Why Can't I get my loan Modified ?

If you are looking for a loan modification and have been turned down you may wonder why. If your loan is commercial you will almost always be turned down. The question is why. After all weren't we all taught that 80 percent of something is better than 100 percent of nothing ?

Here is one answer. If your loan is through Fannie and Freddie then you stand a really good chance of getting a loan modification if you meet the criteria. But if your loan is held by private investors then your chances go way down. The reason is that the clauses that allow banks to change a loan are cloudy. So while a bank can usually modify a loan that is in the "best interest" of their investor, what best interest is, is debatable. And in this case you can substitute the words law suit for debatable. Yes that's right . If you go under the bank is not liable. But if they modify the loan then the holder of the note can sue the bank for their money.

Ain't life grand? This problem needs to be fixed going forward and lets hope banks are working with investors to be able to modify loans. You may think banks are being paranoid. But when asked, Willy Sutton said he robbed banks because that was where the money is. So banks are paranoid and investors will sue. Let's hope this problem can be worked through and potential foreclosures can be modified for the benefit of all