Home > Industry > Hooked on Loan Modification woks for me!

Hooked on Loan Modification woks for me!

Surprisingly this has happened twice to us in the last month. A home owner signs up for loan modification due to a personal/ financial issue and doesn’t realize what this will do for their loan.Money for loan mods

You may already know, Loan Modifications allow homeowner who are having an issue pay less per month for their home then the current payment. In desperation, many homeowners have signed up for this program without reading the fine print in the contract or understanding the long term implications. They think the reduced payments are the banks way of helping them. But this program is not much help to most homeowner. While it allows a reduction in payments, the interest still accruals. Forcing the homeowner deeper and deeper into debt.

Recently my partner and I have had two different sets of clients who were about to close on the sale of their home only to find out they were on a loan modification and owed much more then they thought. Now the homeowners are really stuck! The owners payoff is more then their net and they don’t have the cash or credit to make up the difference. They can’t sell the house but can’t afford to keep it. We could try a short sale, but it takes months and they have a contract to close very soon. They face a potential lawsuit from the other party for non-performance. The selling realtor threatened my partner with a lawsuit saying “You should have known about this!” Lets face it, how often does a loan amount go up in six months.

So here are a few suggestions.

* Call your bank before listing your home to get your exact payoff
* Inform your REALTOR if your on a loan modification program
* Ask your REALTOR for your estimated net at closing
* Check your balances monthly!!!!

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