What is happening lately is another opportunity for the mortgage industry to take advantage of homeowners. Suppose your servicing company or lender offers you a loan modification, they may offer you a loan modification with the promise that you will be given a new contract after a few months if you pay a new monthly fee under the guise of a “trial modification program”. Sometimes they may even ask for an upfront fee such as $10,000 or $20,000 to lock you into a loan modification down the road. They give you hopes you can work out new terms with them. After all, you are just a homeowner/debtor that wants to pay their mortgage and live in peace. They even give you a contract to sign noting your agree to a loan modification.
The reality is that they take your money and put it into a “suspense account” that counts towards absolutely nothing in terms of the debt you owe. Then when you get close to the end of a trial modification period, they suddenly announce to you are not getting the modification. They may also send your account over to a new company which has now taken over servicing the account. All that money you paid into the modification, well that counts for nothing. That new servicing company, guess what, they don’t have to offer you any modification program. What about that contract you signed? Unfortunately a contract is binding if both parties sign it. Would it surprise you that lenders and the servicing companies usually never sign the contract for a modification program. So why do they have to offer you anything, they never agreed to it in writing.
If facing foreclosure, educate yourself and seek competent legal assistance.
The following information is just opinion and not to be intended as legal advice. Please seek a local attorney in your area for the best advice on how to protect your assets
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