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Housing Frustrations

I have received so many e-mails about mortgage modification, I don't even know where to start. When I read these questions and comments, I want to remind every moralist that there are real people who are struggling to do the right thing.

Here's one example from Dave:

I have been turned down twice for loan mods because my lender keeps telling me that my financials are not right. My income is $1100.00 less then my bills all together. I just don't understand this. If I could make my bills every month, then I wouldn't need a loan mod. This is sooooo aggravating. To top it all off this loan is also a predator loan. The lender said that if my income increased by $1100 a month they would consider my approval. Is this a proper procedure?

Sadly, lenders aren't required to think in the modification process, but instead rely on a formula that either qualifies under the program or not. The new incarnation of the modification plan may help, so the best you can do is keep at it.

This came in from Tracy, who is self-employed:

We bought our house in August of 2007. The only loan we could [get] was a 20 year balloon because of being self employed. My husband and I both work construction. Our loan is through a small community bank that took no government buy outs. In April of 2009 the bank refinanced our home at a lower interest rate but still on a 20 year balloon. Our credit is really taking a hit because we have had no work and we got a letter in the mail today saying that we have to be caught up in ten days or the bank will start foreclosure on our house. We are currently 3 months behind. I have been so depressed and I just don't know what to do. I saw you on the CBS Early Show talking about the new modification but I don't know if we can do it.
Tracy, it's time to contact your bank again, because you may find that you qualify for loan modification. That said, I'm not sure whether or not you have any equity in the home--my guess is no, but if you do, perhaps selling and renting would be preferable to owning, especially until your work situation is more secure.

Ana asks:

I am in the process of applying for loan modification. The thing is, my husband and I need to purchase a 2nd vehicle. If I wait for my loan mod to be approved, my credit score will go down but if I purchase a car now, my loan mod might get denied given it seems lenders will do everything possible to make it harder for people to "qualify" for their home loan modification program. Our current car is not equipped for a car seat and I am having a baby soon.
This one's easy--loan modification first--everything else should follow...

Michael has a peculiar situation:

Hopefully you can point me in the right direction. My house is located is a certified designated cancer cluster. The County Health Department has concluded that you are at risk of developing juvenile brain cancer if you live in the area. As such, I have watch the value of my home drop from $409K to under $100K in less then 6 months. I can't live in the house with a 8 year old girl and a 5 year old boy, and my wife is pregnant. I have tried to rent the house out but due to the media stigma, I cant find a renter. I cant short sale the house because I have a second mortgage and the second lender will not work with me. My primary mortgage is with Chase and they have worked with me as they have put me in a modification but they doesn't help the cancer issue. My question is, do I have any recourse with the lender (I am in foreclosure with Chase) given that the house is in a designated health risk area? This is the only reason why I am slowly walking away from the house.
This is one for a lawyer, but I'm worried that because the house was designated after you purchased it, there may be no recourse. I would suggest that you band together with other homeowners in the area to determine if an attorney could help.

In the complaint department, JoAnn says that while her bank is raking in profits, "they are stalling" on her short sale, "in hopes of getting more $$$". Patrick notes that the "modification program is for those who are literally at death's door in terms of financing...sort of like the doctor who tells his patient they are about to die so they need to just give up".

I don't have words of wisdom to make this better, except to say that I will keep trying to shine a light on the mess and answer your questions.

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