Why Loan Modifications Often Fail

by Kelly Troy on June 11th, 2010

Upside-Down MortgagesIf you are a homeowner who has ever tried to obtain an often-touted ‘loan modification’ in order to stay in your home, or if you are an investor who specializes in working with homeowners to obtain these modifications, you already know that the chances of ever obtaining this change in loan terms is slim at best and the process itself is tedious and borders on asinine.  The video below is only going to make things worse. 

As if things weren’t already difficult enough, it seems our government has once again added even more insult to injury and has made it even harder to complete a loan-modification transaction – especially when dealing with any current or previous IndyMac loan. Whether through intentional deceit or sheer incompetence on the part of the FDIC, these loans are now de-facto insured by the U.S. Government – even if they weren’t originally written that way or originated in a government-insured program.  Many banks (especially IndyMac and OneWest Bank), as the video will show, have no interest in approving these modifications – because they actually make more money on the short sale itself than on the client actually maintaining and paying of his or her mortgage.  This defies common financial sense, but because of the ‘deal’ given to these banks for underperforming mortgage assets by the FDIC, they simply can’t lose.  This does a huge disservice to the struggling homeowner trying to keep his or her home and creates many unintended consequences for almost all parties involved.

 

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Kelly Troy

ABOUT THE AUTHOR: Kelly Troy is founder and President of InsuranceForInvestors.com as well as an active real estate investor himself, purchasing and ‘rehabbing’ both residential and commercial properties and actively engaging in non-traditional investing throughout the United States. As the founder of “STREETSMARTinvesting” as well as the developer of the “Riches in Rehabs” and “Riches in Rentals” investor programs; he has traveled extensively to host workshops and impart to other investors and real estate professionals the same principals and skills that he himself has learned regarding how to successfully profit from purchasing real estate. Kelly also established his own successful real-estate investor’s group and he is a frequent guest speaker at other REI groups and he often hosts local investing workshops in addition to teaching TREC-approved MCE courses for licensed real estate professionals. Kelly is also a combat veteran of the United States Army Infantry as well as an active member of his community, serving on several City and Regulatory Boards and having either Chaired or actively served on the Board of Directors for many professional and community organizations. In addition, after having spent several years as a traditional mortgage lender, he founded his own private-lending firm, Genesis Funding Solutions, and he was a hard-money lender underwriting and managing private loans to investors for projects of all types across the country. He is also extremely well-versed in all forms of seller-financing and in brokering privately-held mortgage notes. Prior to his investing career, Kelly was also a professional safety and risk consultant having developed many safety and risk management programs in various industries and he traveled frequently developing and implementing industrial and manufacturing processes, safety, and quality assurance programs throughout both the United States and Europe. He also worked for the Texas Worker’s Compensation Commission (TWCC) as well as the OSHA Consultation Program (OSHCON) as an Industrial Hygienist and he is; therefore, extremely familiar with risk management and loss mitigation, personal liability, worker’s compensation, and commercial risks. While having owned a previous agency with Farmer’s Insurance Group, he was chosen from over 150 agents as the President of the graduating class at the University of Farmers in Los Angeles, California and he was later recognized as one of the Top 25 commercial agents in Texas.

This entry was posted on Friday, June 11th, 2010 at 7:31 am and is filed under Legal Topics, Miscellaneous, Mortgage Issues. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

One Response to “Why Loan Modifications Often Fail”

  1. Angelique Oliver says:
    June 13, 2010 at 4:51 am

    Thank-you so much for the blog. I wanted to let you know that it was very insightful. I would love to talk to you either on the phone or during a meeting. Please contact me at my email address < Address Made Private By InsForInv Moderator >

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