by Fred on October 5, 2009
Effective October 11, 2009 in California, our state legislature will be implementing to the new regulations aimed at shutting down unscrupulous loan modification companies that take people’s money and run, without providing loan modification services. California AB 764 and SB 94 has been signed by the governor. Many cases have been reported of homeowners facing foreclosure and entering into a contract with loan modification companies, with fee paid up front, but the loan mods never go through.
Many of the problems with newbie loan modification companies is their lack of understanding of bank policy regarding the modificiation of the loan. Unfamiliar with the bank policies theses loan mod companies take clients whether they are qualified or not. The end results is homeowners in foreclosure do not get their loan mod, and lose their home to forclosure. This has been the case with many San Diego homeowners facing foreclosur, and turning to late night TV advertisers that claim that they can modifiy your loan if you are in foreclosure.
The new legislature goes into effect October 12, 2009.
by julie on September 29, 2009
Loan Modifications: An Effective Way to Stop Foreclosure?
We often get the question on whether a loan modification will stop foreclosure.
Unfortunately the answer to that question is: It Depends.
It depends upon the following information on whether a bank will stop foreclosure on a property that is in default:
1. It depend upon the bank. Different lenders have different rules.
2. It depends upon the financial situation of the homeowners. Banks have specific formulas on how they determine if a homeowner is qualified for a loan modification
3. It depends upon when the forcloure sale date it. If the foreclosure is less than a week away, many times the bank may not postpone the forclosure.
4. It depends upon whether the house has equity or not.
5. It depends upon the neighborhood the house is located in. Are there other foreclosures in the same neighborhood? Are homes selling fast or slow?
6. It depend upon who actually owns the loan. If it is a direct lender such as Wells Fargo, then a loan modification may be easier and a postponment easier as well.
7. It depends upon whether all the loan modification paperwork is in their hands compared to the foreclosure sale date.
8. It depends upon whether the house is your primary residence or a rental or secondary home.
For example, if you have an Indymac loan and it is a rental, then postponing the foreclosure using a loan modification most likely will not happen. Indymac does not do loan modifications for rental. If you have a Countrywide loan, their loss mitigation department encourages loan modifications. Same for Bank of America loan modifications.
So the real answer to the question whether a loan modification will stop foreclosure is that it depends upon your particular circumstance.
A decent loan modification professional and a 15 minute interview may determine if a loan modification is an effective tool to stop foreclosure.
