Loan Modification Programs May Not Be the Answer

Loan modification programs exist through the Department of the Treasury and Housing and Urban Development, but when you speak with your lender, make sure that you document everything, including your conversations. I have had three friends in my office over the last year that began exploring a Home Affordable Modification Program (HAMP) with their existing servicer. All three had done everything that the servicer had requested, including skipping payments to show a history of difficulty making the payment.

In all three cases, they were denied the modification and foreclosure proceedings began. This is a horrible situation since two of these borrowers had not missed any payments before talking with their lender. The purpose of this program is to keep people in their homes. If you have had a similar experience, or know someone who has, contact your congressman, or senator. They need to receive feedback of what is occurring.

If you are considering a modification, document everything including the dates and times that you speak with your lender. Try to get everything in writing that they promise you and never skip payments at their request. Protecting your credit and your home are your responsibility. If it sounds too good to be true, it may be.

This blog is for informational purposes and is the opinion of the writer. In financial matters always solicit professional advice and legal counsel if necessary.