Reuters: Loan Modification Hassles Slowing Housing Recovery
Anyone who has attempted to get a mortgage loan modification probably has a story to tell. Most of those stories will involve the maze of paperwork and red tape required to obtain a loan modification. Lost paperwork, incorrect data, and general incompetence will be the main themes.
Reuters has a new report highlighting the continued problems that homeowners face when attempting to obtain a loan modification. One story includes one arm of Bank of America assisting a homeowner with appealing a denied modification, while two other arms were sending her letters with two different reasons for denying the modification. Her four-year attempt at securing a modification reamains in progress.
The other stories are more of the same -- lost documents, inconsistent reasons for denial, and "the investor said no." Given all of this, why even try to get a loan modification? For some people, the reason is simple -- "I love my home." The value that you attribute to your home is often greater than what the market would actually bear for your home. However, sentimental attachment seems to be one of the biggest factors for people seeking loan modifications.
If your home is significantly underwater, keeping it is most likely a bad investment. Lenders are not handing out principal reductions for the most part, so most loan modifications don't address this problem. Although you can retain a Chicago foreclosure defense attorney to assist you with loss mitigation and loan modification, sometimes letting a home go is a better choice than enduring the grind of obtaining a loan modification.
It is possible to exit your home with dignity and without any further liability. It is also possible to fight your foreclosure as long as you can and hope for a loan modification. The choice is ultimately yours. No matter what you choose, make an informed decision. This may mean hearing some things that you don't want to hear, maybe even finding out that your best choice is a consent foreclosure or surrendering the home in bankruptcy.
You'd think that three years into the foreclosure crisis, lenders would have figured out how to make the loan modification process easier. All they have done is add more uncertainty to an already uncertain situation.