Published July 02, 2012
If you think the foreclosure crisis is over, I’ll show you my inbox. It’s filled with emails from people who are absolutely panicked.
Homeowners are hanging on to their houses by a financial thread—in many cases because a last ditch attempt at a loan remodification turned into a disaster. They’re scared and don't know who to trust. And in some cases they’re afraid of trusting the very same bank that is foreclosing on them.
Since reworking a home loan is often the only way families can stay put, how can they make sure the process goes relatively smoothly? Loan modification guru Anna Cuevas says, “There are widespread issues associated with the red tape involved in the application process for loan modifications. On top of this, if homeowners don't know what to expect or, worse, don't know how to push back, there is a very real fear of losing your home and this is an extremely emotional time.”
Usually, the frustrations start right after you apply. The biggest gripes Cuevas hears sound mundane, but turn out to be major problems.
“The bank says they did not receive the fax and that continues throughout the process with [sic] errors in processing and underwriting.”
Cuevas says she’s found five common mistakes that could cost you your home. So here’s what you should consider doing if it happens to you.
1. Giving up too soon and listening to bad advice:
In the fight to save your home from foreclosure, it pays to be the squeaky wheel and it is vital to be empowered with enough accurate information to make you your own best advocate. Friends and family mean well, but they don't always have accurate information.
2. Not investigating the details when turned down for a loan modification:
With the large amounts of applications, high workloads and "grey area" in underwriting, a large percentage of loan modifications are denied due to errors in processing.
3. Not being prepared or feeling confident in the fight to save your home:
If you don't know what you don’t know, then how will you know if there was an error in processing your loan modification or what you could do to change your circumstances and re-apply?
4. Not knowing your household income and expenses and verifying that the bank is using the correct information:
You must be a good steward of your own financial situation by combing through your finances and being on top of every dollar that comes in and goes out.
Related: 4 Brilliantly Frugal Investments
5. Not knowing the rules of the loan modification process and how it works:
It is very important to know how the process works to avoid frustration and understand what changes you may need to make to be able to remain in your home.
There are several programs available today and more are being added to help keep homeowners in their homes. Do not leave any stone unturned in the fight to save your home!
Another warning: Be careful and cautious of ANY company or individual that says they can save your home from foreclosure or promise a loan remodification that will work for you. Here’s a link the Federal Trade Commission put out, filled with good information about scams that could put you further in debt.
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