5 Reasons Not To Go For A Mortgage Modification

A Wise Bread story gives five reasons a government-backed Home Affordable Modification Program (HAMP)
may not be a bright move.

Here are the top two reasons listed in the post:

1. The “permanent” modification is not so permanent.

Those who are getting “permanent” modifications are actually getting an adjustable loan with a five year period of low interest. This was spelled out in the original program, so it is not very accurate to say that these modifications are permanent. It may be helpful to those who are confident that they can pay the readjusted terms in five years, but those who are applying should be aware that this modification may just delay an eventual foreclosure.

2. Money spent on trial modifications could be used elsewhere.

Many consumers are reporting that they are paying for trial modifications for many months and then face a denial of the modification. In these cases they would have been better off to just save the money while waiting for the bank to foreclose. Currently banks are very slow to foreclose and those who simply default end up saving a good chunk of change.

If you’ve applied for a HAMP or some other mortgage modification, let us know how it’s worked out for you.

5 Reasons Not to Apply for a Loan Modification in the Home Affordable Modification Program (HAMP) [Wise Bread]