According to Treasury Department data release Friday, March 12, nearly 90,000 “distressed borrowers” will be losing their mortgage aid under the government’s foreclosure prevention plans, and many more currently paying modified, lower payments on their loans will lose those modifications despite the fact that they are up to date.
While some of these losses are due to a failure to prove that they were qualified for this help in the first place, many other participants are losing their current modifications due to earning too much or too little since they started the process. Even more intriguing: some of them are actually saving money for retirement, and that can mean you’re out because your savings may hit the roof on the lack of money that allows you to qualify for loan modification long before you reach the point where you can afford your original payments.
Regardless of whether or not you approve of these aid programs, it seems like a pretty hard road for people who dealt with all the paperwork and got a loan modification (regardless of whether or not they were as close to foreclosure as they feared they were) and then made the payments on time and kept their end of the bargain. However, it has led to an interesting development: private mortgage modification aid.
Wells-Fargo, for example, has initiated a number of other mortgage-relief efforts that it handles on its own rather than via federal regulations and mandates. Many of that lenders’ borrowers are currently attempting to exit federal programs and enter the private ones – at least once you’re in there, it seems like you have a shot at getting a cut-and-dried answer on whether or not you’re keeping your home and your payments.
Any time you see private enterprise taking over where the government programs have failed, there seems to be great opportunity and great peril. I think it’s great that Wells-Fargo is taking matters into its own hands and its borrowers – in default and otherwise – into consideration under a series of requirements that the bank has determined are viable for its survival. However, warns one representative of a mortgage-lender alliance that is also trying to establish private aid options for borrowers, “you will see those [foreclosures] as well.” And all too often these days foreclosures equal photo opportunities for federal programs, so I wish Wells-Fargo well.
Your thoughts are welcomed in the comments area below.
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One more example of the government not having a clue about what it really means to help or assist anyone. Just government telling the American people one more lie and then screwing us as soon as they can.
Can only help those that can help themselves? How does the government define help? Must be a failing corporation?
Another very well written, timely and insightful article. Thanks for passing this on to us, Bryan & Carole!
Enough government help. People need to learn to plan their lives and pay for the consequences of bad decisions.
I am in complete agreement with this article. i do a lot of loan modification work and I feel that the bank private modifications are much better than the government involved modifications. The private modifications often do not involve a trial and when they do, the final payments are much closer to the trial payments than what I have seen with the making homes affordable modificatinos. I also agree that a lot of bank are pulling borrowers out of review for government modifications and reviewing them for what are known as traditional modifications.
wells fargo is dragging their feet as I waited for six months to get something done with them,all you get is another $8 an hour customer service rep that tells you to send the same doc’s you’ve already sent 5 times and in the meantime wells gets you in s deeper(money owed) hole. Wells fargo stinks and if you check they may be responsible for this housing crash,didn’t they get millions from the government? Oh yeah that’s all gone the took a few trips. wellswho
It seems to me that we actually want the government to assist our citizens when they are in fact, in need. After that, this is a “working” economy. NO free rides but with people consious assistance available. That should make sense for both the “help people now crowd” and the “keep government out of our lives crowd”. But of course someone always is going to complain and try to take advantage of the system from one end or the other.
If you can’t get a fed or bank approved loan mod, and you are in a
financial bind…then simply do like the banks and give yourself a
loan mod ….What is that Kelly Clarkson song…..
” Just, Just, Just Walk Away” …from your mortgage (like they are walking away from you)
Of course, don’t just walk away from your house…use every legal
tactic to stay as long as you can..
“SECURITIZE THIS!” baby….