Why is a loan modification so hard to get?

With all the government bail out cash provided to banks for exactly this purpose, why can’t homeowners easily achieve a change in terms from their lender?

1/ Banks are Overwhelmed.

Hundreds of homeowners have applied for modification on their loan terms. Banks simply do not have the staff to cope with the volume of applications. Systems are not in place to deal with the workload. Added staff are untrained and lack some basic understanding of the real estate industry. Often bewildered homeowners are switched between departments, given conflicting instructions by different bank contacts and are left feeling angry and frustrated for good reason.

2/Web sources reveal that of those loans already modified over the last 24 months, roughly 75% are already in default!

This is cause for concern for the banking industry and may be a big reason for their reluctance to provide modifications.

3/Banks really dont want to provide modifications!

Although they are required to address every applicant, it may be that most banks will prefer to foreclose and recover the property

because it may be a better financial decision for them when it comes to showing debt and assets on a year end balance sheet. This may be why they do not want to modify terms.

What about those successful modifications?  There are some of course however the majority of these only ‘adjust’ the terms of the loans for example the term of the loan my be extended from 30 to 40 years, no reduction of the loan balance is usually provided.

BEWARE scam artists that will ask for money upfront to deal with your lender. Money upfront = SCAM, dont do it!

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3. Wachovia Short Sales, do you have a Wachovia or Wells Fargo mortgage?
4. Commissions…Selling without an MLS!

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