There was recently an article in another publication describing how a person was working with their lender on a loan modification for their condo.
Without warning, the condo was sold out from under them at a foreclosure auction. Seems like a rare circumstance, however, if you are in the process of working on a loan modification or thinking about it, keep reading.
One of the agents in our office was perusing the notices of foreclosure and to her dismay, recognized the name of a friend. Our agent called the friend to see if there was any way in which she could be of help.
The friend’s response was a shrieking “What?”. You see, the friend for months had been working on a loan modification with their mortgage company (a well-known bank) and had been repeatedly assured that the loan modification was in process, progressing, and everything would be fine. The friend was absolutely blindsided by the notice.
Fortunately, a call to the lender has forestalled the foreclosure as they continue to work on the modification. However, without the discovery by our agent, the home may have been sold out from beneath her friend.
From our experience in working with foreclosures, bank owned properties, and short sales, the administrators are over worked, some are under educated, and many do not have any decision making authority.
In some of the larger institutions, it is a case of too many cooks spoil the broth. The bureaucracy in these companies is so humongous that one hand does not know what the other is doing with a file. Perhaps in the above instances, the loan modification department was not communicating properly with the foreclosure department.
If you Google “loan modification mishaps,” you will find many tales of woe with Bank of America seemingly being one of the most notorious for these modification mishaps).
If you are involved in a loan modification, please continually check the foreclosure date so you do not get caught off guard by your lender.
On another note, mortgage interest rates have hit a four-month high. If you have the opportunity and need to refinance, it would be a good idea to explore the opportunities now in the event rates continue to inflate.
With money being tight, one acquaintance refinanced and changed their loan back from a 15-year mortgage to a 30-year loan and saved over $800 a month in payments. A great strategy in these times.