By Atty. Crispin Lozano
The U. S. Treasury Department reports last August 5, 2009, the slow progress of the banks on the loan modifications program. Of the 38 loan servicers that registered in the Obama Program, only 9% of the delinquent borrowers were modified. This is equivalent to 235,000 loans modified since the program started. Among the reasons the banks said is that the investors are not cooperating in the program. The other main reason is the shortage of staff in the bank’s loss mitigation department that handles loan modification. A summary of the banks performance on loans modified as a percent of delinquent borrowers is as follows:
1. Saxon Mortgage 25%
2. Aurora Loan Services 21%
3. GMAC 20%
4. J. P. Morgan Chase 20%
5. Citi Mortgage 15%
6. Wells Fargo Bank 6%
7. Bank of America 5%
Question: What does the statistics suggest to borrowers?
Answer: The statistics showed that the banks are very picky on what loans to modify. The main reason is that the staffs in the Loss Mitigation Department of the bank are so busy that they have no time to analyze the individual borrower’s case. There is huge number of applicants but the banks staffs are insufficient to serve them effectively. Many of my clients tried to do the loan modification themselves but they are unsuccessful. After signing up for our services we immediately contacted the bank and they later on agreed to have our client’s loan modified.
Question: What types of loan can be modified under the Obama program?
Answer: The Obama Loan Modification Program will modify loans that are secured through Fannie Mae and Freddie Mac. FHA loans have their own program of loan modification.
Question: What should borrowers with FHA guaranteed loan do to request modification?
Answer: Borrowers with FHA guaranteed loans should contact their lender and request loan modification. They may also contact a reputable attorney who do loan modification to negotiate with the lender.
Question: Can a homeowner apply for loan modification while in bankruptcy proceedings?
Answer: Yes. However, it is better to apply for loan modification before filing bankruptcy because you have a better chance of getting better terms in modifying your loan. Once you filed for bankruptcy you will need to pay whatever are the scheduled monthly payments on the mortgage during and after the bankruptcy proceedings. Only unsecured debts may be reduced or discharged in bankruptcy. Secured debts such as mortgage payments will have to be paid as scheduled or the lender will request the court to lift the automatic stay and foreclose your property.
Question: May a borrower request loan modification while in foreclosure?
Answer: Yes. A foreclosure process starts when you received a Notice of Default (NOD) registered with the county recorder’s office. It ends when the property is sold in a public auction at a Trustee Sale. Upon receipt of the NOD you should immediately contact an attorney to do a loan modification. It is important to do this immediately because the Loss Mitigation Department of the bank is very busy and it will take sometime before they finally look at your case. In the NOD you are given 90 days to come up with the payment for all missed payments. If you cannot come up with the payments within 90 days, the lender will send you a Notice of Trustee Sale and will publish the property for sale at a public auction within the succeeding 20 days. After the 20 days of publication and no loan modification is agreed upon, the property will be sold to the highest bidder in a public auction.
Note: This is not a legal advice. You need to talk to an attorney about your specific case. Our office offer FREE initial consultation on Loan Modification only.
Crispin Caday Lozano is an active member of the State Bar of California since 1999. He graduated Juris Doctor (Law Degree) from Western State University School of Law in Fullerton, California. He is a licensed Real Estate Broker #01297744 since October 2001. He is also a Certified Public Accountant and a Bachelor of Business Administration Cum Laude graduate. His offices are located at 17057 Bellflower Blvd. Suite 205, Bellflower, CA 90706 and 1290 B Street, Suite 205, Hayward, California 94541 and at 777 N. First St., Suite 333, San Jose, CA 95112. You can contact him at telephone (562) 461-1355 and (510) 538-7188.
The U. S. Treasury Department reports last August 5, 2009, the slow progress of the banks on the loan modifications program. Of the 38 loan servicers that registered in the Obama Program, only 9% of the delinquent borrowers were modified. This is equivalent to 235,000 loans modified since the program started. Among the reasons the banks said is that the investors are not cooperating in the program. The other main reason is the shortage of staff in the bank’s loss mitigation department that handles loan modification. A summary of the banks performance on loans modified as a percent of delinquent borrowers is as follows:
1. Saxon Mortgage 25%
2. Aurora Loan Services 21%
3. GMAC 20%
4. J. P. Morgan Chase 20%
5. Citi Mortgage 15%
6. Wells Fargo Bank 6%
7. Bank of America 5%
Question: What does the statistics suggest to borrowers?
Answer: The statistics showed that the banks are very picky on what loans to modify. The main reason is that the staffs in the Loss Mitigation Department of the bank are so busy that they have no time to analyze the individual borrower’s case. There is huge number of applicants but the banks staffs are insufficient to serve them effectively. Many of my clients tried to do the loan modification themselves but they are unsuccessful. After signing up for our services we immediately contacted the bank and they later on agreed to have our client’s loan modified.
Question: What types of loan can be modified under the Obama program?
Answer: The Obama Loan Modification Program will modify loans that are secured through Fannie Mae and Freddie Mac. FHA loans have their own program of loan modification.
Question: What should borrowers with FHA guaranteed loan do to request modification?
Answer: Borrowers with FHA guaranteed loans should contact their lender and request loan modification. They may also contact a reputable attorney who do loan modification to negotiate with the lender.
Question: Can a homeowner apply for loan modification while in bankruptcy proceedings?
Answer: Yes. However, it is better to apply for loan modification before filing bankruptcy because you have a better chance of getting better terms in modifying your loan. Once you filed for bankruptcy you will need to pay whatever are the scheduled monthly payments on the mortgage during and after the bankruptcy proceedings. Only unsecured debts may be reduced or discharged in bankruptcy. Secured debts such as mortgage payments will have to be paid as scheduled or the lender will request the court to lift the automatic stay and foreclose your property.
Question: May a borrower request loan modification while in foreclosure?
Answer: Yes. A foreclosure process starts when you received a Notice of Default (NOD) registered with the county recorder’s office. It ends when the property is sold in a public auction at a Trustee Sale. Upon receipt of the NOD you should immediately contact an attorney to do a loan modification. It is important to do this immediately because the Loss Mitigation Department of the bank is very busy and it will take sometime before they finally look at your case. In the NOD you are given 90 days to come up with the payment for all missed payments. If you cannot come up with the payments within 90 days, the lender will send you a Notice of Trustee Sale and will publish the property for sale at a public auction within the succeeding 20 days. After the 20 days of publication and no loan modification is agreed upon, the property will be sold to the highest bidder in a public auction.
Note: This is not a legal advice. You need to talk to an attorney about your specific case. Our office offer FREE initial consultation on Loan Modification only.
Crispin Caday Lozano is an active member of the State Bar of California since 1999. He graduated Juris Doctor (Law Degree) from Western State University School of Law in Fullerton, California. He is a licensed Real Estate Broker #01297744 since October 2001. He is also a Certified Public Accountant and a Bachelor of Business Administration Cum Laude graduate. His offices are located at 17057 Bellflower Blvd. Suite 205, Bellflower, CA 90706 and 1290 B Street, Suite 205, Hayward, California 94541 and at 777 N. First St., Suite 333, San Jose, CA 95112. You can contact him at telephone (562) 461-1355 and (510) 538-7188.
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