Bankruptcy

Mortgage Modification Update: Not so Hopeful

By Bill McLeod, Esq.

Are you hoping that your mortgage company will "work with you" and modify your loan? Good luck.

On August 12, there was a Free Foreclosure Prevention Workshop at Gillette Stadium. I have heard a number of different perspectives from people who attended. The one thing I am consistently hearing: mortgages are not getting modified, at least in not any meaningful way to enable people to keep their home.

I then read this interesting news release from Massachusetts Attorney General Martha Coakley outlining her recent testimony to the US House Financial Services Committee confirming what I am already hearing:

The Attorney General?s written testimony outlines the office?s findings with regard to the implementation of loan modifications in Massachusetts. Specifically, the testimony notes that:

-Loan modifications are not being achieved in significant numbers. When compared to the number of foreclosures in process, far too few borrowers are able to restructure their loans to generate a sustainable loan; and

-When so-called loan modifications do occur, they often do not result in a sustainable loan. Lenders and servicers routinely offer and complete so-called loan modifications that increase monthly payments and increase overall debt. They do not meaningfully avoid foreclosure. At best, they temporarily delay the inevitable delinquency and eventual foreclosure.

You can read the entire release, and get access to Attorney General's testimony here.

Full post as published by McLeod Law Offices on September 18, 2008 (boomark / email).