Possibilities for Loan Modification
Surely by now everyone has heard of the latest government programs addressing the sub-prime mortgage crisis; they may even realize that there are loan modification companies out there to aid in restructuring the terms of their mortgage. What most consumers do not know is exactly how the process works and what to expect during the process.
One thing that homeowners need to realize is that expecting their mortgage servicer to be on their side and patiently walk them through each step to freedom from foreclosure is a nave, and even dangerous, supposition.
What the Government and Media Want You to Believe
Should you believe the positive spin being put on efforts to help the current economic situation by the government, as well as the media? If you listen to the nightly news, you may find yourself fully convinced that you can deal with your mortgage servicer yourself and quickly and easily restructure your loan so that you are safe from threat of foreclosure.
What they are not telling the American consumer, however, is that as a legal document, there are legally binding terms in that mortgage document which affect the available options. Sound legal advice is necessary to negotiate with the financial institution and come up with a resolution that is beneficial to all parties concerned. Without professional help, the homeowner may quickly once again end up facing foreclosure.
Homework and Research Are the Keys
Any homeowner who is considering going through the process of restructuring their loan is well advised to first do their homework. Know your options, as well as the current state of affairs regarding your mortgage.
If you are currently delinquent in your loan payments, start by determining if this has resulted in extra and undue fees being added to the amount due. Usually these fees, which can range in the tens of thousands of dollars, will be added without your knowledge. You must know exactly what you are dealing with in order to turn around the situation.
Next, pull out your loan papers and give them a thorough overview. Read all the fine print and pay particular attention to the terms regarding delinquency. Be prepared to know your rights in the case of the mortgage servicer demanding the full amount due and payable immediately. Remember, the original bank you dealt with has probably sold off the loan and no longer holds the mortgage. This can be a key concept in getting what you need to avoid foreclosure.
Do It Yourselfers Face Risks
For anyone who still wants to go it alone when dealing with the mortgagor and not contact any of the loan modification companies available to help, consider there are some real risks.
Number one is that many times the mortgage servicer will add a release of liability clause to the new terms. This means that the homeowner is signing away the right to ever take legal action against the loan company, no matter the circumstances.
The fact is that most homeowners who restructure their mortgage without benefit of professional counsel will end up facing foreclosure again within six months of the new loan. Remember that the financial institution only cares about getting their money and will not do what is in your best interests.
Using loan modification companies as your advocate to prevent foreclosure is highly recommended. These firms have the knowledge and resources to investigate what company truly holds the mortgage and how to best deal with them and respond appropriately to the legal ramifications. If you are facing foreclosure, this is no time to try to do it yourself and risk losing even more.