You Need A Lawyer When Doing A Modification
Most of my modification clients tried to apply on their own and got turned down. Modification involves underwriting, and underwriters are very particular.
Modification is a big deal. If you don’t get that modification, you might be foreclosed. Or you may be stuck with a high interest rate, which impact the quality of your life.
There is a lot of money involved here. If your mortgage balance is $400,000, for example, a rate reduction of 2.0% per year is worth $8,000 per year or $666 per month.
I have talked with people who have gotten 4.0% modifications, which I could possibly gotten them a 2.0% modification. Lenders give better modifications when the borrower is represented by an attorney.
Attorney Adam Deutsch says:
The CFPB uncovered many instances of loan servicers refusing to convert trial loan modifications to permanent modifications, despite borrowers having successfully completed the trial loan modification terms. …
Loan modification denial notices continue to fail to state the correct reason(s) for denying a trial or permanent loan modification option as required.”
Moreover, many servicers are failing to advise borrowers that they have the right to appeal the loan modification denial, a failure which often results in major consequences since under RESPA borrowers only have a limited time to appeal their denial.·
Servicers failed to honor the terms of in-place trial modifications after transfer. Some borrowers who completed trial payments with the new servicer nevertheless encountered substantial delays before receiving a permanent loan modification.” This is among the biggest complaints voiced by homeowners. Repeatedly I have encountered situations where a borrower has honored a trial loan modification for six months, and then immediately following the final payment the borrower’s loan is transferred to a different servicer. And, lo and behold, that servicer announces that they will not honor the trial modification.
The borrower will have to go through the modification procedure over again. We have had several modifications where a servicer transferred servicing during the modification, forcing us to redo our work for the new servicer.
James Robert Deal, Broker and Attorney
Broker with Agency One Realty LLC
WSBA # 8103, DOL # 39666
James at James Deal dot com