Amidst Foreclosures, Loan Modification Programs Abound
November 10th, 2009
The US economy is on a tailspin what with people losing jobs. As unemployment peaks, people are faltering on mortgage payments. Hence, foreclosures have become common. Now the Federal government has come up with a new scheme – Making Homes Affordable program – to help homeowners. As a part of this program, loans of homeowners will be modified so that they are better able to handle the crisis. However, for the first three months, loan modification will be on a trial basis, after which the revision will be on a permanent basis.
However, home owners are unhappy at the slow progress of the program. Actually lenders have been swamped with so many phone calls that progress has been slow. In Hampton, Yancy and Michael A. Blaino had applied for loan modification that was approved by the mortgage company GMAC. The agreement was, however, canceled and now the lender is threatening to take over the property.
It may be pointed out that Yancy and her son Blaino represent the fast growing creed of homeowners who are in trouble because of lost jobs. Seventy three year old Yancy is a retired school teacher. Her earnings total $2,200 per month. The lady and her son bought a sprawling ranch in 2006. They made a down payment of only $123,000. The monthly mortgage payment of the house was $1,089 a month.
They could manage the payments till last year. However, when Blaino became unemployed, the family found it difficult to make the payment. They had heard about the loan modification scheme and got in touch with their lender.
After sending the paperwork, they were informed that the file was not complete. Then GMAC invited the family for a temporary plan under which they had to pay $785 for 90 days. Yancy did so but the lender returned the cheque saying it was delinquent. Yancy then sent certified cheques for three consecutive months to her lender. However, after three successive payments, she was told that the workout plan was canceled and her house would be foreclosed. It was indeed shocking for Yancy.
When Yancy asked, she was told that the mutually agreed upon payment was $1,088. That happened to be the original loan payment and Yancy says that it actually never made sense. Repeated messages to GMAC never bore fruit. Yancy said that the stress of dealing with the lender is taking a toll on her health. However, GMAC spokesperson refused to discuss the case.
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