How To Modify Your Mortgage

There has been alot of PR from the major lenders lately outlining the trend that loan modifications don’t seem to be working as well as people thought they would.

The banks are claiming that they are seeing a rise in people defaulting on their modified loans in the 58% range.

I have commented previously that the lenders were not making meaning ful modifications designed to create a long term solution for homeowners and now here is the proof:

"Quote Dan Harris from December 15th"
from Blogged at National Association of Mortgage Fiduciaries

The reality behind the re-default rates is that the banks FORCED homeowners to accept loan mods that didn’t fit the bill.

NOW in order to stem the tide of modifications (after being bailed out with taxpayer money) they have embarked on a major PR campaign designed to make it seem like homeowners who are getting loan mods are deadbeats who can’t/won’t pay no matter what you do for them.

Lowering someone’s rate to 7% from 8.99% and allowing them to capitalize the arrears might seem like relief to a homeowner facing foreclosure.

But if those modified payments are too tight they will re-default.

What is needed is someone to expose the truth behind lender initiated loan mods and what the terms were. An in depth review will reveal the truth.

Lenders and servicers have continued their drive to maximize returns and minimize their losses by modifying loans and lowering payments as little as they can get away with.

Now that they have government money in their coffers they see no need to modify, and if they turn public opinion against modifications they won’t have to.

That is the truth!

End Quote by Dan Harris"


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Now, in an article from Monday December 22nd an Indmac Spokesman has confirmed what I said:

THIS IS EXACTLY WHY LOAN MODS ARE RE-DEFAULTING

A spokesman for IndyMac federal bank, which was taken over by the Federal Deposit Insurance Corp in August, said up until a few months ago, lenders were only tinkering with loan terms and not doing true modifications.

"Modifications in the past were never about finding the borrower an affordable payment," Evan Wagner said. "So I think it shouldn't be surprising that you are seeing a lot of these folks redefaulting."

Quoted from this article:

US mortgage re-defaults rise, no sign of slowing