One thing that you have to remember is during the trial period you must make all of your payments on time. This is a standard condition of the trial period, else they will deny your request for a Mortgage Modification and you may find yourself in foreclosure soon.
These types of temporary Loan Adjustment programs are all a little different depending on the bank and what state you are in. So I will provide a few more tips for those that are being offered such programs and these are general guidelines only.
One of the key expectations is the homeowner will receive upfront trail Note Modification paperwork directly from the bank outlining all the terms before ever making a trial payment. You will need to sign the trial papers and send that plus the first trial payment back to the bank.
While the trial period is moving forward, the mortgage company will fully evaluate your Mortgage Workout package to determine if you qualify. If you are working with an Attorney, the full Note Restructuring package would have been submitted to the note holder prior to the trial period. In these cases, the reputable Attorneys already know you will qualify and it is a matter of giving the financial institution time to evaluate everything.
For the most part, I think these trial periods are more of a stall tactic for the lender to get money from the TARP funds immediately instead of waiting for the permanent Mortgage Adjustment program. Remember the permanent program terms take 60 to 90 days, and the trial period begins soon after discussions with the financial institution. This gives the mortgage company money upfront and more time to stall and commit to a Note Modification. Of course, the lender are working in their best interest and not the homeowners.
If you have tried a Loan Restructuring on your own, usually the bank takes that information over the phone and later offers the trial Note Workout. If this is the case, the process above is not always followed. In most cases, the mortgage company have verbally qualified you bases on a phone conversation or partial paperwork sent over by the homeowner. I would be very leery of any verbal commitments by the mortgage bank, “buyers beware”.
Many times the homeowner never receives the upfront trial Loan Restructuring paperwork and is only going on a verbal by someone in the bank. Then after the trial period, they never receive any Note Workout documents and find their home being foreclosed on. This happens sometimes in part because the financial institution verbal qualifications did not match up with the paperwork sent over by the homeowner during the trial period.
Unfortunately, the banks are taking advantage of homeowners in this situation, in part because homeowners just don’t know what to expect or even demand. So, if this is happening to you, you know now what to ask for, and that is upfront trial Loan Modification papers and final permanent papers.
If you are not getting these papers as described, then I say buyer beware. You can contact a Mortgage Modification Attorney at that point or just ride it out and see what happens. Just a quick note on the Loan Adjustment Attorney, the reputable ones are almost 100% successful with permanent workout programs after the trial period, so feel confident that you’re in good hands.
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