Homeowners say Loan Modifications Lead to Foreclosure

In October 2008, the US Senate’s $700 billion Wall Street rescue package reaffirmed homeowners’ faith in mortgage lenders and banks, and many homeowners applied for trial loan modification programs. Today, a large number o f these same homeowners are blaming banks for unfair foreclosure practices. Class-action status lawsuits are currently being filed in many states including California, Kentucky, and Massachusetts.

Federal officials have said that some homeowners were offered trial modifications even though they do not qualify for permanent loans. Homeowners argue that banks are breaching their contracts by not keeping the trial modifications permanent, and that despite making timely payments, their properties are still being unfairly foreclosed upon. Banks argue that they are helping owners as much as possible. With so many conflicting arguments, it is difficult to determine where the blame lies. In these situations, it is very possible that lenders took advantage of homeowners’ trust in the government funds.

A loan modification is an agreement between the homeowner and the bank in which the bank agrees to modify mortgage terms so that the homeowners can afford monthly payments easier. Loan modifications involve many complexities and are unique to each homeowner’s situation. It is necessary to seek legal advice when considering mortgage modifications as a possible option. When properly executed, a loan modification will benefit the homeowner and provide some type of financial relief to the homeowner and prevent property foreclosure.

On the other hand, loan modifications often include changing the interest rate and extending the duration of the loan. Some lenders take advantage of this practice and advertise a lower introductory interest rate and implement outrageously high interest rates for the majority of the loan. A good attorney will be able to point out these schemes and ensure that the loan modification will benefit the homeowner.

About Sagaria Law, P.C.
Sagaria Law, a Professional Corporation, specializes in Family Law, Bankruptcy and Estate Planning throughout all of California. Over the past 9 years, we have successfully completed over 1500 family law cases in all family law areas. Further, we have successfully completed over 5000 bankruptcy petitions. Our Bankruptcy Lawyers are committed to providing you with the skill and expertise necessary to meet all of your Chapter 7, Chapter 13 and Chapter 11 Bankruptcy needs. We are dedicated to provide our clients with meaningful, real time solutions and information to individuals in need of legal advice and fresh perspective. We believe that knowledge is power and it is our promise to inform, assist and guide you. If you have questions or need assistance, please do not hesitate to contact us or visit our website at www.sagarialaw.com and we will be happy to assist you in any way.

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This release was published on openPR.