Government Challenges – the first report from the Obama Administration stated that their ability to get loan modifications was hampered. The Treasury Department said that just 9% of eligible loans had been changed. In fact, loan modifications at two mega-banks were even lower, just 6% at Wells Fargo and 4% at Bank of America. These numbers are strictly for the federal program, and not for loan modifications in general. Other lending institutions, such as GMAC and JPMorgan Chase reported much better federal loan modification percentages, some of them reaching into the 20% range.
Financial Challenges – Banks which have many leases going into foreclosure often have a difficult time figuring out how to manage all of the failed mortgages with all of the ones that can be salvaged. With the federal program, so much bureaucracy exists on both sides, trying to get proper financial information from each other can be difficult.
Circumstantial Challenges – The federal program puts a great deal of pressure on the banks. However, regardless of the pressure, banks still have to hire people to field the phone calls, e-mails and other communications. This takes time.
A loan modification attorney can help the average person avoid the kinds of challenges people are facing. These challenges include trying to get a bureaucrat to get something done, or being one of a million people calling the same phone number. A loan modification attorney can be your ears, your eyes and possible even your mouth, and they can make the loan modification process far less painful and far more successful.
Loan modifications can help you lower your monthly mortgage payment, thus allowing you to stay in your home for the long term. A loan modification is a negotiation between the lender and the borrower to change the terms of the loan, with the end result being a lower monthly payment. This can help the homeowner avoid foreclosure. Loan modifications can lower your mortgage’s interest rate, increase the amount of time covered by the mortgage (from 30 years to 40 years), eliminate the late fees and penalties, offer you a principal reduction and much more.
With a skilled California loan modification attorney, you can avoid the headaches and time lag that people are facing with the federal loan modification program. If an attorney contacts a bank, the bank is far more likely to respond quickly. An experienced loan modification attorney might even be able to avoid the long wait time by knowing who to call and when to call them.
The Los Angeles Times reported that banks are moving extremely slow in modifying people’s home loans. There are many reasons why the banks are moving so slow, and while many people might believe that banks are simply being greedy, the truth is more complex.
Banks understand that loan modifications are actually good for their bottom lines, especially in comparison to the damage a foreclosure can do. However, various financial, governmental and circumstantial challenges have interfered with banks’ ability to perform loan modifications.