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Mortgage Modification Agreements: Beware the Bait and Switch
Posted by: Marlyn Wiener
May 23, 2008
Topic: Mortgage Modification Agreements
When the homeowners finally received the proposed loan modification agreement - it bore no relation to anything that had been discussed. The agreement did not modify the interest rate or payment terms of the loan at all nor did it require the lender to dismiss the foreclosure action. The agreement required that the homeowner make three consecutive, monthly payments (in the same amount of the monthly mortgage payment they had been unable to pay!!!) and that these payments would be used to pay the lender's legal fees. The agreement indicated that the loan would be reviewed at the end of the three months - but did not obligate the lender to modify the loan at that time.
Bottom line: this was not a mortgage modification but a poorly disguised ploy to get the lender's attorneys' fees paid. Just because a document is titled as a Mortgage Modification Agreement or a Loan Modification Agreement does not mean that it actually lives up to its name. It is critically important that homeowners attempting to modify their mortgage loans have an attorney review any proposed modification documents to ensure that a loan modification on the terms the homeowner is seeking really has been obtained.
