Wednesday, July 30, 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

 
Solano County Fair set to open Wednesday

By Ryan McCarthy | From Page: A1 | Gallery

Marketing study looks at Berryessa resorts

By Barry Eberling | From Page: A1, 2 Comments | Gallery

 
Police arrest suspected intruder

By Barry Eberling | From Page: A3, 6 Comments | Gallery

Activity is Medicine program coming to Suisun senior center

By Amy Maginnis-Honey | From Page: A3

 
Library teens plan summer reading party

By Glen Faison | From Page: A3

Fairfield tries to end Cordelia Road detour

By Barry Eberling | From Page: A3, 15 Comments | Gallery

 
Caltrans makes I-80 lane change

By Barry Eberling | From Page: A3, 5 Comments

 
 
Big-rig crash shuts down freeway onramp

By Amy Maginnis-Honey | From Page: A5, 2 Comments | Gallery

 
Big-rig driver strikes telephone lines in Fairfield

By Ryan McCarthy | From Page: A6, 5 Comments | Gallery

 
Icon sends first A5 into the skies on maiden flight

By Susan Winlow | From Page: B7

 
‘Guardians of the Galaxy’ primed for big screen

By Amy Maginnis-Honey | From Page: A7 | Gallery

Fairfield police log: July 27, 2014

By Glen Faison | From Page: A12

 
Suisun City police log: June 27, 2014

By Glen Faison | From Page: A12

Fairfield police log: July 28, 2014

By Glen Faison | From Page: A12

 
Suisun City police log: July 28, 2014

By Glen Faison | From Page: A12

Weather for Wedneday, July 30, 2014

By Daily Republic staff | From Page: B14

 
.

US / World

Hamas demands for cease-fire and Israel’s concerns

By The Associated Press | From Page: A1, 1 Comment

 
Israel hits symbols of Hamas rule; scores killed

By The Associated Press | From Page: A1

Fist bumps less germy than handshakes, study says

By The Associated Press | From Page: A2, 3 Comments | Gallery

 
California lifeguard injured by lightning improves

By The Associated Press | From Page: A5

PG&E charged with obstruction over San Bruno blast

By The Associated Press | From Page: A5

 
Chevron California refinery overhaul up for vote

By The Associated Press | From Page: A5

New California fines for wasting water take effect

By The Associated Press | From Page: A5, 1 Comment

 
4 charged with murder in death of USC student

By The Associated Press | From Page: A8

Crews make gains on 2 California wildfires

By The Associated Press | From Page: A8 | Gallery

 
Tuberculosis patient who refused care is arrested

By The Associated Press | From Page: A8 | Gallery

Last crew member of Enola Gay dies in Georgia

By The Associated Press | From Page: A9

 
Poll: Immigration concerns rise with tide of kids

By The Associated Press | From Page: A9 | Gallery

US, Europe impose tough new sanctions on Russia

By The Associated Press | From Page: A10 | Gallery

 
Shelling adds to mounting civilian toll in Ukraine

By The Associated Press | From Page: A10

Generation of tanners see spike in deadly melanoma

By The Associated Press | From Page: A12, 1 Comment

 
Senate confirms McDonald as VA secretary

By The Associated Press | From Page: A12 | Gallery

Body of young stowaway found in US cargo plane

By The Associated Press | From Page: A12

 
Report: Health premiums rose significantly in 2014

By The Associated Press | From Page: A12, 1 Comment

Highway, bridge money at risk: Senate to vote

By The Associated Press | From Page: A12

 
Senate bill would end NSA phone records collection

By The Associated Press | From Page: A12

Liberians in US worry about Ebola outbreak

By The Associated Press | From Page: A13

 
Top doctor dies from Ebola after treating dozens

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

.

Opinion

What kids don’t know would shock you

By Letter to the Editor | From Page: A11, 34 Comments

 
Cemetery support committee thanks sponsors

By Letter to the Editor | From Page: A11

 
Red light camera fate now uncertain in state

By Thomas Elias | From Page: A11

Obscure state agency creates big money problems

By Dan Walters | From Page: A11

 
Some people have missed the drought memo

By Letter to the Editor | From Page: A11, 17 Comments

.

Living

Today in History for July 30, 2014

By The Associated Press | From Page: A2

 
Community Calendar: July 30, 2014

By Susan Hiland | From Page: A2

What to do when ‘it’ hits the fan

By Barton Goldsmith | From Page: A2

 
I like Liam, but I think he’s interested in another girl

By Kathy Mitchell and Marcy Sugar | From Page: B5

Horoscopes for July 30, 2014

By Holiday Mathis | From Page: B5

 
A healthy afterschool snack that eats like a treat

By The Associated Press | From Page: B6

A do-ahead dinner to make back-to-school smoother

By The Associated Press | From Page: B6

 
You too can bake artisanal quality bread at home

By Elizabeth Karmel | From Page: B6

.

Entertainment

Music aside, Queen of Soul is pumped for fair food

By The Associated Press | From Page: A7

 
Sarah Palin launches online subscription channel

By The Associated Press | From Page: A7, 2 Comments | Gallery

‘Sharknado’ sequel has bite and lots of laughs

By Frazier Moore | From Page: A7 | Gallery

 
TVGrid

By Daily Republic Syndicated Content | From Page: B7

.

Sports

Fairfield Indians blank Next Level Athletic to win SRL tournament title

By Daily Republic staff | From Page: B1 | Gallery

 
NCAA settles head-injury suit, will change rules

By The Associated Press | From Page: B1

49ers WR Brandon Lloyd enjoying return to NFL

By The Associated Press | From Page: B1

 
Schaub settles in as Raiders starting QB

By The Associated Press | From Page: B1 | Gallery

 
Husband arrested in death of NBA player’s aunt

By The Associated Press | From Page: B2

Triple-A brawl results in 11 suspensions

By The Associated Press | From Page: B2

 
Broken water main floods UCLA; 5 people rescued

By The Associated Press | From Page: B2

49ers sign former Cardinals RB Alfonso Smith

By The Associated Press | From Page: B2

 
Vin Scully to return for 66th season in LA in 2015

By The Associated Press | From Page: B2

Mudcats tie Vacaville Admirals

By Daily Republic staff | From Page: B2

 
No joke: Kings’ Cousins hopes for Team USA shot

By The Associated Press | From Page: B2 | Gallery

Liriano fans 11 in Pirates’ 3-1 win

By The Associated Press | From Page: B2

 
Athletics rally for 6 runs in 9th, beat Astros 7-4

By The Associated Press | From Page: B2 | Gallery

 
This date in sports history for Wednesday, July 30, 2014

By The Associated Press | From Page: B3

.

Business

Study: 35 percent in US facing debt collectors

By The Associated Press | From Page: B7

 
Stocks end lower ahead of economic data

By The Associated Press | From Page: B8

Twitter 2Q results soar, stock flies high

By The Associated Press | From Page: B8

 
McDonald’s could be liable for labor practices

By The Associated Press | From Page: B8

Food writers subpoenaed in ‘pink slime’ lawsuit

By The Associated Press | From Page: B8

 
.

Obituaries

Robert Dale Myers Sr.

By Nancy Green | From Page: A4

 
Jeanetta M. Hale

By Nancy Green | From Page: A4

Patricia Jo McDonald

By Nancy Green | From Page: A4

 
Jack L Hudack

By Nancy Green | From Page: A4

.

Comics

Baby Blues

By Daily Republic Syndicated Content | From Page: B4

 
Peanuts

By Daily Republic Syndicated Content | From Page: B4

Rose is Rose

By Daily Republic Syndicated Content | From Page: B4

 
For Better or Worse

By Daily Republic Syndicated Content | From Page: B4

Garfield

By Daily Republic Syndicated Content | From Page: B4

 
Blondie

By Daily Republic Syndicated Content | From Page: B4

Frank and Ernest

By Daily Republic Syndicated Content | From Page: B4

 
Sally Forth

By Daily Republic Syndicated Content | From Page: B4

Dilbert

By Daily Republic Syndicated Content | From Page: B4

 
Zits

By Daily Republic Syndicated Content | From Page: B4

Beetle Bailey

By Daily Republic Syndicated Content | From Page: B4

 
Get Fuzzy

By Daily Republic Syndicated Content | From Page: B4

Pickles

By Daily Republic Syndicated Content | From Page: B4

 
Baldo

By Daily Republic Syndicated Content | From Page: B4

Wizard of Id

By Daily Republic Syndicated Content | From Page: B4

 
Word Sleuth

By Daily Republic Syndicated Content | From Page: B5

Cryptoquote

By Daily Republic Syndicated Content | From Page: B5

 
Crossword

By Daily Republic Syndicated Content | From Page: B5

Sudoku

By Daily Republic Syndicated Content | From Page: B5

 
Bridge

By Daily Republic Syndicated Content | From Page: B5