malik

Myths and Mysteries: Loan Modifications


Malik Ahmad is a Las Vegas solo legal practitioner, who is admitted in all the courts in state of Nevada. Malik W. Ahmad has wide variety of experience in loans, mortgages, real estate and now he is a full time licensed attorney and counselor at law. He also practices in federal US District Court of Nevada.

Saturday, November 22, 2008

Today, we are going to discuss lots of myths associated with loan modification process. Most of this myth and mysteries are floated and propagated by scam loan artists, and inexperienced people. For instance, there are a lot of myth surrounding the whole lending process and services associated with lenders, new regulations, rate of interest, whether you would not have to pay back the HELOC loan, whether you really have to be delinquent. I had made a list of all of these and in this short article would address all those issues one by one. Again, like I said, most of these myths are fueled by uninformed and confused people who are here to make a quick buck. In my office, I got lots of calls from these loan modification expert who are plying their trade to get a legal umbrella. They advertise as “Attorney Based”, Attorney-Affiliated”. There is no where attorney to be found in their office. If it is, it can be on some 800 number far away from the battle fields of Nevada.

First Myth:

We have done a lot of loans modification. If someone claims that, he is an expert, he is telling a blatant lies. If they had tones of loan modification, how come we are in this crisis in the first place? The banks had a liquidity crisis, the credit was not enhanced, banks were losing money left and right, and these claims are accepted, we would not be in this crisis at this time. They are all blatant lies. Congress just passed Housing Assistance Bill, and loan modification just started, how come these artists had made hundreds of loan modification? This is simply not possible.

The purpose of this article and more on my webpage and in my blogs is just to educate people. Education is the key to the whole process. First, if you are educated, then you would start trusting and that is the cornerstone of any business.

Second Myth:

Does one have to be delinquent on his/her mortgage payments?

Not True: Probably, your economic hardship letter may draw more attention, but other than it is not a crucial all important fact. Sometime, lender would ask questions about delinquency and why they happened. Overall, it may have some weight age, but not a whole lot.

The whole loan modification process is long, cumbersome and tedious. It requires lots of patience. Just few phone calls are not enough. One has to do lots of works. When attorneys are associated, things start moving fast. Phone calls are returned, letters are answered.

Important Tip: Forensic Evidence? I laugh when I get calls from this scam artist about forensic evidence. This is the so called audit these companies do under the guise of forensic evidence. Okay, if you had found a violation, then who is going to sue? Only an attorney can sue, and he needs to find his own independent reasons. Remembers attorney can be sued for malpractice, if they have not done a due diligence of their own work and sued someone without any reason. Please be cautious when dealing with these so called forensic audit companies. Most of them are just ripping off people and making their lives more miserable. Most of the lawsuits, for instance with Countrywide had already been settled and most of the small mortgage companies had disappeared or under the bankruptcy process. So, even if they had violations, where you going to sue and the money come from. Remember, it is very expensive to sue and you had to find the right attorney for that purpose.

Myth: Lenders and servicers are offering principle reductions on borrowers whose mortgage balances are in the red and owe more than the home is worth.

Fact: This is possible, but not done on a regular basis. Most of the HELOCK loans can be knocked off, but not in every case. However, a wider use of this by the banks would destroy the leftover market and most of the banks would close their shops.

Myth: Lenders and servicers are doing everything they can to assist struggling homeowners.

Banks are still resisting the whole thing. Deep down in their heart and minds, they are not happy with the whole situation. The whole thing was started by them, and their so called help is not very straight forward. However, there is a tremendous change in their mode of action. They are working, and hired more people, and return your phone calls swiftly. This need to be handled on a professional basis.

More Myths Later:

We have to be Delinquent?

Short answer is NO.

We can continue the home without Payment?
Not true. You will sooner or later shall be evicted. Your lender is just slow but catching up with the list. Remember, your lender is the owner. How would you feel if some of your borrower does not pay you back? Would you not sue him? Would you not approach the collection agency or a lawyer?

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