Dear Sue,
I refinanced my home three years ago. I got one of those pick-a-payment loans and made the lowest monthly payment possible.
My loan is due to adjust to a 30-year fully-amortized loan where I have no payment options.
When I got this loan three years ago I planned on having the option to refinance because I knew that I wouldn’t be able to afford the adjusted payment.
Little did I know that stated-income loans would be discontinued!
Hoping for a loan modification and finding the process intimidating, I went to an attorney who promised to get it done. I gave him $2,500. He closed his office and took my money with him.
A friend of mine suggested that I go directly to the bank and negotiate the loan modification myself. I took her advice and started the process a year ago.
The bank representative told me to stop making my payments. I did as she asked. I put the money in a savings account.
We have been in communication at least twice a week. They reassured me that I would be getting my loan modification any day. Every day it was any day.
Last week a man came to my door and posted a notice of sale. He also told me that I shouldn’t just send the past due money in because in his experience, the banks pocket the money and go ahead and sell the house anyway. He said that I should get a lawyer to help make sure that my loan was reinstated.
I called my lender demanding to speak to a supervisor or anyone that could get this fiasco straightened out. When I finally got someone on the phone they said that there was nothing in my file. No communications. Nothing.
Based on my previous experience with a lawyer, I was reluctant to talk to another one. I knew that I had to do something quickly so I asked a good friend for a referral. I met with the real estate attorney yesterday.
He told me that I needed to send more paperwork to him before he could help me.
Sue, I hope that my story will help others. I plan to keep you posted.
~ Jerked Around Jim
Dear Jim,
I appreciate the opportunity to share your horrible experience. I see many lessons in your story.
Avoid making financial decisions predicated on something changing in the future unless you enjoy gambling.
Never stop making payments on your loan. Never pay an up-front fee for a loan modification to an attorney or anyone else for that matter.
Unscrupulous people come out from under their rocks when they see an opportunity to prey on desperation.
Fortunately, it is now illegal to accept advance fees for loan modifications.
I can only hope that your lender acted out of good faith. Lenders are not prepared for today’s onslaught of loan modification and short sale requests. Their representatives are learning as they go.
The internal communications of lenders are overwhelmed. The loan modification department doesn’t know what the foreclosure department is doing.
Please keep me updated as to the outcome of your saga.
In today’s lending environment it’s hard to make good Home $$$s and Sense.
Sue Thompson is owner and sales manager of HomeTown Realtors in Auburn. She can be reached at seesue@seehometown.com, or on the Web at homedollarsandsense.com.
