Options For Homeowners Facing Foreclosure
Surely by now everyone has heard of the latest government programs addressing the sub-prime mortgage crisis; they may even realize that there are loan modification companies out there to aid in restructuring the terms of their mortgage. What most consumers do not know is exactly how the process works and what to expect during the process.
One thing that homeowners need to realize is that expecting their mortgage servicer to be on their side and patiently walk them through each step to freedom from foreclosure is a naïve, and even dangerous, supposition.
The Mortgage Crisis Spin
The U.S. government has put quite a spin on their efforts to resolve the current crisis regarding sub-prime mortgages. Television networks and news reports have jumped on the bandwagon, urging consumers to call their mortgage company and keep their home. They are all proponents of do-it-yourself loan restructuring, advertising the process as quick, easy and fail-safe.
What they are not being completely honest about is that a mortgage loan is a legal document. As such, the homeowners who signed it are legally bound and obligated to pay it back under the terms it was written. Attempting to restructure the loan without professional advice and the correct legal information can actually result in creating a worse situation for the struggling homeowner – and oftentimes the loss of the property anyway.
Do Your Homework and Get Help
The good news is that there is a lot of help for homeowners available and loan modification companies to help them. The first step in the process of negotiating new terms for a mortgage begins with research and preparation. Do your homework.
If you are currently delinquent in your loan payments, start by determining if this has resulted in extra and undue fees being added to the amount due. Usually these fees, which can range in the tens of thousands of dollars, will be added without your knowledge. You must know exactly what you are dealing with in order to turn around the situation.
The next thing you must research is the exact wording of your mortgage document and the black-and-white terms. There are some mortgage servicers who will attempt to stretch the definition of terms and take advantage of homeowners who do not understand the legal jargon. As well, the loan itself is probably not held by the financial institution you originally dealt with; it has probably been sold time and time again – an important consideration.
Threats to Do It Yourself Modifications
If you are considering going through the process of the mortgage modification process without benefit of legal counsel, be aware of some of the drawbacks.
Number one is that many times the mortgage servicer will add a release of liability clause to the new terms. This means that the homeowner is signing away the right to ever take legal action against the loan company, no matter the circumstances.
Unfortunately, the mortgage company truly does not care about the plight of the homeowner. They are looking out for themselves. The fact is, many of the consumers who go through a restructure of their loan end up in foreclosure within six months after the new mortgage has gone into effect.
Using loan modification companies as your advocate to prevent foreclosure is highly recommended. These firms have the knowledge and resources to investigate what company truly holds the mortgage and how to best deal with them and respond appropriately to the legal ramifications. If you are facing foreclosure, this is no time to try to do it yourself and risk losing even more.
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