Bankruptcy

Lessons in Loan Modifications

By Bill McLeod, Esq.

Suze Orman is growing on me. Sort of. She often has sage advice for consumers, and lately she has been making regular appearances on CNN?s Larry King Live. I cannot say I completely agree with everything she says, but lately, she has been telling it like it is and when it comes to financial news and advice, it's refreshing to see some honestly on TV. I have her suggest to consumers that if they are having problems with their mortgage, they should contact their lender (i.e., the workout or the loss mitigation department). A client recently told me he did just that, after hearing Orman suggest it sometime last year. He was falling behind on his mortgage, and decided to walk into his local bank to talk to them. It did not go quite the way he planned.

At the time, the client was not residing in Massachusetts, and his lender was a local bank. He sat down with the manager and explained his situation. Instead of extending an accommodation, or working with the client to help him keep his home, the manager basically said this: ?sorry, but we have a lot of loans going delinquent and we need to cut our losses, so we?re going to start the foreclosure process now.? And so they did. The bank pretty much put the house into an accelerated foreclosure process.

Yikes.

That?s lesson number one: don?t go telling your lender that you?re having problems paying your mortgage unless you have some reasonable expectation as to what the response will be.

Full post as published by McLeod Law Offices on July 17, 2008 (boomark / email).