Will your lender truly help you with your loan modification?

The threat of foreclosure is unsettling. Unfortunately, if your family has fallen on hard times, it can be difficult to meet your monthly obligations. You are not alone.

Over 63,000 Florida homes were repossessed by the banks in 2016. This was the highest number of repossessions in the nation. In an attempt to save their homes, many people have turned to loan modification programs offered by their lenders.

How does a loan modification program work?

Homeowners can request new, modified mortgage agreements that can lower their monthly payments. Some of these new agreements may also have lower interest rates, letting homeowners spread out any past due payments over time. The purpose is to help homeowners stay in their homes through more affordable monthly payments.

To obtain a loan modification, you must work out an agreement directly with your lender – by yourself or with the help of a lawyer. Up until December 30, 2016, a federally funded government program called Make Home Affordable (MHA) assisted homeowners with the loan modification program. However, they are no longer accepting applications for this program and state that homeowners must handle their negotiations on their own.

Does your mortgage company really want to help you?

While a loan modification program is a good option for staying in your home, scandals and scams within the program have made headlines numerous times. And, while you may think these are only with small companies or those with bad reputations, many of the top banks in the industry have been hit with controversy as well.

For example, in the class action lawsuit against Bank of America, more than 200,000 homeowners allege that they would send in numerous documents as requested by the bank. However, the bank would continue to request additional documents, dragging out the loan modification process for long periods of time. In some cases, the homeowners were not making monthly payments (based on advice from their lenders) and eventually lost their homes to foreclosure anyway.

Bank of America is not the only lender who has faced scrutiny over how they handle loan modification requests. Wells Fargo, Goldman Sachs and other reputable banks have had their share of controversy as well.

What can you do to save your home?

If you are facing the risk of foreclosure, seek legal advice from a lawyer with experience helping homeowners with loan modifications. A lawyer can advise you of your legal rights during a free initial consultation, making sure you clearly understand your options before you make any decisions.