Judge Ruling May Expedite Loan Modification Process
Suffolk Judge Jeffrey Spinner blasted lender’s “harsh, repugnant, shocking and repulsive” acts. Even though the lender has taken $814.2 million federal bailout, it has a record of cold bloodedly foreclosing on any homeowner owing any money. The judge’s decision erases up to $291,000 in principal and $235,000 in interest and penalties.
The owners were paying only interest on their mortgage and had no equity in their home. The loan, refinanced in 2004, carried an initial adjustable interest rate of 10.375 per cent, which soared to 12.375 percent. The owners have been begging lenders to restructure their loan. According to the owners, dealing with the bank was like dealing with organized crime.
The Judge blasted the lender for repeatedly refusing to work out a deal, for misleading him about the dollar amounts at stake in the case and for its treatment of the couple over months of hearings. He canceled the debt because the bank must be appropriately sanctioned so as to deter it from imposing further mortifying abuse against the owners.
The significance of the ruling is that borrowers may have been empowered by knowing that judicial system may come to their rescue if their attempts to modify their loans are not entertained by the lenders. The ruling will not automatically require the lenders to take any action to pursue loan modifications with borrowers. However, lenders have been put on alert by judicial system to work out reasonable agreement with borrowers seeking relief.
The most common mistake that people make is to understate their income, assets, and ability to pay a loan modification. If the lender determines that you are unable to pay even a modified loan, they will not want to reach modified agreement and will just foreclose on you now rather than later. The best strategy is to come up with loan modification that you will be able to pay and is reasonable.
The most important points about the loan modification process are:
- Pursue loan modification process with lender immediately
- Establish a point of contact with your lender
- Propose reasonable terms that you can honor in the future
- Do not hire “third party” to negotiate if they take any money up front
RESOURCES
o It Yourself Kit
Posted by Prakash Kunjeer at 2/8/2010 10:54 AM 
Categories: Mortgage
Tags: mortgage loan modification loan modification lender homeowners mortgage
Categories: Mortgage
Tags: mortgage loan modification loan modification lender homeowners mortgage
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