Have you actually met anyone who has had their home mortgage modified to reflect actual market value?

While the media continues to promise HELP for struggling homeowners, the fact remains that banks are not modifying loans to current market value. There are literally tens of thousands of web sites which explain how the "Government" is going to help you obtain a loan modification, however, the fact remains that while our leaders in Washington have created a multitude of programs designed to help you, banks are NOT obligated to modify your mortgage. All of the Government loan modification programs are 100% voluntary, meaning the banks are not obligated to use them.

Many people wonder why the banks are not motivated to modify loans. The answer is quite simple. When a loan is modified, it is considered a "non-performing asset." Banks do not like to have non-performing assets on their portfolio, due to the negative impact on the stock value. When a bank forecloses on a home or approves a short sale, they are able to write off the loss, and obtain a substantial tax credit. Once the home has been charged off, it is no longer considered to be a non-performing asset, and the value of the bank's stock improves. Basically, the banks are reimbursing themselves with taxpayer TARP funds for the losses associated with foreclosure and short sale properties. Why would any bank be motivated to modify your loan, if they are able to simply foreclose and get reimbursed by the Federal Government for their loss? In summary, the bank makes more money by foreclosing on your home than by modifying your mortgage. This is why banks prefer short sales over the less desirable (and more expensive) option of foreclosure. A short sale is less expensive for the bank (versus a foreclosure) and still allows the bank to charge off the loss (and reimburse themselves with your TARP tax dollars!)

Banks may agree to temporarily modify your monthly payment and interest rate: however, banks will NOT reduce your overall loan payoff. When a bank agrees to reduce your monthly mortgage payment, it is typically modified for a 2-5 year term. The difference between your "new payment" and your "old payment" is added to the total payoff of your loan...plus interest. Why trade in one bad loan for another? Even if your payment is modified for 2-5 years, the fact remains that you will continue to pay for a home that is depreciating, and worth half of what you paid. Additionally, at the end of the 2-5 year term, you will end up owing the bank MORE than when you started. Loan modification doesn't solve the problem. It simply postpones the foreclosure process. 

Who Can You Trust?

The news media reports daily of loan modification fraud, and loan modification scam artists, who target desperate homeowners with false promises.

The fact remains that you should NEVER pay anyone, unless they are an attorney, to do a loan modification. Attorney fees will be substantial. Unless an attorney guarantees you IN WRITING that they will be able to modify your loan to current market value (make sure that they guarantee you a full refund of your money if they are unable to perform,) then you are wasting your money.

Should you deal directly with the bank? The bank is a DEBT COLLECTOR. They DO NOT represent you in any capacity. The bank has deficiency rights, which means that they have the ability to sue you should the home foreclose. Any conversations which you have with the bank over the phone are being recorded to use against you. Any paperwork which you provide to the bank, may also be used against you. If you try to negotiate directly with the bank, you place yourself in a situation which may cause you substantial harm.

In Summary:

FACT: LESS THAN 10% of loan modifications are approved and less than 25% of those every stay permanent.

FACT: BANKS ARE DEBT COLLECTORS. THEY DO NOT REPRESENT YOU IN ANY CAPACITY.

FACT: Any phone conversations you have with the bank are recorded. Anything you say may be used against you.  

FACT: Any information which you hand over to the bank in order to qualify for a "loan modification," will be reviewed to determine if it is worth the banks time and money to come after you for a deficiency judgment lawsuit.

FACT: A loan modification typically results in the borrower owing more money on the home than before they applied for a "modification." Loan modification will cause your monthly mortgage payment to GO UP. Banks may lower your monthly payment for 2-5 years, however, at the end of the term, your monthly mortgage payment will actually be HIGHER than before the modification. If you read the fine print of a loan modification, your monthly payment is typically reduced for 2-5 years, (which seems good,) however, the difference between your new and old payment is added to the loan payoff, with interest. As a result, you end up with a higher payment, and owing even more money on your home. Loan modifications typically are not modified to reflect current market value.  

FACT: Applying for a loan modification may cause your short sale to be denied or may result in a promissory note.

FACT: The reason that most Arizona loan modification requests are denied, is due to the fact that the value of the home must be 75% of the existing loan amount. The Arizona market has depreciated more than 64% based on recent news reports, which means that most Arizona residents do not qualify.

Don't be fooled by banks. It is critical that you have representation, so that you are NOT taken advantage of. If you are trying to decide whether a loan modification or a short sale is the best option for your family, please contact The Outback Group for a free consultation. If you would like to schedule an appointment with The Outback Group, simply email us at info@Short-Sale-Arizona.com

CALL NOW

Call The Outback Group today for a free consultation.  A short sale is NOT the end.  It is a fresh start.  Don't let the bank take away your dignity.  The bank is a debt collector and does not represent you or your family in any capacity.  Let our team of experienced professionals get between you and the bank.  The Outback Group will help you get a fresh start.

(480) 766-8873