By Denise Giacobba*
As I sit down to write this article, I was thinking back to when I first started hearing about modifying mortgage loans. I was not sure exactly what modifying meant, but I was eager to find out. I began by calling my own mortgage lender as there was little information on the Internet about modifications. My mortgage lender explained that it had established certain programs that offered a repayment plan to catch up on any missed mortgage payments. I replied, "well isn't that a forbearance and not really modifying the terms of my mortgage?" Well, that was what was being offered. The response I got was typical of the responses most mortgage lenders were giving to their borrowers at the time (early 2009). The reason the lenders did not offer to lower interest rates and payments was because they would not earn as much profit if they lowered the rates. However, as the mortgage crisis got worse, the mortgage lenders and their servicers were being swamped with thousands of applications for loan modifications. They quickly hired staff, but failed to train them properly; consequently borrowers were getting the run-around rather than getting any actual help.
I decided that to really help homeowners through the modification process, I needed to learn all about the process, the various federal and state laws governing modifications, the various programs and procedures. I attended several workshops offered by several groups, learned the bank's software systems and applications and have become a master in the "art" of a loan modification. The procedures are so complex that I do not know how regular homeowners can get this done on their own, although I know it happens (actually it's only 2% of American homeowners that get a modification on their own). Most American homeowners have found it to be a never-ending process of sending documents, dealing with many different representatives, and all to no avail. They all end up getting denied based on missing documents or a statement from the lender that they simply did not qualify, they make too much money, they do not make enough money, etc. I understand the horror of homeowners who have fallen behind on their mortgage payments, who tried to get their loan modified, only to receive a denial letter. It can cause the most unbearable of stress of not knowing where they or their family will be sleeping in days to come.
The way the lenders have set up the process for qualifying for a loan modification is so detailed and complex, that it is almost impossible for a homeowner to receive an approval of a modification. Even if a homeowner qualifies under the lender or the government's (FHA, Freddie Mac or Fannie Mae) guidelines, the servicer may still deny the loan modification as there are currently no laws in place from the Federal or State Government that mandates that a bank MUST modify loans if the borrowers meet the guidelines. There is nothing an individual can do to force the servicer/investor/lender to modify a loan. When we at Laura Margulies and Associates, LLC analyze a modification package, our goal is to get the lender to realize it is in its best financial interest to modify the loan. We know that the bank will only modify if it makes financial sense for itself as it really does not care about the individual homeowner. While there are no guaranties, we use our best efforts on behalf of our clients and work tirelessly to obtain the best modification possible, be it a HAMP modification, a Freddie or Fannie modification, an in-house, Business as Usual, Core or another modification program.
If you are homeowner interested in finding out if you qualify for one of these programs, you can call our office and we will give you a preliminary analysis. Our goal is to get clients into a mortgage loan they can afford, so that they can retain their property for the long term.
* Denise Giacobba is a legal assistant at Laura Margulies & Associates, LLC and deals exclusively with loan modifications. She can be reached directly at 443-274-6063 or by email at Denise@law-margulies.com
