What Is The Role Of Banks In A Loan Modification?
Why Would The Bank Even Consider Modifying A Loan?
Some banks are under pressure from the various state attorney generals and even the federal government to modify these loans. Bank of America, along with some other big lenders, is part of an agreement with these states that they agree to try to help people stay in their homes and to modify their loans.
At an individual level, the bank will look at each individual loan and decide whether to try and keep people in their homes rather than foreclose and take back a house. It’ll just go vacant and maybe get vandalized or destroyed. So, from the bank’s perspective, they’ll modify the loans because they think it’s a better way to deal with the problem and to actually foreclose and let the house go vacant. So, that’s a benefit to the banks.
How Many Loan Modifications Might A Borrower Receive Or Is It Just A One-Time Offer?
Some banks won’t give you more than one loan modification or more than one in every 2 years. It really comes back to the banks, they can do whatever they want because they’re just agreeing to change the terms of a contract and as long as you’re in agreement with it, there is no reason that the loan can’t be modified. So, whatever you and the bank can work out, can be done in loan modification.
The problem is the banks may or may not want to work with you, and that’s why you’ll struggle and submit all the paperwork and get told you didn’t submit this and you didn’t submit that and you may get the run around from the banks. But the reality is the banks can modify your loan at any time.
On the other hand, if you look at it from the bank’s perspective, there has to be some reason to modify it. If you’re unemployed and you have years behind in the mortgage and hundreds of thousands dollars underwater on the house, there is really no reason for a bank to modify it because there is just no reasonable way that you’re going to be able to make payments. But again, it just depends more on the bank than anything, it has to do with you individually.
If you have a good income situation, if you’re back to work and making decent money, your chances of getting a loan modification are certainly much better than if you’re not working.
If you have questions about the Role of Banks in a Loan Modification, call the law office of Attorney James Logan for a free initial consultation at 443-860-0088 and get the information you’re seeking.