Many questions run through your mind when faced with a foreclosure notice. Should we let the house go into foreclosure? Should we fight to keep our house? How are we going to afford to keep the house out of foreclosure? Fortunately, there are some options that can help protect your house from foreclosure and keep your credit from going under. Mortgage lenders offer ways for you to catch up on late or missed payments or payoff your loan balance, without losing the home to foreclosure. In a mortgage loan modification, the lender makes changes to the terms of the loan in efforts to help you catch up or continue to make payments on their existing loan. Many lenders will waive delinquency fees, reduce the interest rate or monthly payment amounts for a short period of time for you to be able to get current on their loan.
Lenders With Bad Business Practice
There have been cases in which the lender has defaulted on their end of the modification agreement, causing significant trouble for the borrower. In some cases, the lender simply ignored the modification agreement and proceeded to make collection attempts as usual. Some lenders were charging borrowers delinquency fees, additional costs and were failing to adhere to the specified reduced terms of the agreement. Borrowers have been finding themselves victim to the bait and switch technique, thinking they were agreeing to more favorable terms only to be left owing more than before the modification agreement took place. Even worse, is those who thought they had successfully completed the payment terms of the modification agreement only to find out the bank had no record of anything, leaving their accounts delinquent and homes subject to foreclosure.
Repairing The Damage
Lenders are under scrutiny from federal regulators to fix the problem of the industry Recently, federal regulators have ordered 14 of the country’ largest banks to review their previous actions and make changes to service operations. Industry experts suggest that lenders assign each mortgage loan modification applicant to a single contact person, who will manage their agreement. Having a single point of contact will ensure that borrowers can effectively communicate any issues as they arise and be able to check on the status of their repayment agreement. A review process is being implemented that would reimburse borrowers for any “excessive penalties, fees or expenses”, if the property was improperly placed into foreclosure. The overall goal is to help the borrower be able to navigate through the process easily and successfully.