Loan Modification – Is It Worth Trying?
A year and half ago, the government launched a loan modification program to help homeowners. The federal government’s loan modification program is unfortunately not helping as many homeowners facing foreclosure as hoped for.
Of the Phoenix area borrowers that hoped to lower their monthly payments through the Home Affordable Mortgage Program in April, over half, left the program by the end of July and they didn’t have their payments permanently lowered through the loan modification program.
Loan Modification – Good News
Good news is that some of these borrowers actually did receive help from other programs that were available; however, in my opinion, not nearly enough have been helped and way too many have lost and are still losing their homes.
Loan Modification – Bad News
Bad news is that far too many other homeowners were denied a permanent loan modification after making several months of “trial” payments and have lost their homes to foreclosure.
Some housing advocates have said that too many homeowners were strung along with a trial loan modification through the federal government’s program, known as HAMP, when the lender knew a foreclosure was not going to be avoided.
Lenders defend the trial loan modification, by saying they didn’t know all of the rules for the new federal program, so they placed a lot of homeowners in a temporary loan modification to help them avoid inevitable foreclosure. I guess it could be true they did not know the rules, but I doubt it, it’s their job to know the rules.
Now, it is quite possible a number of homeowners just didn’t meet the program’s complex and burdensome requirements, even though they had been approved for a trial loan modification.
Loan Modification – It’s Not Possible To Know -Yet
It’s impossible to know why so many homeowners were and still are being denied a permanent loan modification because lenders simply won’t comment on specific cases, and the Treasury Department hasn’t released a list of borrowers who had their trial loan modification canceled.
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Loan modification – Do or DON’T?