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Modifying Your Mortgage? Proceed With Caution.

Sometimes life throws you an unexpected curve ball. A job loss, divorce, or another unforeseen event can threaten your stability and finances. If you fall behind on payments on your home, a mortgage modification is a viable option for preventing foreclosure and getting back on track financially. However, as one recent case in Grapevine demonstrates, caution must be exercised when attempting to modify your loan.

Is the Bank Really Trying to Help You?

According to a recent article on a Grapevine couple, despite entering into a mortgage modification program with their bank, they still lost their home to foreclosure. In the article on mortgage modification, Elizabeth and David Ball started the mortgage modification process with their lender, Citibank. During the process, Elizabeth recalls the bank representative advising her not to make payments while they were waiting for the program to be approved. This is not true. When possible, payments should always continue when a home is under review for a loan modification program.

While they were waiting for the modification to be processed, the couple began receiving notices of Citigroup's intent to foreclose on their home. The bank representatives assured the Balls that everything would be taken care of and that the foreclosure department had not caught up with the work going on in the modification department. Unfortunately, despite their efforts, the couple ended up losing their home of 21 years.

The Consumer Finance Protection Bureau has logged over 223,000 of these types of complaints since July of 2001. The complaints state that lenders drag out the modification process by repeatedly asking consumers to send in the same documentation. Some loans may even be dual-tracked, meaning that they are in foreclosure proceedings and the modification program simultaneously. This is illegal under federal regulations.

When Faced with Foreclosure There Are Options

While a modified mortgage seems like a great option to avoid foreclosure, it is imperative that you proceed with caution. There are also other options to consider. Given the number of cases where homes entering into these programs ultimately resulted in foreclosure, having an experienced attorney on your side ensures the process is done right. Working with a lawyer who is familiar with these situations gives you peace of mind that the legal process will be carried out properly and you can avoid having your home swept out from under your feet. 

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