QUESTION
We've applied for a loan modification 3 times in the past 2+ years and have been given 3 different reasons. Do I have any recourse?
Asked on Feb 13th, 2013 on Foreclosures - Florida
More details to this question:
We've applied for a modification on our first mortgage 3 times in the past 2+ years and have been declined each time, with different "reasons" every time. The first time was "you need to increase your income," the second time was "you make too much money" (which was ridiculous-our income had dwindled) and the third was "the loan was included in bankruptcy discharge and was not reaffirmed." My bankruptcy documents show that both our first and second mortgages, and our car loan, were to be reaffirmed. I suspect that there is some kind of shady business going on.
5 ANSWERS
There are many "reasons" for denial of a loan modification. I agree with you that some lenders engage in fraud and deceit. You need to review your documents with an expert in foreclosure law to determine if you actually do qualify, and if you have any other legal options.
Answered on Feb 20th, 2013 at 9:01 PM
You have no recourse against the bank. The bank is not obligated to grant you a modification.
Answered on Feb 19th, 2013 at 1:30 PM
Bankruptcy & Debt Attorney serving Syracuse, NY
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Theodore Lyons Araujo
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Loan modification programs are largely a fraud as perpetrated by Bank of America, Wells Fargo and their counterparts.
Answered on Feb 19th, 2013 at 1:30 PM
Mortgage Foreclosure Defense Attorney serving Deerfield Beach, FL
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The Ticktin Law Group
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Unfortunately no. This is typical behavior from the bank and it is rampant throughout the industry. While there is no recourse, you can keep applying and hope for the best. The problem is that the bank is not required to modify your loan. Also, if they do modify a loan, they will only do so if it makes financial sense for you and them. Furthermore, the bank may offer a trial period modification to test whether you can realistically sustain the modified monthly payments. Be aware, approval for a trial period does not guarantee a permanent modification. I would advise you to keep trying to obtain a modification (both in-house and HAMP). If you start to miss payments, please understand that foreclosure proceedings may be initiated by the bank. If you do miss any payments, please consult an attorney. Foreclosures are complex cases and having an attorney throughout the process can be the deciding factor in retaining your home.
Answered on Feb 19th, 2013 at 1:29 PM
Chapter 13 Bankruptcy Attorney serving Winston-Salem, NC
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Love and Dillenbeck Law
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As to the third reason, unless you actively signed a reaffirmation agreement with your mortgage company (very rare) , then the mortgage was not reaffirmed. You should contact a HUD approved housing counselor in your area for assistance.
Answered on Feb 19th, 2013 at 1:29 PM