Loan Deals: News

Millions of homeowners are struggling to pay their monthly mortgage payments and risk losing their homes in foreclosure.  A bad economy, difficult mortgage loan terms, and decreasing home values have all contributed to this bad situation.  The federal government and lenders have stepped in to try to provide solutions.  Foreclosure is not only bad for borrowers but lenders as well.  The foreclosure process is very costly for lenders and it is hard to recover the amount owed on the loan through a foreclosure auction or short sale.  A hardship loan modification may be offered to borrowers who are facing a financial or personal hardship to avoid foreclosure for both the borrower and lender. 

A hardship loan modification involves modifying the loan terms to make the payments lower.  This is designed to help borrowers facing hardship the ability to still make their monthly mortgage obligations with reduced payments.  This can be accomplished through extending the length of the loan, lowering the interest rate, changing the loan from an adjustable rate mortgage (ARM) to a fixed rate mortgage, or in some cases even some principal forgiveness.

A borrower who is seeking a loan modification must demonstrate that they are suffering from a hardship that makes it difficult for them to make their monthly mortgage payments.  There are several hardship situations that a lender might find acceptable.  Some of these include loss of a job, a reduction in income, divorce or death in the family, military service, a major illness or high medical costs, as well as job relocation.  There could be other situations that qualify as well.  Each individual borrower’s situation is different, and each lender has different criteria that they use to determine hardship cases.

The way a borrower demonstrates their hardship is through writing a hardship letter that is part of the loan modification application.  The borrower needs to write a brief but compelling letter that explains their hardship and their willingness to correct their situation.  A borrower should be honest and to the point in the letter and provide back up documents if necessary such as divorce papers, copies of medical bills, or any other documents which will bolster their hardship case.

The federal government has responded to these tough economic times and is strongly encouraging lenders to offer loan modifications to homeowners facing hardship situations.  In fact the federal government has recently rolled out the $75 billion Homeowner Affordability and Stability program.  Under this program the federal government will actually pay lenders $1000 per loan modification they offer.  If you are a struggling homeowner facing a hardship, a loan modification may be just what you need to help get you back on track and save your home from foreclosure.

Loan Modification, Mortgage

WASHINGTON, D.C. - June 10, 2009 - (RealEstateRama) — The Federal Trade Commission has filed a civil contempt action charging a deceptive mortgage foreclosure rescue and loan modification operation with violating a 2001 court order. Many homeowners paid the defendants up to $5,500 in advance and ultimately lost their homes to foreclosure. The FTC has asked the court to halt the unlawful practices, freeze the defendants’ assets, and seek compensation for victims.
According to papers the FTC filed with the court, the defendants told consumers that they would stop foreclosures. They claimed they were “100% successful and had never lost a customer’s home to foreclosure” and advised consumers to pay them instead of making mortgage payments. They also claimed that they would negotiate modified mortgages with lower interest rates, monthly payments, and principal balances. The FTC charged that, in fact, they obtained few, if any, loan modifications for customers.

The defendants also claimed that their selectivity in choosing customers helped them succeed, but they took on nearly every consumer willing to pay, according to the FTC. In addition, the defendants falsely claimed that they would provide experienced real estate attorneys who would represent customers nationwide, and would review consumers’ home loan documents to look for fraud and other lending violations.

According to the FTC, Bryan D’Antonio and three companies he controls, The Rodis Law Group Inc., America’s Law Group Inc., and The Financial Group Inc., doing business as Tax Relief ASAP, violated a 2001 order that banned D’Antonio from telemarketing and misrepresenting material facts about goods or services. The FTC obtained the order against D’Antonio and his former company, Data Medical Capital Inc., for operating a work-at-home medical billing opportunity scheme. D’Antonio pleaded guilty to mail fraud for his involvement in the scam and served almost three years in prison.

The FTC also has asked the court to permanently ban D’Antonio from selling mortgage products or services, including foreclosure prevention and loan modification services, and to renew the 2001 order’s provisions banning D’Antonio from selling business ventures, employment opportunities or work-at-home opportunities, and from telemarketing.

For more information about this matter and to learn how you can get free loan modification assistance from counselors certified by the government, call toll-free at 1-888-308-0934.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

Loan Modification