So you think your special and want to try for a loan modification? Your situation is different! I think you are researching and interested in this post because you are investigating the possibilities. Situations like yours are playing out all over the country right now and it's a great idea to arm yourself with as much information as you can.
Can I really get one? That's a question that many have tried to answer and I'm sure that you won't be thrilled with the information you find. Many homeowners are lulled into believing there is hope and loan modification will be granted. The poor homeowner is lead down the 'path' which is really heading to foreclosure. Remember the song 'follow the yellow brick road?'
This is a great post from Pamela Seley a short sale specialist in Temecula, CA.
The Loan Modification Seesaw
Remember the seesaw on the playground? It was always a surprise to me when my playmate on the other side decided suddenly to jump off without warning. That’s what it’s like for many homeowners during the loan modification “review” process.
One day they’re out and told they do not qualify for a loan modification. The next day they’re in, and told their paperwork is “under review.” “Under review”, especially if it comes on the heels of “you don’t qualify”, usually means the loan servicer is stalling before they jump off the seesaw and foreclose.
I’ve heard this same story from several of my clients and other homeowners who lost their homes to foreclosure. It’s the recurring, nightmare loan modification story of their attempts to work out a loan modification with their loan servicer, Bank of America.
Bank of America reached a settlement of $8.5 billion (that’s billion, not million) to pay investors that lost money on mortgage-backed securities on Countrywide’s bundling (and re-bundling) of risky residential first liens. Bank of America inherited a mess from Countrywide when they bought out CW in August 2007.According to WSJ, it may have been the worst acquisition in banking history, but will this settlement help homeowners now who are in default of their mortgage loan serviced by Bank of America?
The theme of NY Times article, “Bank’s Deal Means More Will Lose Their Homes,” says what I’ve concluded these last several months. Loan servicers, especially Bank of America, do not want to modify mortgage loans. Lenders are not in the business of loan modifications. Homeowners, who are in default, will be most likely on the fast track to foreclosure.
The article also points out that part of the settlement requires Bank of America to send out many of their loans to other, smaller loan servicing companies. If default is imminent for those homeowners, they may be one of the lucky borrowers, because they may now have a fighting chance at a loan modification through their new servicer. Time will tell later this year.
I’ll keep my hopes up that loan modifications will become a real solution to our housing recovery. However, the end of the NY Times article describes from a Bank of America customer what I’ve heard over and over from several different homeowners in Temecula Valley California about their loan modification attempts with Bank of America.Just as I learned which of my playmates would choose to jump off the seesaw without warning, my advice is to plan for the landing.
Pamela Seley, REALTOR®
Short Sale Resource | CA DRE lic # 01824145
www.temeculavalleyhome.com | Dir 951.491.4063 | Email pamelaseley@gmail.comServing Southwest Riverside County California | Temecula, Murrieta, Menifee, Winchester, Lake Elsinore, Canyon Lake, Corona, Wildomar, Hemet and San Jacinto Valley
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All information deemed reliable, but not guaranteed. Copyright © 2009-2011 by Pamela Seley, REALTOR®
For sure they don't know which end is up! I have been trying to reach a BOA person for months now on a home in my neighborhood where I have a BUYER! No calls back, no response, very frustrating.
Lyn, I'm pretty happy that we haven't had to enter the distressed property arena. It has to be SO frustrating to routinely deal with the banks, either as a consumer or agent.
Paula: I feel they are the worst bank in the industry. I don't feel sorry for them one bit buying up all the toxic assets of Countrywide.
BLiz: I have not delved into loan mods at all but I just heard a new offering that just might put the consumers in a hopeful state. I haven't heard of one person yet that has gotten one & borrowers don't seem to understand that the banks do not have to do them. In fact, the cards are stacked against the borrower because it's financially beneficial for the bank not to do it.
BofA really does suck. We tried to modify when we were Countrywide. Then five, yep 5 more times with BofA. They kept saying no. Then the told us to make 1/2 payment. This went on for 1 1/2 years until suddenly we got a Notice to Accererate! Really? You TOLD us to pay 1/2. So we got a lawyer who actually got the mod. But was it worth it? In four years, our payment will be more than when we originally started. So, who wins in the end? BofA.
Sorry, this subject makes me so mad everytime I read about it. But I appreciate you, Lyn, for reposting this so I could read other people's opinions and stories.
Lyn, thanks for the reblog. I'm glad I stopped by. Linda's story is another example how it's stacked in the bank's favor.