications in limbo and seems to intentional place obstacles in the path of those homeowners who are working in good faith through the modification process. 

The outgoing Inspector general of the TARP program Neil Barofsky recently testified before Congress that there is "basically universal agreement that the HAMP program is failing to meet TARP's goal of preserving home ownership."

Almost daily, Florida homeowners tell us of horrendous mistreatment by their lenders and loan servicers when applying for a loan modification.  Banks and loan servicers falsely claim not to have received paperwork sent by homeowners.  Applications get stuck in modification limbo with no response or decision.  Applicants are denied modifications after loan servicers misrepresent that they never received requested documentation.  The process drags on for months and even years while interest continues to accrue and lenders continue to charge late fees.  The entire process appears to be riddled with abuse, deliberate dysfunction, and misrepresentations and lies from banks and servicers.

Some homeowners are offered a "trial modification," and the lender or servicer promises to give them a permanent loan modification if the homeowners makes their trial payments on time for three or four months.  All too often, the lenders then fail to convert the trial modification into a permanent one, and homeowners are stuck in a temporary modification with no permanent solution.  Many times, the lender or loan servicer will collect trial payments for many months, and then wrongfully tell the homeowner they are no longer qualified for a modification because they failed to submit requested documentation.

For even those lucky few who actually obtain a permanent loan modification, they are often worse off than before.  Even though a loan modification may reduce your monthly payments in the short term, you will ultimately wind up paying much more money on the loan than the house is worth.  Short term relief results in significant long term pain.

Unfortunately, mortgage modifications are almost always a losing proposition for homeowners.  Don't trap yourself in a predatory mortgage modification.  In most cases, homeowners will be better off walking away from an underwater loan.  The Forrest Law Firm's Strategic Default Plan may just be the solution you've been searching for.

Sarasota and Bradenton Foreclosure Defense Lawyer

Call The Forrest Law Firm today at 1-800-915-3923 for an informative and comprehensive consultation on how The Forrest Law Firm Strategic Default Plan® can help you.