The loan modification program sounded like an attractive idea.
Often times, lenders advised homeowners that they needed to fall a couple of payments behind on their home, that they needed to send in a little paperwork and that they would probably qualify for a home loan.
Then, the homeowner received a call back that they needed to send in a little more paperwork.
Then a week later, a little more paperwork. Then two weeks later, they were contacted to be advised that they qualified. Then, two days later a different representative from the same bank called to tell the home owner that their request was denied. Then a letter came in the mail three days later saying that the homeowner needed to send in another document or ten and they might qualify. Then, there was another letter sent advising that the foreclosure proceedings had begun.
The bottom line is that the “loan modification program” was a disgusting failure that hurt many families in this country. Thankfully, there is a fall back plan. Homeowners can file a Chapter 13 bankruptcy and save their homes by paying back the arrears through a 60 month Plan plus paying the regular monthly payments on their homes.