Heres What To Expect In Loan Modification
As I'm sure you know, news of the "rescue plan" or "bailout" has been the top news story for months
. With the promise of $700 billion going to save the economy, our failed banks, and the bad mortgages that millions of Americans have, how do you know if this government program can save YOU and your mortgage?
The truth is ... you don't. And you might not for some time.
As with the original Hope for Homeowners act passed in April 2008, this rescue package, still called Hope for Homeowners but now in tow with a newly formed Troubled Asset Relief Program (TARP), has some major shortcomings which will, unfortunately, NOT SAVE millions from suffering the high costs of foreclosure.
David Leonhardt explained in a recent New York Times article, "The Treasury Department's $700 billion bailout fund -- as its structured now -- may spend almost nothing on troubled mortgages of the regular homeowner or investor."
News reports also uncovered that over half of the $700 billion that was set aside to stop foreclosures has already been spent. Other reports confirm that the government is well beyond this amount and is actually committed to trillions of dollars in aid. However, the majority of this money will never reach the everyday homeowner in trouble.
So where is this money going?
It was given, and is still going to, to the top 5 banks for their rescue. And how are these banks spending most of this taxpayer money? To merge with or acquire other banks and pay off the Wall Street investors.
The dicey part is that the banks are still not required to publicly report where and how this money is being spent. This is part of the accountability issue that the government was struggling with when trying to pass this bill through Congress.
Nov. 10, 2008 (Bloomberg) -- "The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return."
This is a big problem whose solution (if any) will not reach Main Street homeowners in trouble anytime soon. In fact, it complicates and delays these funds getting to troubled homeowners.
There's also the same issue that stalled out the original Hope Now bill where the decision to help you and your mortgage -- or not -- STILL rests in the hands of the BANKS. And today, the banks are even more overwhelmed and inundated with requests for loan modifications. Can you imagine how many people are calling everyday to get help?
Kevin Lapoint, who is one of many counselors certified and employed by the Housing and Urban Development (HUD) agency to deal with millions of troubled mortgages, says, "The government programs announced so far to help homeowners with delinquent mortgages have not been much help, and I don't expect that to change."
Lapoint goes on to say that, "short of modifying everyone's loan, any new program won't likely make much of a dent because of the differing loan circumstances and complications that can arise when there is more than one lender or lien on the home. More importantly, banks don't have to participate ... these rescue programs that the banks that are supposed to extend to Main Street are completely voluntary."
The truth is that many homeowners in danger of foreclosure are simply falling through these huge cracks in the system. However, there are those that are not The trick is to know what youre doing (keep reading).
The unfortunate truth is that while the government and banks are scrambling to divvy out this bailout money (and not doing it in a systematic, fair, or accountable way), you and your house could run out of time and get foreclosed on.
So now what?
What you must do is get your plan of attack to strategically deal with foreclosure if you are going to protect what you still have and cut your losses ... or avoid them altogether. You'll be safer knowing which of the many viable strategies you can actually run with as your best bet rather than counting on government funds to reach you.
Your #1 best avenue to avoid foreclosure is still trying to workout a loan modification with your bank. Banks are allowing some pretty unbelievable workouts with unheard of low rates and forgiveness.
But loan modification approvals are not consistent, have qualifications, and there are definitely things you can do and say that will greatly increase your chances of getting the loan you need to survive and keep your house.
The vulnerable part to todays current loan modification process is that you basically get one shot at a workout with your bank. Unfortunately, I've seen and heard all too often of so many who missed or blundered this unprecedented opportunity.
How?
Most people don't understand what's behind the banks strategy and needs don't realize exactly what they should ask for, what to say ... and what not to say ... or how to negotiate with their bank. Because they dont have this critical insight, many are losing out on the best loan modification opportunity of the century.
There are many fine lines you'll need to walk with your bank, and knowing them will make all the difference in whether you get the loan modification you want ... or not.
On my website you'll read many reasons why it's not a good strategy to stick your head in the sand when you're facing foreclosure ... or wait around for rescue money when you have so much to lose.
Before you make that precious call to your banks loan modification department, make sure you know what youre doing and what youre up against. Its so worth understanding this process because the result could be that you avoid the possibility of losing everything.
Learn more at www.surviveyourforeclosure.com
Keep the faith and keep moving forward,
by: Elin M Bullmann
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