Are Loan Modifications a Scam?
Programs that are created as a knee jerk response to some sort of impetus, which have never been a part of the standard operations of any industry easily become train wrecks, or as I like to call them, yard sales (a term that describes the scene of an average Xtreme Sports crash.) Those in charge don’t know what’s going on, and the programs fail. Sometimes these programs are someone’s “bright idea” to avert public panic when in fact, the idea itself is a smoke screen for other activities.
In the age of foreclosures, where millions of people borrowed beyond their means, and banks allowed them to do it, home owners have been walking away from their homes in droves as they’ve discovered their payment, which has adjusted according to the terms of their note, is no longer affordable. Nothing new here. Strategic defaults, where the owner decides that it’s just not in their interest to fulfill their promise to repay, are also part of the mix.
Banks know that this is going on, and they also anticipate a flood of law suits in the future. Loan modifications are intrusive with no resolution for the home owner. They’re a pie in the sky “potential solution” for someone who thinks their bank cares about their well being. Big news…big banks don’t care about you, and neither does the federal government. When you go through a “loan modification” qualification process (yes, you need to qualify, according to them) you are asked for mounds of information about your life. Who you bank with outside of your lender’s institution, where your investments are held, how much you have in assets, where they are, and…well, more than they’d ask you for if you were applying for a loan.
They’re mining information.
They have no intention of helping you solve your loan problem. They may make it look like they’re helping by offering you a deferred payment plan for a short while, or a reduced interest rate for a period of time, but in the long run, the bank still wins. Your savings now are tacked on to the end of your loan later. If you go through this process, you’ll learn how frustrating it is, and most likely will become bitter at the bank as you discover how disingenuous they are.