Mortgage Loan Modifications: What Every Connecticut Homeowner/Borrower Entering this Process Should
Foreclosures continue to increase at a rapid pace both nationwide and in the State of Connecticut. Many borrowers seek to save their homes by requesting loan modifications from their mortgage lenders. There are also many unlicensed and unscrupulous mortgage rescue/mortgage modification companies that take $2,000.00 to $4,000.00 in upfront fees to supposedly obtain mortgage modifications for these borrowers. The bottom line is that these companies charge high fees and provide minimal and misleading services to borrowers. I had clients recently who nearly lost their home due to the bad advice and services provided by one of these unlicensed out of state companies. They were first told to default on their two mortgages in order to obtain modifications. The advice and paperwork they received made it seem that a workable modification was a forgone conclusion upon delivery of the requested documents to the lenders. They were misled to believe this company had attorneys protecting their interests in their foreclosure action. The actual result was despite providing all the documents requested including copies of all foreclosure pleadings the foreclosure went to judgment and the law day passed, i.e. the homeowners lost their chance to pay the mortgage debt and title passed to the lender. When they called the modification company they were given the run around and told that essentially they were out luck.
This horror story is not unique unfortunately. It is happening all over this state and country where these scam artists' misleading advertisements trap unwary borrowers who just want to save their homes. In the case above my clients did come to me in time to save their home since four months had not yet passed since their foreclosure judgment was entered. I was able to help them obtain a mortgage modification from FreddieMac and the judgment was reopened and voided. My clients made the right decision to contact me when they did, however, they were very lucky under the circumstances and the best advice I can give to any Connecticut borrower contemplating pursuing a mortgage modification is to first speak to an experienced Connecticut lawyer like myself to protect their interests in the process. Especially since we now have in this State a mortgage mediation program administered by the Connecticut Superior court where every residential homeowner in foreclosure is given the right to request court monitored foreclosure mediation.
Also as of September 1, 2010 every lender must now certify in every residential foreclosure prior to obtaining judgment that the borrower/homeowner was offered the option to apply for a loan modification and if they did, but did not qualify the reason for their failure to qualify. Mortgage Modification companies do not advise clients of these rights and without a local attorney to file an appearance in the foreclosure action and help homeowners negotiate the foreclosure/mediation process homeowners can lose their homes when they may have a chance to save them.