EVERY single day, for the last one and half years, I’ve talked to homeowners who have been frustrated in trying to get a loan modification with their lender but not getting anywhere. Nightmare stories continue to come in droves from these homeowners who have spent months with their lender making countless phone calls and being put on hold, submitting mounds of paperwork, following up on an almost daily basis and still no answer. A lot of these people feel like they’ve been put in loan modification hell. And I don’t blame them.
Sometimes, these people come to me after they’ve already lost their home to foreclosure, in which case, it is too late and there is nothing more than they can do but to vent out their anger. Others are only days away from a foreclosure sale date after they’ve been told by their lender that their loan modification request has been denied. The fact that they are about to lose their home is a hard reality for most to accept. A lot of these people have had their homes for years. These are the homes that they’ve raised their children in or perhaps the homes that they thought they would be able to retire in someday.
I’ve talked to many people who have submitted required documentation to their lender over and over again because they are told that the bank has not received anything from the homeowner. And when they call the lender, they’re transferred from one person to another, none of which know exactly what is going on with the file. Recently, a lady came to my office crying because she said that the bank just sent her a Notice of Trustee Sale after her loan modification was denied. But the weird thing about it was that the denial letter from the bank stated that her application was rejected due to her alleged failure to provide information that she was never even asked for! This is a story that’s becoming commonplace.
Even those who have been approved for a trial loan modification period under HAMP are finding themselves in limbo. I’ve seen cases dragging out for 7-8 months and the homeowner has not received a response from the lender in spite of the fact that the terms of the trial modification have been complied with. Of course, the Obama Administration insists that the reason that most borrowers have not been approved is that because they haven’t provided all the necessary paperwork, or have been dishonest about their real income, or haven’t made their trial payments in a timely manner. That may be true in some cases but I’m sure it’s not the vast majority of homeowners.
Some homeowners have been successful in obtaining a loan modification but overall, the system is still not working as it should. If you find yourself waiting by the phone day after day waiting to hear some good news from your lender, just make that you are prepared for the possibility of a denial just in case. Depending on the facts of your case (income, amount of delinquency, amount owed on property, value of property, etc.), you may find that you may be better off filing for Chapter 13 bankruptcy to save your home. Chapter 13 immediately stops foreclosure and allows you to take care of all your other debts as well (credit cards, personal loans, back property taxes, etc).
If you have a 2nd mortgage that is not supported with equity, you may even qualify for a "lien strip" that allows you to wipe out the underlying debt amount completely or reduce it significantly. It is extremely rare for a bank to reduce the principal amount even with a loan modification but by doing a "lien strip" of your 2nd mortgage, you can greatly reduce your mortgage payments to make your home more affordable. Under new HAMP guidelines effective June 1st, you can even do both at the same time- Do a modification of your 1st mortgage and then file Chapter 13 to strip off your 2nd mortgage.
To find out whether filing bankruptcy is a good option for your situation, call toll-free 1-866-477-7772 and schedule a free consultation. We have offices in Glendale, Cerritos, West Covina and Valencia.
* * *
None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped over 4,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1-866-477-7772.
( Published July 28, 2010 in Asian Journal Los Angeles p. B2 )
| < Prev | Next > |
|---|
