forward without any communication between it and the modification department. The advice I received was that if you are in a loan modification program and you have received a foreclosure notice before or after entering the program, then call the phone number provided in the foreclosure notice on a regular basis to ask about the status of your foreclosure. One person, had a client that called and was informed her house was going up for auction that very day, calling got it cancelled.
Debt
So, you and the bank talked and came to some agreement about modifying your mortgage payment. The new terms are good, but it was likely just a trial period that would only last a few months. Are you sure you understand the nature of the agreement you made with the bank? Some of the brokers told me stories that while the banks reduced the monthly payments to clients; the debt was still building up. At the end of the trial period the banks basically asked for the difference between the new payments versus the old. Don’t have it? Guess we will foreclose!
I hate to be cynical, but I wonder if the banks are just playing games with consumers. Think about it. The homeowner stops making payments, the bank thinks it needs to foreclose, but it has two problems; there’s no money coming in at all and vacant homes get damaged. Solution, keep the homeowner in there taking care of the house and get them to start paying their mortgage again, albeit at a discount, until you’re ready to foreclose.
Yes, the homeowner does benefit in that they remain in their home at a discounted price, however it is a cruel joke when they find out things are not going to be alright after all.
Bottom line, understand all the implications a loan modification can mean to you in the short and long term.
