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The Myth of the Loan Modification

The Myth of the Loan Modification - Article by Missouri Foreclosure Attorney Dale Wiley

Congress promised you a modification. The banks have not delivered.

Of all of the lies circulating around foreclosures, none irks me more than the lies around loan modification. Companies all around the nation (and many seemingly in Florida) are charging well-meaning homeowners thousands of dollars to send shoddy materials, confuse the issue and to make promises they have no way of delivering on. You won’t see us promising a modification.

At this point, that’s akin to promising someone that you can teach them how to win the lottery.

To the extent that our clients have even been offered modification, they have tended to be on very onerous terms. One client was given an offer of modification: Add $22,000 back on to the loan as principal, and then add another ten years to the loan, making it forty years in duration. By my calculation, that means they just added over $120,000 to the bill. The “help” the companies give is ... unhelpful. One woman recently brought me her “modification help” packet. The company told her to write a letter that was very similar to the letter the woman had already written on her own. They sent her misspelled documents. And then they let Chase foreclose on her house without saying boo to her. Needless to say, we’re adding them to our suit. They did nothing but ensure another foreclosure.

Modification may cut off recourse. Most loan mods include indemnity language that may prevent you from suing. They also tend to ratify the exact language that we want to exclude.

Bottom line, I have yet to see anything that shows me that these people have the right to foreclose. That's where the battle needs to be fought.