Beware of Mortgage Loan Modifications


Mortgage Loan ModificationRecently, the Federal Reserve announced that it would purchase $40 billion of Fannie Mae and Freddie Mac loans per month, indefinitely. This will allow the Federal Reserve to have a vested interest in Fannie and Freddie and to be a significant voice in Fannie’s and Freddie’s loan modification policies and procedures, which are so overwhelming that often the average homeowner just gives up. Some homeowners stick it out by repeatedly sending out the same documents to the lender. If they successfully obtain a loan modification, in most instances it will only temporarily reduce the initial interest rate, roll in any arrearages and then amortize that amount over 30 or 40 years with a balloon payment at the end of the original term. As an example, if your original loan is amortized over 30 years, but your actual remaining loan period is only 20 years, you could end up owing a balloon payment in 20 years at the end of the original term loan. If you don’t have the money to pay the original lender, and you cannot refinance, the lender will foreclose on the home. All of this information may be hidden in your loan modification’s small print.

Before accepting a loan modification from your lender, you should consult with an experienced mortgage loan modification attorney about the hidden pitfalls with paying the loan off, as well as ensuring you are not waiving any of your rights under your current mortgage. Please call my office at 480.833.1113 to set up an appointment today!

Attorney Profile: Janet Spears, Debt Relief Attorney


Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Rowley Chapman & Barney, Ltd. | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.