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.
Every day I meet with individuals involved in foreclosure at various stages of the process. One of the most common stories people share with me is that they have spent all of their energy working with their lender and have seen no results from their efforts, other than their frustration. They have sent documents that were requested of them, made voluminous disclosures and resubmitted paperwork countless times, only to be given one of a litany of excuses why they were not approved for a loan modification. Rather than me tell my stories, I’ll share one from the Kansas City Star.
What is described in this article should not be happening. When people go into “default” on the direction of their lender, the lenders should be estopped from proceeding in litigation. These cases are heard in courts of equity and there is nothing equitable of a lender playing pied-piper and luring people into default.
Read the entire article here.