This also puts a lot of people, right in the middle of the bull’s eye of people who say they can help with modification and want to charge you a big upfront fee for doing so, and when you give them your money, you are told one thing and then you find yourself waiting and waiting and waiting. 30 days turn into 60 days.
Then it is for 5 or 6 months and what is happening. Then you start calling other people or companies to help after you can’t get a hold of the people who took your money and said they were going to help.
Or, you call the bank directly and try to deal with them. Some people are very fortunate and can get someone to talk to that speaks English, and can help. Part of the problem with dealing with the bank for real estate loans directly is, besides the fact that they are simply imploded, is that they are going to ask you about your financials, and you will give those answers to questions over the phone.
Here is half of the problem. A great number of people will answer everything the bank asks, and then get a typical response from the bank that you do not qualify for a loan modification.
Here is part of a bigger problem; they may qualify for a modification. The bank is not your uncle; they are not going to be sympathetic or empathetic. They have minimally paid people, taking information that will have a direct effect on your ability to save your house or get a payment adjustment that you will be able to live with.
This is from an article in the Washington Post, written by Renee Merle, December 17th, about Bank of America, and its inability to get loan modifications done promptly.
“The bank has come under criticism for lagging behind competitors in signing up borrowers to the program, known as Making Home Affordable. By November, Bank of America had registered only 15 percent, or about 160,000 customers, of the more than 1 million delinquent borrowers who are potentially eligible, according to Treasury Department data. That is a far smaller percentage than competitors such as J.P. Morgan Chase and Citigroup.
Only about 340,000 of the 1 million delinquent borrowers identified by Treasury are likely to survive the qualification process, Jack Schacht, Bank of America’s credit loss mitigation strategies executive, said on a conference call with reporters. Many of the remaining distressed borrowers have abandoned their home or rented it to tenants, making them ineligible, he said. Others are unemployed and can’t afford even lowered payments, he said.”
Doing simple math, does that mean that only one-third of homeowners will qualify? Does that mean the odds are against homeowners that much? What about self-employed, unemployed, second homes, etc.
It is not just Bank of America, all of the banks want to have a cookie-cutter approach to qualifying a home-owner for a loan modification, and unfortunately, that is not the way to make things work for people. To make things even worse, people who are charging people also want to have a cookie-cutter approach when working with the bank.
What is the solution?
How can people get the help that is needed and how do you know who can help. Taking a financial analysis approach is key. Putting all the cards on the table, and then sorting out the hand that you want to show the bank, is basically what needs to be done. There is more than one program available to homeowners.
The truth is that each case is different, and circumstances need to be evaluated, analyzed, and hard questions need to be asked. As I mentioned the bank is not your uncle, they are not your friend or a trusted confidant. They are a business, they have shareholders and to you, Mr. or Ms. Homeowner, you are nothing more than a loan number and either fall under the category of Performing Asset or Non-Performing Asset.
This means that if you are making your payments on time as agreed, you are a Performing Asset. If you have fallen on difficult times and have gotten behind in payments by a full 30 days, (not just 15 days and now are paying the bank’s junk fees, known as late payments), now you are a Non-Performing asset. This triggers off a series of reports and now you have fallen in a different category. The bank now sees that they may have a situation, and believe it, they have many situations.
Try calling the bank and asking for assistance on a loan modification and not being at least 30 days late, they will make you feel foolish, and worse will in some cases, tell you to call them back when you are 90 days late. Does this sound like who you want to help you? Sure they cost is free when dealing with the bank you, or is it? The truth is it can cost you a lot more, like your house.
So what is that worth to you? What does it cost to have someone help get a homeowner qualified or at least look and run the numbers and analyze the situation to see what potential program may work for you?
It is a complete package that needs to be looked at, not just your interest rate. Some people’s unsecured debt, (credit card debt) needs to be addressed to show the bank intent on the homeowner’s part to take control of the situation and be financially prudent.