It sounds great when mortgage services call you and offer a loan modification where your monthly payment will significantly become lower and the phone calls for immediate payment will go quietly. For sure this is possible, your monthly payment will be much affordable but connected to different aspects. Majority of these loans can have a negative effect on borrower financial health. So it is really important that the borrower educates about loan modification details first and reduces the afterward risks. Knowing some of those risks will fulfill the needed knowledge before signing a loan modification application.
The possibility of missed monthly payments
This is a leading cause for lost homes in the USA and the greatest danger of loan modifications. Missed payments cause back charges like late fees, default charges, forced insurance and home inspection fees. This all ends up with foreclosure. People easily forget when signing loan modification application that these also have back balances in the form of high monthly payments.
Services like banks are pretty known for slow responses, lost documentation and sometimes total lack of effort. This all leads to a delay which builds to homeowner fees, accumulates payments and slips homes to foreclosure. Entire modification bureaucracy undermines the entire modification process with its “power” of delay.
Bank and servicer incompetence
There was created outnumbering servicers and banks with incompetent modification departments which lead to a massive home loss throughout the USA. Statistic numbers show incredible delaying, under the caring and unprofessional work of these departments.
Not enough savings
The biggest mistake a homeowner can do is not to save missed payments while seeking a loan modification. Wasting money on a new car, too much eating outside, using credit cards incredibly are just some of the forms that are usual problem for every other family. Even statistics of nearly 30 years of loan modification business show that people who don’t make mortgage payments never save that money. These missed payments grow to some unmanageable amounts which usually end up with foreclosure and bankruptcy.
Lack of legal service help
This leads to a situation where homeowners gamble and experiment with their own property because of having no experience or knowledge about their helpful options. These situations grow despite the fact that help of specialized representation leads usually too successful mortgage modification. Unfortunately in lack of trust homeowners go for it alone, do the wrong things while having great options of affordable legal counseling.