Loan Modifications and Other Tall Tales

Loan Modifications and Other Tall Tales

As a Stanislaus County short sale agent I hear from people all the time that have tried to modify their mortgage. It is pretty much the same story every time. Usually they have been trying for several months to get the modification approved. On many occasions I am told about how the bank keeps asking for the same documents over and over, usually because they have lost them. Or I hear from them that what their lender finally proposed was not much help at all.

Most of the time these people end up having to short sell their homes or worse yet get foreclosed on. In today's Modesto Bee is a front page article about the less than stellar record of banks and the government when it comes to loan modifications. One fact that really jumped out at me was that from December 2009 to June 2011 1.6 million modifications were started of which 791,000 became permanent. The Obama administrations goal is 4 million permanent modifications. As you can see they are not even close to that goal.

The article went on to say that "beginning in October distressed mortgages owned or guaranteed by Freddie Mac will also be eligible for a new standard modification if they don't meet the requirements of the government's Home Affordable Mortgage Program. The modifications would try to shave at least 10 percent off a monthly mortgage payment by stretching a mortgage out as long as 40 years."

This doesn't sound like a very good deal to me. Will reducing someones mortgage payment by 10% really help? And then to top that off they are going to stretch it out up to another 10 years? Can someone tell me how this is better? The homeowner is going to end up paying a whole lot more in the long run with this program. Of course this is government logic at it's finest. Below is a video from a former IndyMac bank negotiator. This should really open your eyes about what is going on with loan modifications.

If you have been through this modification process and you weren't approved or it didn't really help you, your next step may be to short sell your home. As a Stanislaus County Short Sale Agent I have done many short sales. I can help you through the process. After selling your home in a Stanislaus County Short sale you may be able to buy again in a couple of years. If you would like more information on Stanislaus County Short Sales give me a call. I will be happy to answer your questions. I look forward to speaking with you.