Wednesday, September 17, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Home loan modifications remain an enigma

By
From page C2 | October 13, 2012 |

Q:  Over the past several years, you’ve consistently been pretty negative about the ability of people to get a loan modification. I remember you even called it a “scam.”

Well, we’re now in a position to need a modification if we are going to be able to keep our house. I won’t go into the details, but we’ve done exactly what you have always preached against – we used our IRA to help augment our loan payments. Now the IRA is down to nothing and we don’t know what we’re going to do. So my question is, has anything changed? Is there more light in the tunnel for loan modifications than there was a few years ago?

A: Simply put, very little has changed on the loan modification front. However, I have seen some “weird” things recently that give me a glimmer of hope that a few, probably less than a handful, of homeowners are receiving some substantial help.

To recap for readers who haven’t kept up as well as you have: For the most part, mortgage modifications have been nonexistent.

Everyone has to clarify for themselves what they mean when they say “loan modification.”

Sure, if you need temporary help, such as a temporary rate reduction, or you need to put some missed payments on the back of the loan, banks can often accommodate you. But that’s generally true in good times and bad.

When most people they think about a needed loan modification, they’re thinking about reducing the balance of the loan to something closer to the market value of the property. Or perhaps they have a balloon payment coming due and they just want a 30-year fixed mortgage. Or even just a permanent rate reduction.

All of these are very, very rarely obtained.

The reasons are numerous and too extensive to go into here. But it has to do with the way home mortgages were done over the past decade. There are mechanical problems which make it all but impossible for your loan servicing bank to permanently change the terms of your loan.

It would be great if they’d just come out and say so. But the terms of the Troubled Asset Relief Program, bailout, so many years ago now, mean they have to keep up the charade.

But last week I did see a proposed modification that actually permanently reduces the balance of the loan. It’s part of a government program that I suspect is too small, has too many complicated qualification requirements and is simply underutilized by the banks. That has certainly been true of the last four federal programs.

But the fact that I’ve actually seen with my own two legally trained eyes the terms and conditions of this woman’s modification gives me some assurance that somebody is actually getting an honest-for-goodness loan modification.

Generally speaking though, we are in that same mindless loop where the banks, or independent contractors pretending to be the bank, take all of your paperwork for “processing.”

Then they lose your paperwork, so you resubmit it.

Then when you call back, nobody ever heard of “Bob,” who was the guy you spoke with last time.

Then after a few months they tell you “underwriting” rejected your request because you were current on your payments.

So you start missing payments.

Eventually you either get frustrated enough to research doing a short sale, or they foreclose.

I wish I could tell you there was an ever-increasing ray of hope out there. But I’ve yet to see it, at least not on a large scale.

Maybe time will tell if the banks are finally ready to fully utilize the available government programs.

In the meantime, I truly believe it’s important for homeowners in your position to exhaust their various options.

If you think that unloading your house is the best long-term solution for you and your family, then forget the loan modification and the resulting frustration.

But if you still really, really want to try the modification route I would encourage you to do so. Maybe you’ll get lucky and win the loan modification lottery.

If not, at least you’ll know you gave it your best shot. That, too, will be helpful in putting your mind to ease many years from now.

However, the one piece of advice I’d leave you with is to be very careful of any loan modification documents you sign.

Many of the documents I’ve reviewed this year purport to say one thing, but in fact say something very different in eight-point legalese type.

Tim Jones is a real estate attorney in Fairfield. If you have any real estate questions you would like to have answered in this column you can contact him at SolanoScene@TJones-Law.com.

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

David Grant doctor’s mission continues

By Ian Thompson | From Page: A1, 3 Comments | Gallery

 
 
Chamber PAC draws candidates to Jelly Belly

By Jess Sullivan | From Page: A2, 1 Comment | Gallery

 
Damaged dog gets going-away party after getting healthy

By Susan Hiland | From Page: A3, 1 Comment | Gallery

 
Police enlist help to find armed bandit

By Jess Sullivan | From Page: A4, 12 Comments | Gallery

 
 
Suisun City slaying suspect case moves forward

By Amy Maginnis-Honey | From Page: A4

Touro University to host Zombie Run/Walk

By Amy Maginnis-Honey | From Page: A4

 
Land trust organizes Rockville Trails Preserve hike

By Barry Eberling | From Page: A4

 
 
Chamber to host Suisun City candidates night

By Ian Thompson | From Page: A5

 
Coastal Cleanup Day targets local waterways

By Barry Eberling | From Page: A6 | Gallery

 
Judge questions juror in Calkins case

By Barry Eberling | From Page: A6

Drama reigns supreme with week’s film debuts

By Amy Maginnis-Honey | From Page: A7

 
Anti-drug programs face funding shortfall

By Ryan McCarthy | From Page: A8, 1 Comment

 
Suisun City police log: Sept. 13, 2014

By Susan Hiland | From Page: A12

Fairfield police log: Sept. 13, 2014

By Susan Hiland | From Page: A12

 
Fairfield police log: Sept. 14, 2014

By Susan Hiland | From Page: A12

Fairfield police log: Sept. 15, 2014

By Susan Hiland | From Page: A12

 
Suisun City police log: Sept. 15, 2014

By Susan Hiland | From Page: A12, 1 Comment

Suisun City police log: Sept. 14, 2014

By Susan Hiland | From Page: A12

 
Weather for Sept. 17, 2014

By Daily Republic | From Page: B14

.

US / World

Woman in wildfire’s path lost almost everything

By The Associated Press | From Page: A1 | Gallery

 
Lumber town takes stock after wind-driven wildfire

By The Associated Press | From Page: A1 | Gallery

PG&E officials leave posts over improper emails

By The Associated Press | From Page: A8 | Gallery

 
Governor signs first California groundwater rules

By The Associated Press | From Page: A9

Things to know about California groundwater law

By The Associated Press | From Page: A9

 
California drivers must give bikes 3-foot buffer

By The Associated Press | From Page: A9, 20 Comments | Gallery

San Francisco trying shaming for quake safety

By The Associated Press | From Page: A9

 
UN: Nearly $1 billion needed now to stop Ebola

By The Associated Press | From Page: A10

CDC study: Americans’ bellies are expanding fast

By The Associated Press | From Page: A10, 3 Comments | Gallery

 
Blacks, Hispanics have doubts about media accuracy

By The Associated Press | From Page: A10, 1 Comment

School bus driver killed during safety drill

By The Associated Press | From Page: A10

 
Hunt on for survivalist charged in trooper killing

By The Associated Press | From Page: A10, 1 Comment

Robbery suspects tried to make off with $15,600

By The Associated Press | From Page: A10

 
Top general: US ground troops possible in Iraq

By The Associated Press | From Page: A10 | Gallery

Obama: Ebola outbreak a threat to global security

By The Associated Press | From Page: A10

 
Afghan suicide bomber kills 3 foreign troops

By The Associated Press | From Page: A13

Mexico airlifts tourists after Hurricane Odile

By The Associated Press | From Page: A13

 
Ukraine lawmakers ratify landmark deal with Europe

By The Associated Press | From Page: A13, 1 Comment | Gallery

Iraq parliament rejects interior, defense nominees

By The Associated Press | From Page: A13, 1 Comment

 
.

Opinion

 
Time for utility execs to start worrying

By Thomas Elias | From Page: A11

Editorial cartoons for Sept. 17, 2014

By Daily Republic Syndicated Content | From Page: A11

 
 
Column focus on campaign signs misplaced

By Letter to the Editor | From Page: A11, 13 Comments

.

Living

Today in History: Sept. 17, 2014

By The Associated Press | From Page: A2

 
Community Calendar: Sept. 17, 2014

By Susan Hiland | From Page: A2

My selfish husband neglects and cheats on me. What’s next?

By Kathy Mitchell and Marcy Sugar | From Page: B5

 
Horoscopes: Sept. 17, 2014

By Holiday Mathis | From Page: B5

All the flavors of fall in one twice-baked package

By The Associated Press | From Page: B6

 
Leave them feeling full with nutritious chia seeds

By The Associated Press | From Page: B6, 1 Comment

A late summer Southern classic – tomato pie

By Elizabeth Karmel | From Page: B6

 
.

Entertainment

CBS: Rihanna out of NFL telecast

By The Associated Press | From Page: A7

 
Leonardo DiCaprio named UN Messenger of Peace

By The Associated Press | From Page: A7

.

Sports

Kazmir, sloppy Athletics lose 6-3 to Rangers

By The Associated Press | From Page: B1 | Gallery

 
Armijo volleyball team falls to Vintage

By Daily Republic staff | From Page: B1

Peavy, Posey help Giants gain ground in NL West

By The Associated Press | From Page: B1 | Gallery

 
Prep volleyball preview: Big goals for city teams

By Paul Farmer | From Page: B1 | Gallery

Raiders games are like live reruns

By Tony Wade | From Page: B1, 2 Comments

 
Sacramento Kings to retire Stojakovic’s jersey

By The Associated Press | From Page: B2

Broncos, Seahawks top AP Pro32 before rematch

By The Associated Press | From Page: B2 | Gallery

 
Union appeals Ray Rice’s indefinite suspension by NFL

By The Associated Press | From Page: B2

Jaguars sign Rodriguez grad Jensen off practice squad

By Staff and wire reports | From Page: B2

 
Short stay at NASCAR’s party for AJ and Almirola

By The Associated Press | From Page: B2

Hindsight: a Ryder Cup tradition, like no other

By The Associated Press | From Page: B2

 
Senator ties NFL tax status to Redskins name

By The Associated Press | From Page: B2

DA: Josh Gordon gets probation in DWI case in NC

By The Associated Press | From Page: B2

 
Anheuser-Busch, McDonald’s voice NFL disapproval

By The Associated Press | From Page: B2

Criticism mounting for Vikings, Adrian Peterson

By The Associated Press | From Page: B2

 
McIlroy wins PGA player of the year award

By The Associated Press | From Page: B2

Grand jury to weigh case of NASCAR’s Tony Stewart

By The Associated Press | From Page: B2 | Gallery

 
49ers defense looks to bounce back from tough day

By The Associated Press | From Page: B9 | Gallery

.

Business

NASA picks Boeing and SpaceX to ferry astronauts

By The Associated Press | From Page: B7 | Gallery

 
Web filter lifts block on gay sites

By The Associated Press | From Page: B7

Alibaba risk: China’s rise leaves out investors

By The Associated Press | From Page: B8

 
Corinthian Colleges sued for predatory lending

By The Associated Press | From Page: B8

UPS expects to hire up to 95,000 seasonal workers

By The Associated Press | From Page: B8

 
US CEOs less optimistic about hiring, spending

By The Associated Press | From Page: B8

.

Obituaries

Margaret King

By Susan Hiland | From Page: A4

 
Minnie Watkins Dixon

By Nancy Green | From Page: A4

.

Comics

Baby Blues

By Daily Republic Syndicated Content | From Page: B4

 
B.C.

By Daily Republic Syndicated Content | From Page: B4

Get Fuzzy

By Daily Republic Syndicated Content | From Page: B4

 
For Better or Worse

By Daily Republic Syndicated Content | From Page: B4

Peanuts

By Daily Republic Syndicated Content | From Page: B4

 
Baldo

By Daily Republic Syndicated Content | From Page: B4

Frank and Ernest

By Daily Republic Syndicated Content | From Page: B4

 
Beetle Bailey

By Daily Republic Syndicated Content | From Page: B4

Rose is Rose

By Daily Republic Syndicated Content | From Page: B4

 
Dilbert

By Daily Republic Syndicated Content | From Page: B4

Sally Forth

By Daily Republic Syndicated Content | From Page: B4

 
Garfield

By Daily Republic Syndicated Content | From Page: B4

Wizard of Id

By Daily Republic Syndicated Content | From Page: B4

 
Pickles

By Daily Republic Syndicated Content | From Page: B4

Blondie

By Daily Republic Syndicated Content | From Page: B4

 
Zits

By Daily Republic Syndicated Content | From Page: B4

Bridge

By Daily Republic Syndicated Content | From Page: B5

 
Word Sleuth

By Daily Republic Syndicated Content | From Page: B5

Sudoku

By Daily Republic Syndicated Content | From Page: B5

 
Crossword

By Daily Republic Syndicated Content | From Page: B5

Cryptoquote

By Daily Republic Syndicated Content | From Page: B5