Mortgage Modification - Why Your Application Never Gets to the Bank

Mortgage modification is one of the best ways to avoid home foreclosures, but the process is fraught with uncertainty and delays.

After going through a mortgage modification process, the current interest rates are lowered and so the homeowner ends up having to pay a lower monthly installment.

However, homeowners are finding it difficult to get a mortgage modification.

Typically, lenders will give qualified property owners a trial period to see if they have the ability to pay the monthly dues regularly. Usually, this trial period will last 3 months.

But this is where a lot of the problems surface.

It appears that there are often cases where the communication process falls apart at this stage. Even if the homeowners file all their paperwork on time according to the instructions given, the lenders claim that they never received the documentation. And as a result, the homeowners end up having their application for mortgage modification rejected.

According to U.S. Sen. Jeanne Shaheen, 600 Granite Staters have complained to her office about the poorly set up modification application process.

Shaheen added, “For most of the time I’ve been in the Senate, this has been the No. 1 constituent concern I’ve heard from people.”

When it does work properly, this modification process allows a win-win situation for everyone. The homeowner gets to keep his home, and the bank get to continue collecting the mortgage payments.

Unfortunately, the existing process takes a lot of effort to handle the vast amount of paperwork, and communication breakdowns are common.

Good news is on the horizon, as Shaheen has proposed new legislation to penalize lenders who do not cooperate with homeowners. A new appeal process is also being proposed to help those who were rejected for the mortgage modification.