Just one letter can mask the truth as evidenced in the title of this article. Home Loan Modification has really turned out to be “modi-fiction”, a manufactured term that has very little basis in truth. If you take the “n” out of declining unemployment and substitute “mb” you will have the truth; unemployment is climbing and growing even as you read this article. Regardless of how many presidential press conferences (aka Story Time with Obama) are conducted- the facts still remain the same. Americans are unemployed, losing their homes and getting lost in a sea of double speak and confusing policy.
Fact #1– Of all of the Americans that should qualify for home loan modification, only 11% of those individuals actually do receive financial relief in the form of reduction in interest rates or principal. Many Americans get lost in the application and review process which can take up to 9 months. How many individuals in financial crisis have up to 9 months of liquid assets to stay afloat during this wait? God forbid that your employment status should change during the waiting period. If your application doesn’t immediately enter the Twilight Zone, expect to go back to the end of the line and start the process over.
Fact #2– It is extremely difficult to borrow money today, in some cases impossible as certain loan programs have either gone completely into extinction or as so limited that 1 out of 20 million people could qualify for them. Stated income programs previously allowed potential homeowners to simply “state” rather than prove their income with tax returns- this method was most often used by self employed individuals (1099). Of course there was a cost for this act of good faith, typically a higher interest rate. Today, if you are self employed or an independent contractor, you are more likely to grow wings and fly than to qualify to successfully apply for a mortgage. You would have to submit the previous 2 years of tax returns which demonstrate enough “reported” income to qualify for the mortgage.
Fact #3– Refinancing your current mortgage has about the same success rate as trying to win the lottery. Do not be fooled by the stories out there of homeowners refinancing their mortgages and saving themselves thousands of dollars. You probably do not know anyone who has done so and neither do I. Ask the next ten people that cross you path, they won’t be able to name anyone either. The truth is since the housing bubble burst, most homes are worth significantly less than what is owed on then. Plus the banks will no longer lend 100% of appraised value, so unless you have 50% or more cash equity in your home, refinancing is not an option. Save the $399 application/ appraisal fee that the lender charges before telling you that they cannot refinance your home. I can personally name 6 people off the top of my head who have wasted the $399- you probably can as well.
Fact #4– Unemployment figures for the last 6 months have been watered down and misrepresented due to the massive wave of hiring for the US Census. This temporary assignment will end soon and thousands of Americans will re-enter the ranks of unemployment, driving the figures back up. If there are 6 degrees of separation between you and any given person in America, and neither of us nor the people we know can think of a single business that is hiring, then logically we can conclude that there is not a big wave of hiring happening anytime soon.
Now that you have removed the rose colored glasses and taken a good hard look at reality, it is time to take action. Do not bury your head in the sand and hope that things will get better or take a swim down the river of denial and pretend that everything is fine. If you are in financial crisis or facing mounting credit card debt, everything is not fine and your situation can go from bad to worse quickly if you ignore it. The only way your financial situation will get better is if you take action and get help. Seek out a licensed bankruptcy/ debt settlement attorney or a legitimate non-profit agency to help you get back on the path to financial wellness and stability.

Leave a Comment


Contact Us

  • This field is for validation purposes and should be left unchanged.
Call (704) 543-2294 Skip to content