January 19, 2010

Is the Gov’t loan mod program a failure?

By Timothy Stull (http://www.fresh-start.co)

This has been a recent hot topic lately. I think the answer to this question is both yes & no. You must understand all the circumstances surrounding this current loan modification fiasco in order to make any type of judgement at all. This involves looking at everything from the beginning. First of all, the loan modification topic drags in alot of public emotion. This is the works economic downturn since The Great Depression…..many folks are doing what they can to survive. Survival involves doing waht you can to keep a roof over your head and protecting your assets. President Obama entered his term when most americans had experienced the initial shock of having to enter survival mode. The foreclosure issue was a hot ticket on his ballot & he was forced to react quickly to a very complex problem. The ground rules were laid out for the HAMP program….the expectations of the public were sky high. The public began riding the media wave that they were entitled to a loan modification that carried results that were not realistic. I think that the word “realistic” is super important here. In the past, when folks ended up in trouble & faced forerclosure, they sought help from a expert ~ typically an attorney. They were willing to accept a workable solution to their problem in order to stay in their home. Everyone must remember that loan modification is a privilege & not a right. You must remember that I am a consumer advocate at heart ~ otherwise, I would not be so active in foreclosure prevention & debt settlement. I do feel my clients pain daily through the phone conversations ~ I always try to console the financial tensions they are experiencing. On the flip side though, the banks are the ultimate reason for the failure of the Gov’t program. The program was nothing more than a recommendation to the banks to cooperate with the general public. However they, they have been lackluster in actually helping anyone. They simply throw a stack of paperwork at you and say ~ “good luck”. The presents a very uneven playing field ~ the banks supreme knowledge vs. the emotional home owner. The financial information that is submitted by the home owner is typically twisted & then they placed in a repayment program that makes no sense and carries no long term solution. The home owner gets trapped in a bad deal and ends up further in the hole than he already is. I never quite understood why people choose to handle a serious issue such as a loan modification / loss mitigation case on their own. Especially with what is at stake. The media carries the majority of the blame for this ~ however that is a topic for later discussion. As always, I offer free expert advice on this topic and can be reached at 877.297.7011.

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