Trial Modification = Success, Think Again
September 21, 2010
Three months have passed since the tax credit expired, and the housing market does not appear to be showing signs of a speedy recovery. Inventory numbers are increasing and it appears that despite record low interest rates, demand is not robust. The Tri-Valley area, the area in which we specialize here at Loan Mitigation Advocates, has seen a steady rise of inventory over the last 6 to 8 months. If homeowners are unable to sell their homes and their personal situations do not improve, they may be forced to consider other alternatives such as loan modification or short sales.
For borrowers, the road to obtaining a loan modification can be an exhausting one. On average, loan modifications take an excruciatingly long time from start to finish with some modifications taking over a year to complete.
The kicker is that once a trial period modification is secured it does not guarantee that you will be given a permanent modification. We are not talking about those cases where the borrower does not follow through with the “rules” instituted by the lender. This can include the borrower missing or being late on payments during the three month period. Also, if the borrower’s situation changes drastically (ie significant increase/decrease in income or debt) can be cause for denial of a permanent modification.
Unfortunately, the situation that we are talking about doesn’t even involve negligence on the part of the borrower. Even if the borrower does everything correctly and follows through on their three month trial plan, we have seen many cases where the lender is so “backlogged” that they are unable to produce a final modification at the end of the trial period. If this happens, many lenders suggest continuing to make the trial period payments. Unfortunately, for these clients there is no timetable that is given for completion by the lenders. This is just unacceptable.
Everyday, struggling homeowners call foreclosure and loan mitigation hotlines for help on how to save their homes. This is just a small sample of a larger problem. Foreclosures, short sales, adjustable mortgages, and financial or personal hardship have wreaked havoc in the marketplace. The need for loan mitigation is paramount.
At Loan Mitigation Advocatessm, we encourage homeowners to try and resolve their situation themselves. In many cases, the homeowner realizes the complexity of the situation and that they do not have the time, connections within the lending industry or negotiation power. This is where many homeowners turn to a loan mitigation advocate. The hiring of a specialist to handle the process from start to finish can ease an already stressed situation, reaping benefits long into the future, and most importantly, help you, the homeowner, stay in your home.
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