Loan Modification Alert!
I just ran into a startling livinglies post.
I knew there was something bothering me with the loan modification process, and it’s so simple, the true owner of the loan is an investor that is paying a fee to the bank or servicing institution for the service of collecting his monthly payments —that’s the guy the homeowner has to get to agree to any change or modification to his loan.
The investor is the owner of the loan, not the bank, nor the servicer of the loan, nor any government agency, nor all the scammers in between. I recommend reading California Attorney General Brown’s lawsuits against all sorts of scammers preying on folks facing foreclosure to be aware of these scams.
At the end of the day, the legitimate owner of the loan has the right to contest in court any change in the original loan agreement that he hasn’t approved.
Then, if you’re facing a loan modification, avoid intermediaries —they can’t promise you anything, except taking your $1,800 hard earned money. And the spectrum of lies starts with loan modification companies, greedy attorneys that know better, to loan servicers and banks that may not have any saying, because they sold the loan long ago, and are there to collect your payments for a fee.
Brown recommends contacting housing counselors approved by the U.S. Department of Housing and Urban Development (HUD), who may be able to help you for free. For a referral to a housing counselor near you, contact HUD at 1-800-569-4287 (TTY: 1-800-877-8339) or HUD website.
My advice: get a good attorney (found this list in livinglies: lawyers that get it) that understands these issues, or get a Fannie or Freddie counselor —they’re on your side—, Freddie and Fannie have much to lose with your foreclosure.