New Hardships Can Lead To Second Loan Mods
March 17th, 2011
While a distressed homeowner cannot necessarily use the Obama administration’s Home Affordable Modification Program (HAMP) more than once, many non-HAMP programs will consider a second loan modification if a homeowner can show a second hardship[1]. If a homeowner makes payments on a permanently modified mortgage in a timely fashion and then encounters another financial hardship, some lenders may offer an additional loan modification if the borrower can show documented evidence that he or she meets the qualifications – again – for a mortgage modification.
Of course, just as success stories regarding first loan modifications are hard to find, positive experiences with a second are also few and far between. As with many stories concerning first loan modifications, there are many cases where banks claim to be working on loan modifications, then sell the house out from under the distressed owner. In one case, Wells Fargo actually began refusing loan payments from the owner because the property in question had been sold to someone else at a foreclosure auction[2]. “We immediately corrected the situation” stated the lender, which reversed the sale and resumed loan modification efforts. Wells Fargo also stated that about 2/3 of their customers who fall more than 60 days behind on their payments find “an option that prevents foreclosure.”
Were you aware that you could get a second loan modification? Do you believe it?
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[1] http://www.loansafe.org/a-loan-modification-can-be-modified-again
[2] http://www.wtop.com/?nid=41&sid=2288551
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