Even in the middle of our struggling economy, a select number of people still decide to live beyond their means. While it is true that lenders must bear most of the responsibility for issuing bad loans, consumers must accept some responsibility when pursuing loans that they know they can’t afford. Those who think that they will be able to outsmart the system by purchasing expensive homes with the clear intention of requesting a loan modification down the road should think again. Home loan modifications are not guaranteed and borrowers who are depending on a future loan modification to lower their monthly payment will be greatly disappointed when their plan backfires. Home loan modifications are consumer assistance programs, not mail in rebates or coupons. They should not be used by those who have no problem making their monthly payments, only by those who need legitimate help with their finances.
While it would be nice to say that the loan modification programs offered by lenders were free of fraud, by lenders and borrowers, so is not the case. Loan modification applications from borrowers who don’t really need assistance continue to pour into lending offices around the country. The increased volume of applications creates more opportunities for errors and fraudulent practices by lenders simply looking to clear their desks of paperwork. This means that legitimate requests for assistance by honest borrowers often fall through the cracks and get denied. Honest borrowers also need to remember that home loan modifications are never guaranteed. Even the most honest borrower with the most legitimate claim has the potential to be denied assistance. This scary fact leaves many borrowers worrying that they won’t be able to save their home. When requests for home loan modifications fail, borrowers are often told that their other options include a short sale, declaration of bankruptcy, deed in lieu of foreclosure, etc., but few borrowers are told of their other option: legal action.
Honest borrowers who are nothing more than victims of circumstances who have been denied for lender assistance should seriously consider legal action. Once a lender begins the process of foreclosure, they are starting the process of ripping the home away from the borrower.
Most borrowers forget the simple fact that the home is their home too. Sure, the lender may have put up the money for the home, but up until now the borrower has always been on time with their payments, the borrower has always maintained the condition of the home, and the borrower has more than likely made repairs to the home that have increased the home’s property value. Most importantly, it is the borrower who has raised their family in the home. Borrowers should never let their lender foreclose on their property without a fight. Borrowers who have a history of honesty and hard work should not be made to feel like deadbeat debtors trying to skip out on their responsibilities. Falling on hard times is not a crime and it can happen to anyone. Borrowers who feel that their lenders made an unfair decision on their loan modification application should consult a local real estate or financial attorney to see if taking their lender to court would be a good idea. The attorney will be able to review the facts of the case and advise their client on their chances of success.
Home loan modifications are never guaranteed, but a denied request doesn’t have to be the end of the rope for the borrower.