The Law Of Unintended Consequences

At the risk of sounding like a spoiled sport about the governments new plan to help struggling homeowners, I must point out the obvious—-Any time the government steps in to help they generally create opportunity for scam artists. It’s known as “The law of Unintended Consequences“.

For instance; loan modifications. Sound good on the surface right? You’ve heard that banks are helping struggling homeowners by changing the terms of their loans to more affordable interests rates. Who would argue with that? Let’s take a closer look.

Fact: These “loan modifications” are not available to everyone. I know I know, that’s not mentioned in the news but it is fact. They are available to borrowers with ARM’s (adjustable rate mortgages) and other types of subprime mortgages generally prone to default. However, if you have a conventional loan you have little or no options. Since ARM’s and subprime loans account for a very small percentage of the total amount of mortgages in the US, that equates to few, if any opportunities for the majority of homeowners, many of which are currently struggling. Fact: The vast majority of modified loans end up in default and foreclosure.

Over the past couple years, companies calling themselves “loan modification” specialists have formed. They charge upfront fees and take advantage of distressed homeowners. They claim to stop foreclosure, negotiate lower rates and save thousands in mortgage payments. What’s the problem you ask? ---The upfront fees of course and the simple truth that loan modification services are available directly through your lender without third party assistance.

If you or someone you know is considering a loan modification DO NOT use a third party negotiator. Contact your lender directly for information on whether you qualify for modification. Keep in mind however, they are a debt collector. If you do not feel comfortable working directly with your lender, contact the law firm of Oldfield & Helsdon, at http://www.tacomalawfirm.com/ or call Tom Oldfield directly at 253-564-9500 for a consultation about your legal rights. Tell him Gene and Kim sent you. If you discover “loan modification” is not an option, we may be able to help with a “Short Sale”. Contact us for details at 253-539-7653 or send an email to geneandkim@comcast.net.