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Friday
Jun252010

Marketing Campaigns Over Promised on Loan Modifications San Bernardino County, CA

How is it that all these companies sprang out of nowhere and are now responsible for processing loan modifications in San Bernardino County, CA?  Starting in 2008, they became an overnight sensation with marketing campaigns discussing the benefits of loan modifications San Bernardino County, CA.  The advertised benefits were astounding giving the impression that anyone could easily save thousands, or even hundreds of thousands of dollars just by signing up. But somehow, they didn’t emphasize enough that your final results may vary.  It seems they weren’t completely truthful, as a loan modification San Bernardino CA is only feasible under restricted conditions.

Marketing Campaigns for Loan Modifications San Bernardino County, CA

The loan modification San Bernardino County, CA ads practically guaranteed to have the late fees, back-interest, and penalties taken off your mortgage loan balance. These companies also indicated that the principal balance would likely be reduced so the property owner could more easily afford the property. Regrettably, this never took place for the majority of home owners.

Exactly why were there so many un-kept promises?  Many homeowners simply trusted them, but did not know that these organizations were formed almost overnight by attorneys, realtors, mortgage brokers, and others who were otherwise out of work when the real estate crisis began.

These homeowners had been struggling with their payments and were made to believe that everything would be alright.  Some had purchased a mountain cabin as a second home, while other had purchased a primary residence when prices were at their peak.  Many can no longer afford the payments due to an interest rate increase.  The clock was ticking as they moved closer to foreclosure, but these homeowners were burning up their time based on empty promises. 

Difficulties Negotiating Loan Modifications San Bernardino County

As time moved on, homeowners found themselves in a “no win” negotiation with their lender and were unable to move towards a satisfactorily resolution. The lenders answered the loan modifications requests in San Bernardino County, CA by offering trial loan modifications, placing the penalties, back-interest, and late fees on top of the unpaid loan balance.  Where are the financial benefits with this option?

Monthly payments were reduced somewhat in a number of cases by stretching the adjusted loan balance out 40 years.  According to the Fitch Rating Agency, who rates the banks, payments had gone up for a very large percentage of homeowner.  The average payment for all loan modification plans was very unaffordable, at 64% of the homeowner’s pre-tax income.  As a reminder, these were temporary modifications only.  In these cases, the lenders were collecting the monthly payments, but most never granted the permanent loan modifications in San Bernardino County, CA. 

The difficulty that homeowners and the lenders are facing is that property values in San Bernardino County, CA have fallen considerably, and that a disproportionate number of these properties are worth less than the mortgage debt.  This situation occurred because the banks had been making low interest easy-qualifying loans available for several years.  In response, housing prices had risen significantly because loan qualifying and affordability was determined based on the low introductory payments.  

Payments suddenly became unaffordable as automatic interest rate hikes kicked-in.  These conditions were created by the banks, not the homeowners, which brings us to a very important point: 

If the banks are not willing to agree to part of the losses, then why would someone who is struggling with these payments agree to bailout the bank by makings the extended payments for 40 years?  Homeowners have other viable options — they just need to better understand what they are!

 What many don't understand is that there are easier techniques to reduce their debts and dispose of this negative equity. For most homeowners, it could well be much easier to get a different house than to continue to over-pay for the home they are in now.

 

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