Lenders and creditors have always been quick to lend a helping hand when it comes to modification of mortgage loans. By doing a quick search on the internet and processing an online application, several creditors will not hesitate to contact you and make you an offer. They even match the offers of their competitors in the industry, making it more difficult for you to choose which one to go with. However, still, are you really sure that they are indeed there to lend you that much-needed helping hand?
Obviously, they would claim that they have the most altruistic of intentions. Good for you if you end up doing business with a lender that has the purest of intentions. Still, you should not discount the fact that there have been homeowners who have been reported that their servicers are not as helpful as they claim to be.
Basically, the function of mortgage companies is providing mortgage loans. For every loan that they service, they actually collect a portion of the value for that particular loan. This is an upfront fee that investors pay, whether or not the homeowner who took out that mortgage is able to make payments.
In general, delinquent consumers are ones who are least likely to find help from mortgage loan servicers. This is due to the fact that for every late payment made, the loan provider is entitled to an additional 6% of the monthly payment. This scenario clearly shows how the loan servicers can be far from helpful – and the ones who have to suffer are both investors and consumers.
At first bat, the program “Making Home Affordable” appears a great incentive provided by loan companies to their consumers. Consumers receive the amount of $1,000 when they choose to modify their loan and they receive another $1,000 every year for 3 consecutive years into the program. However, when it comes to foreclosure, consumers would then be charged exorbitantly high fees that can amount to more than the incentive of $4,000. Plus, you have to take into consideration that before the foreclosure took place, consumers would have paid late fees already, up until the mortgage reached default status. Once default is in place, lending companies then collect much higher fees from their investors. The procedures of taking possession of a foreclosed house, the legal arrangements of a property’s title, the maintenance of the property itself, the ordering of appraisals and many more entail fees – and investors have to bear the brunt of this burden.
From just about any perspective, mortgage loan companies are not really as altruistic as they appear to be. Thus, make sure to choose a trustworthy service provider to do business with.
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