Loan Modifications Continue to Demoralize Homeowners.
Another client complained just this morning that they had spent six months trying to get a Loan Modification approved with their lender, only to discover that they simply could not afford the remedy.
This is a real problem in the current environment. The fundamental issue with a Loan Modification is that the lender is only focused on the money they are owed and they are discounting the cooperation of the homeowner. Put a different way, the lender is assuming they hold all the cards and that the homeowner must cooperate as they dictate terms.
If the homeowner cannot afford the modified terms they then have little choice but not to make the payments. The general attitude of the lenders is that they don’t care. Dropping an unaffordable payment by a couple hundred bucks is not going to keep a family in a home. There is nothing that will force the lenders to reconsider unless you focus on a more level solution.
This brings us back to the Short Sale Solution. This actually uncovers the incentive to cooperate with the homeowner by revealing the downside of ambivalence, and the risks associated with the lack of the cooperation and foreclosure.
Again, with all the strings attached to loan modifications, it time to lose the strong moral character and get realistic about a solution. The lender is a machine and they don’t care about you. Once you accept this concept you will be much better off. Stop calling them pleading your case and hoping they will come to your rescue. Focus on a real solution.
The only good thing that I have seen recently with failed Loan Modifications is that homeowners clearly see that the lender does not have their best interest at heart. Seeing this by first hand experience is very startling. This usually puts the homeowner on a clear path of indifference with a solution and their family’s best interest at the forefront.
If you are looking for help and you want to avoid foreclosure, let me save you months of anguish and false hope. Investigate both a Loan Modification and a Short Sale Solution as a means of avoiding foreclosure. Then you will be in a much better position to make the right decision for your situation.
GHunter
October 10th, 2008 at 12:07 pm
I enjoy the addition of the blog and as always appreciate your unique insight on the current market turmoil.
April 9th, 2010 at 5:29 am
Wow great post, I’m from Australia so I didn’t appreciate the seriousness of the issue over there. What a sham, i think there would be rioting in the streets if the same thing happened here. Unbelievable!