Discount Mortgage Relief: Why Your Trial Loan Modification Was Rejected
My clients have told me that it feels like they just got kicked in the stomach. After months of diligently making reduced payments, not only do they get a letter or phone call telling them that their trial modification has been rejected; but, they are also told that they now have an enormous past due balance that has just been reported to the credit bureaus! These people played by the rules, submitted their paperwork and diligently made all their payments. So, why was the trial loan modification rejected? In order to understand why their trial modification failed, homeowners need to understand what a loan modification means to a bank.
Is it possible to seek an exemption from this tax liability? Definitely. If you have received a settlement is a part of a bankruptcy proceeding, then you will enjoy a complete exemption. If you have become insolvent, you will enjoy exemption. If you qualify for relief under the discount mortgage relief Act, the amount that you have received as settlement will be waived and exempted.
When A Trial Isn't Really A Trial! Upon first hearing that they have "qualified" for a trial loan modification, struggling homeowners become elated. They are informed that they are well on their way to approval. Once all of the necessary paperwork is submitted and the affordable monthly payments made, they will be approved for a permanent modification allowing them to keep their home and make more reasonable payments for the remaining life of the loan. Little do they know that merely applying for the modification is the only qualification for trial modification approval. They have no idea that banks have created trial loan modifications for the sole purpose of collecting some money while borrowers navigate the loan mod process. That's right, after having millions of borrowers stop making payments, the banks put into place the trial modification payment program to induce people into making reduced payments and decreasing the amount of money the lenders were losing during the modification process. Making all the reduced payments is no guarantee of success whatsoever. Your lender still underwrites your modification the exact same way they always have. As disingenuous as it is, it's pretty smart when you think about it!
You may have successfully brought your credit card debt down to zero but you may end up paying a huge amount as tax along with penalty to the government. This may push you into a financial crisis again. Hence, make use of the right solution to plan your tax properly so that you are completely free of legal complications. If you are not in a position to pay tax today, you should plan your tax so that you can manage the liability without violating any law. There are specific professional organizations that provide advice and assistance in this regard. You cannot go in for a very expensive solution because the debt is only going to push you further into crisis.
The Short Sale Solution. I know you want to keep your house. You wouldn't have applied for the loan modification if you didn't have a sincere interest in trying to remain in your home. Unfortunately, it may not be in the cards. Realistically, your lender isn't going to reduce the balance of your mortgage. With that in mind, even if you are approved for a loan modification, you are going have to agree to pay way too much for your house all over again. Why are you so ready to repeat the same mistake just because you may get more attractive financing? Wouldn't you be much better off selling your home for less than the loan balance, renting for a couple of years and buying something in the same neighborhood at a huge discount? With all of the new programs, including HAFA, designed to assist homeowners in getting their home sold for less than their loan balance, it doesn't make much sense for most homeowners to even attempt a loan modification, much less follow through! Do some research on short sales, find a certified specialist and get that giant mortgage monkey off your back!
Is it possible to seek an exemption from this tax liability? Definitely. If you have received a settlement is a part of a bankruptcy proceeding, then you will enjoy a complete exemption. If you have become insolvent, you will enjoy exemption. If you qualify for relief under the discount mortgage relief Act, the amount that you have received as settlement will be waived and exempted.
When A Trial Isn't Really A Trial! Upon first hearing that they have "qualified" for a trial loan modification, struggling homeowners become elated. They are informed that they are well on their way to approval. Once all of the necessary paperwork is submitted and the affordable monthly payments made, they will be approved for a permanent modification allowing them to keep their home and make more reasonable payments for the remaining life of the loan. Little do they know that merely applying for the modification is the only qualification for trial modification approval. They have no idea that banks have created trial loan modifications for the sole purpose of collecting some money while borrowers navigate the loan mod process. That's right, after having millions of borrowers stop making payments, the banks put into place the trial modification payment program to induce people into making reduced payments and decreasing the amount of money the lenders were losing during the modification process. Making all the reduced payments is no guarantee of success whatsoever. Your lender still underwrites your modification the exact same way they always have. As disingenuous as it is, it's pretty smart when you think about it!
You may have successfully brought your credit card debt down to zero but you may end up paying a huge amount as tax along with penalty to the government. This may push you into a financial crisis again. Hence, make use of the right solution to plan your tax properly so that you are completely free of legal complications. If you are not in a position to pay tax today, you should plan your tax so that you can manage the liability without violating any law. There are specific professional organizations that provide advice and assistance in this regard. You cannot go in for a very expensive solution because the debt is only going to push you further into crisis.
The Short Sale Solution. I know you want to keep your house. You wouldn't have applied for the loan modification if you didn't have a sincere interest in trying to remain in your home. Unfortunately, it may not be in the cards. Realistically, your lender isn't going to reduce the balance of your mortgage. With that in mind, even if you are approved for a loan modification, you are going have to agree to pay way too much for your house all over again. Why are you so ready to repeat the same mistake just because you may get more attractive financing? Wouldn't you be much better off selling your home for less than the loan balance, renting for a couple of years and buying something in the same neighborhood at a huge discount? With all of the new programs, including HAFA, designed to assist homeowners in getting their home sold for less than their loan balance, it doesn't make much sense for most homeowners to even attempt a loan modification, much less follow through! Do some research on short sales, find a certified specialist and get that giant mortgage monkey off your back!
posted by Vittoria @ July 27, 2011
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