Mortgage Modification Pitfalls

If you’re having problems paying your mortgage bills, a load modification might sound like a really great idea. However, homeowners should be aware that mortgage modification is tricky business dotted with many potential pitfalls.

First, while laws have been changed to force lenders to respond to homeowners within 10 days after they put in a modification request and to provide them with an answer within 30 days, your lender may rule your application incomplete and stretch out the process. Thankfully, a law preventing dual-tracking—the act of processing a foreclosure while a loan modification request is pending—has been put in place to protect homeowners.

A second problem is, however, that loan modifications don’t always offer better terms. In fact, there have been many instances reported of borrowers being offered inferior loan modification plans that put them in a worse position than they were initially in.

Finally, loan modification is a card you can only play once. If you don’t approach the process with utmost care, you may get stuck with a worse deal for the remaining lifetime of the loan.

Given these pitfalls, it is important to consult with an experienced foreclosure attorney before committing to a mortgage modification. It may be possible to pursue other avenues with much more advantageous outcomes.