Most distressed homeowners have had course to complain over the way their mortgage lenders have treated them in the wake of the housing sector downfall. A lot of these people are in a situation where they cannot make mortgage payment.
Therefore, they have sought to get their mortgage lenders modify the terms of their loans so that their home loans will become affordable thereby easing the strain on their finances.
In spite of the fact that these homeowners qualify for mortgage loan modification under the Government run Making Home Affordable program, they have not been able to access this form of assistance from their mortgage lenders.
This, not withstanding, the constant promises these distressed homeowners have received from their mortgage lenders. However, it has been very difficult for these homeowners to take action against mortgage lenders who behave this way.
It seems the only groups of people who can have a genuine case against mortgage lenders are those homeowners who are wrongfully denied mortgage modification assistance, especially when the mortgage lender and the distressed borrower have not signed a mortgage modification agreement.
The mortgage modification agreement is the legal document that makes it binding for the mortgage lender to go ahead and implement the terms of understanding contained in the agreement. Should the lender decide to pull out of the deal after the agreement has been signed, the delinquent homeowner has every right to take such a mortgage lender on by initiating a legal case against the lender.
On the other hand, if the homeowner does not qualify for the government administered modification program but has only received promises from the mortgage lender who is offering to use its own in-house foreclosure prevention program to assist the borrower, then that borrower might not have a strong case against the lender should it (lender) decide that it is no longer going to offer the delinquent homeowner assistance.
Unfortunately, this has been the case with many distressed homeowners in the country; they relied on promises made by lenders to modify their loans. In fact, some of them were even put on trial modification programs with the intention of migrating them onto a permanent loan modification scheme only to be withdrawn totally from the program. This caused a great deal of financial difficulty for these homeowners who ended up facing foreclosure.
With a loan modification agreement in place, both lender and borrower have an obligation to ensure that the new terms are followed accordingly. If the borrower fails to pay the agreed upon modified monthly mortgage, the lender may cancel the modification program on the basis of that and initiate foreclosure against the delinquent homeowner.
By offering delinquent homeowners mortgage modification, mortgage lenders are effectively helping these homeowners to resist falling into foreclosure. When a mortgage lender decides to offer a distressed homeowner mortgage modification, the borrower could benefit from reduced mortgage interest rate which could be a fixed rate or an adjustable rate. The borrower could also take advantage of reduced monthly payments which is as a result of the mortgage lender recalculating what the homeowner owes on the mortgage over a longer period of time.
Essentially, the agreement form will have a section that details out what can be done by both lenders and borrowers. As a borrower, it’s good to know these things to ensure that no mortgage lender takes you for granted.