The Truth About Trial Loan Modifications

As more and more homeowners are facing financial hardships, the number of loan modification applications being processed by mortgage lenders continues to rise. In an effort to avoid foreclosure, many strapped homeowners are being granted trial loan modifications with the promise of approval for a permanent loan modification in three months.  Many mortgage lenders have been accused of giving false hope to many of these borrowers by offering them a trial loan modification with no intention of ever offering them a permanent modification.

There have been many cases recently in United States Court systems wherein homeowners have been granted trial loan modification periods by their lenders, went on to successfully make their three mandatory trial payments with no indication of ever being granted a permanent modification! Some of these homeowners have even been served with foreclosure notices in the middle of their trial periods while they were successfully paying their mortgages.

In some cases that have made it to bankruptcy court, it has been found that many lenders do not respond to homeowners’ attempts at contact during the three-month trial in an effort to get as much money as possible from the borrowers before finding a glitch in the application and foreclosing anyway.  Some lenders have also been caught manufacturing information, such as “missing paperwork” that caused a denial of a permanent loan modification, wherein the “missing paperwork” never even existed.

 If you are in loan modification hell, be persistent. Call your lender daily until you get the answers that you need to make your loan modification permanent.  If you continue to get the runaround or are being told false information (one homeowner was told that her application was denied because she is no longer living in the home – which was false), try calling the Treasury Department to complain about the lender’s actions. (If your lender is a state-chartered institution, contact your state banking regulator.)

 Individuals who have filed lawsuits against their lenders for bad-faith practices in small claims court have had the most success in being granted the permanent modification they desire. If you are not getting the answers that you need and you have been faithfully paying your mortgage every month with no response from your lender about a permanent modification, call the Veitengruber Law Firm to check over your mortgage agreement  language. Let us deal with your lender directly; sometimes just the threat of a lawsuit will spur them into action. Rest assured that by contacting a qualified attorney, you’ll get the help you need to avoid foreclosure.

Photo courtesy of Bogie Harmond

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One Response to The Truth About Trial Loan Modifications

  1. Pingback: Applying for a Mortgage? Read the Fine Print! « Veitengruber Law

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