QUESTION
Why don't loan companies lower the interest rate when they modify the loans?
Asked on Sep 04th, 2013 on Foreclosures - California
More details to this question:
They never lower the rate; they just add more years to the loan and add to the loan all payments that were not made. I only owed $90,000 when I was not able to make payments and then the bank gave me a loan modification and made the loan $102,000 with the same rate but added 20 more years to the loan. Do they all do this and is this legal? They are making a killing off people that need help. Is there anything legal I can do about making the loan for the amount I had when I had to stop making payments and are they suppose to lower rates when the modify loans. The rate is the same that I always had.
3 ANSWERS
Kenneth Steven Pelsinger
Should not accept a longer payout your loan will cost you much more over the life and your bank should have lowered your interest rate
Answered on Sep 09th, 2013 at 7:05 AM
General Law Attorney serving Cherry Hill, NJ
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Mark S. Cherry, Attorney at Law, PC
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There are several programs that have rate reductions. They are a function of affordability, not market value. Your investor has guidelines and may or may not participate in the Making Homes Affordable program.
Answered on Sep 06th, 2013 at 5:19 AM
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Remember, banks are not required to modify loans. That essentially puts them in the driver's seat to dictate terms of any modification to which they will agree. There is nothing illegal about that. That said, you are best advised to have a real estate lawyer examine your particular situation to determine whether your lender has acted appropriately in accordance with the terms of your loan and applicable law.
Answered on Sep 06th, 2013 at 5:19 AM