Banks and Borrowers, A Zero-Sum Game

The only thing certain during periods of pronounced economic uncertainty is that bean counters and lawyers at banks are hawkishly protecting their own interests. If you have a home loan and intend on pursuing a mortgage loan modification, you should know the letter of the law in your state. Here is another outstanding bank practice that could jeopardize your loan modification.

Banks ‘losing’ or ‘never receiving’ your home loan modification paperwork

Yes—bankers are a forgetful bunch when it serves them. Essentially, banks have been known to say ‘the dog ate my homework’ when it comes time to sign off on a loan modification that is not favorable for them.

Many banks operate on the margins of the tax and legal system to maximize their profits. Federal Programs such as Home Affordable Modification Program, have tried their best to pressure banks into coming to new terms with troubled borrowers—many of which are in upside down mortgages. It cannot be understated that, as profit-driven institutions—banks will always protect their bottom line. Essentially, as far as the law goes, if they can get away with it, they will go for it. They have armies of lawyers to advocate for them.

Seek the advice of professionals before  negotiations

In many cases, homeowners that have successfully renegotiated the terms of their mortgages have done so through power in numbers. In some cases, this has been through class-action lawsuits, but you need not always go that far. From the beginning, seek the assistance of loan modification lawyer and consumer advocacy groups that have your best interests at heart.