The current studies published by the Treasury reveal that the Making Home Affordable loan modification program is really a total catastrophe. In excess of 1.5 million trial period modifications have already been started ever since the plan started in 2009 and only 1% of these now have gone permanent. This is great for the 1% of people which this plan helped, nevertheless how about the other 99%? Sadly, for these particular individuals, they're confronted with the very true possibility of losing their home to real estate foreclosure or having to short sale. I have a very unsettling demonstration of a loan modification gone completely wrong that I want to reveal to you.
I personally was assisting an older gentleman with a loan modification for his own property in Van Nuys, CA. Freddie Mac is the investor and the mortgage servicing company was Bank of America. We battled in order to get him a loan mod for more than 8 months. During that time, I was provided the run around by Bank of America and also informed that the evaluation was basically pending. In the meantime, Bank of America carried on with the home foreclosure process and an auction date was put on the home. Bank of America postponed this particular sale date one time as a result of approaching review of the loan modification. The modification was still in evaluation when the subsequent auction date came up for the home. Even so, this time, Bank of America couldn't stop the auction time because it is Freddie Mac's guideline not to ever postpone a sale date more than one time. Sadly, this gentleman lost his house to property foreclosure and ended up being evicted.
This story is not uncommon during these difficult financial times. So many families have been displaced from their homes. Oftentimes, these families are dealing with medical issues and loss of income. The above example is disturbing on a couple of levels. First of all, Bank of America should have processed the modification much quicker. If they had done so, the property would never have fallen into foreclosure. Secondly, Freddie Mac should not have such a harmful policy when it comes to postponing the sale date. Essentially, this homeowner was penalized because Bank of America didn't process his loan modification quickly enough.
Bank of America's inability to process the modification along with Freddie Mac's unwillingness to postpone the sale date are just 2 examples of everything that is wrong with the Making Home Affordable program. At the same time, Bank of America never informed the homeowner that he could also short sale his house and walk away with some dignity, as opposed to being evicted by Bank of America. Had this homeowner decided to sale short his home, he could have avoided the foreclosure, had less damage to his credit and possibly received $3,000 back from the lender under the HAFA program.
Clearly, loan modifications are not the preferred method lenders are using to help distressed homeowners. Other than foreclosure, the only 2 options left to borrowers are short sale or deed-in-lieu. A real estate short sale is the best way to go because it releases the homeowner of all liability relating to all mortgage liens against the property and the homeowner can be eligible to purchase another home in as little as 2 years. A deed-in-lieu is where the homeowner essentially deeds the property back to the lender, but this is more damaging to credit and the credit bureaus treat it the same as a foreclosure.
I personally was assisting an older gentleman with a loan modification for his own property in Van Nuys, CA. Freddie Mac is the investor and the mortgage servicing company was Bank of America. We battled in order to get him a loan mod for more than 8 months. During that time, I was provided the run around by Bank of America and also informed that the evaluation was basically pending. In the meantime, Bank of America carried on with the home foreclosure process and an auction date was put on the home. Bank of America postponed this particular sale date one time as a result of approaching review of the loan modification. The modification was still in evaluation when the subsequent auction date came up for the home. Even so, this time, Bank of America couldn't stop the auction time because it is Freddie Mac's guideline not to ever postpone a sale date more than one time. Sadly, this gentleman lost his house to property foreclosure and ended up being evicted.
This story is not uncommon during these difficult financial times. So many families have been displaced from their homes. Oftentimes, these families are dealing with medical issues and loss of income. The above example is disturbing on a couple of levels. First of all, Bank of America should have processed the modification much quicker. If they had done so, the property would never have fallen into foreclosure. Secondly, Freddie Mac should not have such a harmful policy when it comes to postponing the sale date. Essentially, this homeowner was penalized because Bank of America didn't process his loan modification quickly enough.
Bank of America's inability to process the modification along with Freddie Mac's unwillingness to postpone the sale date are just 2 examples of everything that is wrong with the Making Home Affordable program. At the same time, Bank of America never informed the homeowner that he could also short sale his house and walk away with some dignity, as opposed to being evicted by Bank of America. Had this homeowner decided to sale short his home, he could have avoided the foreclosure, had less damage to his credit and possibly received $3,000 back from the lender under the HAFA program.
Clearly, loan modifications are not the preferred method lenders are using to help distressed homeowners. Other than foreclosure, the only 2 options left to borrowers are short sale or deed-in-lieu. A real estate short sale is the best way to go because it releases the homeowner of all liability relating to all mortgage liens against the property and the homeowner can be eligible to purchase another home in as little as 2 years. A deed-in-lieu is where the homeowner essentially deeds the property back to the lender, but this is more damaging to credit and the credit bureaus treat it the same as a foreclosure.
About the Author:
Want to find out more about what is a short sale, then visit Socal Short Sale's site on how to choose the best short sale real estate agent for your needs.
No comments:
Post a Comment