The housing crisis has just gotten even messier-if that is possible!We thought things were confusing before - with all the different banks enforcing different rules for distressed borrowers on loan modifications, foreclosures and repayment plans, but this new development is wreaking havoc on many different segments of the housing industry.
It seems that several of the big mortgage banks have not been following proper procedure when foreclosing on homes, and as a result the majority of states have ordered a halt to any further foreclosure proceedings until this can be investigated thoroughly.
The lenders currently affected are Chase, Bank of America and GMAC.
Although these 3 banks are among the largest mortgage holders in the country, it remains to be seen if other banks will follow suit.
It's a fairly serious legal matter to have your home foreclosed on and being forced to move out.
To make the situation even more stressful, many borrowers were actively in the process of loan modification when out of the blue they receive notice that they are getting kicked out.
How can it be that one department does not know what the other is doing?Homeowners have been screaming Foul! for months now, but no one was listening.
Those borrowers who have had their home foreclosed upon by Chase, Bank of America or GMAC may actually end up having recourse to get their home back, or at least have some leverage to benefit in some other way.
Those borrowers who are still in their home but are facing a foreclosure date, have been granted a reprieve as this mess is sorted out.
It would make sense that the banks will be much more cooperative with these homeowners and perhaps reconsider a loan modification to allow them to keep their home.
The fact is that even a reduced payment is more revenue for the lenders than no money at all.
What is the best way for a Chase, Bank of America or GMAC borrower to take advantage of this window of opportunity?It just makes sense to contact the bank and request re-consideration for a loan modification.
Even if the application had been denied before, the banks will be much more motivated to find a way to help the borrower now since foreclosure has been taken off the table as an option.
If you didn't qualify the first time, make certain that your application is completed correctly this time so that you can have the best chance of approval.