Beware of the trial loan modification | Maine Loan Modifications

Most homeowners are offered only trial modifications if they meet the strict requirements in qualifying for a loan modification. However, don’t jump for joy before reading the fine print, as most loan modifications extended are not permanent. Here are three reasons to NOT CONSIDER a trial modification:

1. The loan modification requires 3 on time payments known as “trial payments” in order to qualify for a long lasting modification. The bad part is this does nothing to stop the foreclosure process, nothing to repair credit, and provides no certainty EVEN IF the payments are made on time.

2. NONE of these trial payments are applied to the outstanding loan balance! They are merely put aside in a “suspense account” while the lender waits for you to drop out or denies your application. Essentially you are throwing money into the abyss, while hoping to get lucky.

3. You have no direction, no sense of certainty and no satisfactory resolution to your mortgage default. The foreclosure clock is still ticking, the sheriff will still inevitably come serve you a foreclosure lawsuit.

While a loan modification is the goal of most homeowners fighting to remain in their home, sometimes a Loan modification offered by a nefarious lender is the greater of two evils. The devil is in the details, after all. Read the fine print.

Maine real estate, foreclosure and short sale news

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Quick video of HAFA program, when Loan Mod fails

The HAFA short sale will automatically apply you for a Loan Modification…

Loan Modifications are a result of a Short Sale Application quite often

*Disclaimer: this is not legal advice, I am a Realtor, specializing in Short Sales and helping borrowers get out from under their debt at the best possible terms.

www.MartymyRealtor.com

I listed a Short Sale a few weeks ago, and it was heavy on my heart. Quite frankly, the property was not typical of a distressed property, it was cute little Ranch on a sprawling 5 acres, gorgeous Maine countryside.

The sellers had been battling for a Loan Modification for several months with BOA, needless to say they were given the proverbial runaround and were left just hanging in the void. They contacted me because they wanted to do the right thing and not walk away, but get some solace and possibly a $3000 relocation assistance fee in the process. They gave up all hope of a loan modification and just wanted to close this chapter on their life and move on.

I listed the property and received 5 offers in the first week, 2 full price offers. A great short sale!

On the day I was to present all the offers, the sellers called me in shock and excitement….a FedEx envelope arrived on their doorstep that morning and in it was the Golden Ticket. It was a permanent loan modification agreement at a payment that was affordable to them.

Obviously, they wanted the house off the market, which I gladly obliged, and they were grateful for the services but dumbfounded that it happened this way.

It may have been fate or coincidence, however another more rationale explanation may exist. The new HAFA program sponsored by the government, required a lender to first look at Loan Modification possibility before approving a short sale. Perhaps it was the initiation of the Short Sale through BOA’s equator that reopened the book on my client’s Loan Modification application?

When in doubt, don’t walk away. If your hopes of a loan modification are waning, go the short sale route…as it will buy you time and potentially get your loan mod application in the right persons hand.

Be wary of BOA Deed in Lieu Offers!!! They just may be a trap.

It appears BOA is using the language “Foreclosure prevention” as a means to offer cash for keys in the manner of Deed in Lieu.

Be wary of BOA deed in lieu offers that DO NOT waive the deficiency judgment.

Be wary of accepting these BOA deed in lieu’s when you have an open 2nd mortgage also in default….this DIL will not cover the second.

For those who are forced into a position(judgment issued against you) of having to leave the fight…. I would consider a Short Sale.

A short sale is much better than a Deed in Lieu, as it changes the course of a borrower’s future credit score. Also, 2nd mortgages are also negotiated in the process, not leaving an outstanding balance.

I am happy to discuss the ever evolving short sale process and of course the foreclosure fighting strategies that exist.

Basically, you must make it VERY hard to foreclose, offer evidence, fabricate assignments and endorsements….this will buy you time. At the end of the day, either a Loan Mod or a Short Sale can be achieved and this is a better alternative than Foreclosure. Of course, complete debt extingishment and/or Damages for fraud are a best case scenario….however, it seems only those who don’t ask for such a measure get it.

A Copy is a COPY!!! This is not evidence!!!!!

Most states have Rules of Evidence that call for BEST EVIDENCE.

Quite simply, a photocopy of a document may not be admitted into evidence IF CHALLENGED by an opposing side, in a Motion in Limine to exclude certain evidence.

For example, a photocopy of a note endorsement, not Sworn to nor accompanied by a Notary, may be challenged according to Rules 901(a) which requires Authentication and 1002 which required the Original document.

Of course, if the Court grants Summary Judgment, then this point is moot. However, if you survive, this is another defense mechanism to utilize. Follow the rules, there is no magic bullett, but the Court cannot ignore the rules.