I am running into alot of situations, and I would like to address in a small way. The first is for those people who are behind on payments and currently in the loan modification process. Please understand that just because you are in the loan modification process, your obligation to pay your payments DOES NOT STOP. Most people think that because they are working with the bank (and hopefully the bank is working with them.....hahahaha) foreclosure proceeding are on hold. NOT TRUE! Once the foreclosure time line starts the banks DO NOT normally halt that process. So what is the big deal? Once my loan modification is approved its all good right? Well WHAT IF YOUR LOAN MODIFICATION IS NOT APPROVED? The bank is that closer to foreclosing on you thats what. You need a plan "B" if you are in that situation. You need to look at options, such as short sale etc.....This also applies if you are in a TRIAL PERIOD on a modification. The trial period (in most cases) has no bearing on whether your loan modification will be accepted or not. At the end of the trial period if you were already in the foreclosure process IT DOES NOT START OVER, it picks up from wherever it was prior to the trial period. The consumer who is current on their payments and do a loan modification you are not exempt from possible issues. The biggest I am seeing currently is the homeowner that is in good standing with the mortgage payment and is in a trial period for the loan modification. At the end of the trial period they are told they are not qualified for the modification. The problem I have experienced is the bank kicks the payment back to PRE TRIAL period AND wants the homeowner to pay the difference between THE TRIAL PAYMENT AND THE ORIGINAL MORTGAGE PAYMENT FROM THE PREVIOUS OBLIGATION! What do I mean in English? If your payment was normally $2,000 a month and you are on a trial modification for 3 months at $1,000 a month. Needless to say that is a $1,000 savings per month or $3,000 over 3 months. Well I have experienced the bank to DENY the modification AND THEN ASK THE HOMEOWNER TO PAY BACK THAT $3,000 SAVINGS AND PUT LATE PAYMENTS ON THEIR CREDIT SCORES WHICH OF COURSE HURTS THE FICO SCORES! Remember this on someone who was making the payments on time and doing everything asked of them to qualify for a modification! Is it right? HELL NO in my opinion, BUT it is happening and you need to be aware!
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