Why Mortgage Companies Fail at Approving Loan Modifications For Foreclosure Victims

Why Mortgage Companies Fail at Approving Loan Modifications For Foreclosure Victims
By [http://ezinearticles.com/?expert=Nick_Adama]Nick Adama

Homeowners who fall behind in their mortgage but recover from a hardship and are able to get back on track often attempt to work with their lender to qualify for a plan to make up the missed payments. But often, they are disappointed in how poorly the mortgage company responds to their requests for help, even when the borrowers have cash on hand to pay down the arrears.

But the bank never returns phone calls, no matter how many voice messages are left, yet collections calls may continue unabated. It would almost seem illegal for lenders to act this incompetent, but they do it every day and pass up legitimate chances to allow financially stable borrowers to get back on track and stop foreclosure before the house is auctioned off or an eviction date is set.

But of course, failing to work with homeowners who are behind on their mortgage is not illegal. A family was paying, then it stopped paying. The mortgage contract says that if the borrowers stop paying the loan on time every month, the bank can take the house into foreclosure and attempt to have it sold at a public auction to satisfy the debt. There is nothing illegal about enforcing a contract that both parties entered into voluntarily and with all the terms in writing.

So foreclosure and refusing to work with a homeowner is not illegal, per se. Regardless, though, it is almost always a bad idea on the part of the bank not to try and work with the borrowers, especially if they can get caught up again in a reasonable period of time. Banks lose money on foreclosures, and if a homeowner has actually recovered from a financial hardship, then there is no reason why the lender should not at least make an attempt to resolve the situation.

But with so many foreclosures going on right now, if the loan is with a big bank or servicing company, self-represented borrowers are often pushed onto the back burner while those represented by foreclosure help companies, government agencies, or attorneys can get through to the lenders more easily. In fact, it might be worth asking for some help from a reputable assistance provider in this situation and requesting a mortgage modification or other workout plan through the help of a professional.

Unless a borrower is able to sit on hold for multiple hours throughout the workday in order to make sure the bank gets faxes and for status updates, the mortgage modification may find itself on the bottom of the pile, while others are worked on more that are receiving calls every day from the interested parties. It can take days just for a lender to acknowledge that it has received a fax giving a third party authorization to speak with the lender about the loan, and even longer for it to acknowledge receiving a completed loan workout package and reviewing it.

Unfortunately for homeowners, banks are completely incompetent at helping people solve foreclosure in a timely manner unless they are forced to do by legal threats or given a deal that it would be certifiably insane to turn down. Servicing companies and financial firms that have securitized mortgages into bonds can actually make more money by letting a house go into foreclosure, so they have no incentive to make a loan work and decrease their own profits.

The ForeclosureFish website has been created to provide homeowners in danger of losing their houses with important foreclosure information and resources. The site describes various methods that may be used to save a home, such as stopping a sheriff sale, defending a foreclosure in court, refinancing, selling, and more. Visit the site if you are planning on stopping foreclosure on your home before the bank takes the property to a county auction, as well as how you can recover your credit record after: http://www.foreclosurefish.com/Article Source: http://EzineArticles.com/?expert=Nick_Adama http://EzineArticles.com/?Why-Mortgage-Companies-Fail-at-Approving-Loan-Modifications-For-Foreclosure-Victims&id=1769351