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Banks Get The Gold Mine

Consumers Get The Shaft … and

Jesus Loves You

Sometimes actually getting the bank to give a loan modification doesn’t end with the borrower being getting their issues solved.

Loan modifications are an emotional roller coaster. From the day a borrower finally gets a living, breathing human on the phone that promises to send a modification package until weeks down the road when it’s realized that the package is not showing up will totally wring the spirit out of just about anyone.

The fact of the matter is that, at this point, the banks are basically only required to put for an effort by contacting consumers. The administration has required the banks to show good faith to homeowners in default. In order to receive stimulus money, the banks must collect statistics regarding how many distressed homeowners they’ve reached out to but they are not obligated to re-write or modify even one loan.

Occasionally, a bank will actually agree to a modification but since there are few guidelines it’s like playing a shell game for consumers. They struggle through the process only to get finally get their modification and have little if any change to their situation.

My writing life outside of the weekly column consists of managing my own blog that receives comments and contacts from many people that are struggling in one way or another with a housing predicament. A recent correspondence read in part:

Yes I did a loan modification with my lender. I thought that under these Modifications that they were suppose to put “behind payments” at the end of the loan. Well I did end up with a lower interest rate but they tacked on 9,844.46 raising my balance from $125833.82 to $134094.44, because of that I now owe even more. My payment only went down $25.00. PLEASE HELP ME.

What a tremendous amount of time, money and hope was squandered by a loan modification that would only reduce a house payment by a measly twenty five dollars. There’s little doubt that that transaction will go in the “look, we’re a progressive bank and helped consumers” pile for the administration.

The harsh reality about loan modification is that only a little over 200,000 modifications have been offered to date. Compare that tiny sum to the millions of consumers that really do need help and the statistics stink worse than yesterday’s trash.

There are still no mandatory requirements planned for lenders to have to help borrowers who are eligible, currently in default or the unfortunate owners of one of the millions of option adjustable rate mortgages that will reset within the next two years. I’ve already seen the term “Option Armageddon” used in discussion about the situation.

If you’re struggling with loan modification you should know that the only requirement that has happened so far is that as of January 1, 2010 loan modifiers will have to be licensed in the state of Florida, unless they’re already licensed as an individual mortgage broker.

Everyone can rest easy knowing that a license now is required to help consumers get a loan modification from a bank that has no mandatory requirements to help anyone.

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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area.  Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor.  If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.

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