Loan modification can be offered to any person who is falling back on his mortgage payments. The lender verifies through the agent of the borrower that he is equipped to pay the money if the mortgage structure is revised. Then he makes his offer, the only way out of short sale or foreclosure (unless a borrower is planning bankruptcy); if the borrower agrees to it then his loan is modified. Unfortunately, there is a dark angle as well.

Loan modification allows a brokerage commission to the broker of the mortgage deal. This is why he has his vested interest. This is why he tries to push you to a modification plan by charging you with foreclosure or short sale threat. While this still might not be the legal course for the lender, the borrower gets emotionally  failed down.

Even a cunning borrower can show a deliberate default to get the loan modified. This is why such restructuring needs to be evaluated properly.

This entry was posted on Tuesday, February 3rd, 2009 at 6:45 am and is filed under Financial evaluation, Loan Scams. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.