Posts Tagged foreclosure prevention
Often people who fall behind on mortgage payments have suffered a temporary financial set-back and are able to resume making payments. However, many people are unable to reinstate their loan, which requires all the late payments, penalties, attorney’s fees, and court costs be paid to bring the loan current. Loan modification is when a lender re-works a deal and the borrower begins making payments once again. I was not at all surprised when I read the following article, describing how the so-called Obama Plan has failed to deliver, at BusinessWeek.com.
Loan modification can be an effective way for a borrower who has or is currently going through a temporary loss of income to get back on track and have an opportunity to continue making mortgage payments. Like everything in life, there is no magic bullet that works in every situation. But is seems to make sense to keep more homes in the hands of people who care about them, care for them, and have a desire to continue making payments. Please see the Wall Street Journal article on efforts of Fannie Mae to encourage lenders to work something out with homeowners sooner rather than later. Often the case is that a lawsuit is filed and many thousands of dollars in legal fees are incurred by the home-owner before any meaningful discussion takes place with the lender or loan servicer about any kind of work-out plan or modification. As a result of this practice, the amount of late payments also builds-up and in most cases puts the possibility of reinstatement out of reach for most people, even those who do become re-employed or whose financial situation rebounds.