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Robo Signing Settlement Deters Loan Fraud

Last year Illinois, along with 48 other states, joined the U.S. Department of Justice in a $25 billion settlement agreement with five of the nation’s largest bank mortgage companies to remedy widespread “robo-signing” of documents for foreclosure and other fraudulent practices that banks used in servicing loans for homeowners. There are two main components of the settlement agreement:  to compensate to borrowers who lost homes in foreclosure or were risk of foreclosure, and to establish new national “servicing standards” to provide better assistance and protection to borrowers who fall behind on their mortgage payments.  Prior to the new standards, mortgage lenders employed unfair and inefficient services to customer which made it difficult for borrowers to comply with loan modification requirements.  Lawyers can assist you in finding solutions to stop foreclosure.

Is loan modification my best option?

Although the banks have managed to contribute millions of dollars toward the settlement, consumers still have complaints against servicing processes. In fact, according to Lisa Madigan, the Illinois Attorney General, 60% of homeowners seeking a loan modification still experience a frustrating process even after implementation of the new standards. For these reasons, and others, loan modification may not your best option when you are facing foreclosure.

Loan modifications offer homeowners the following assistance:

  • lower monthly payment
  • reduction in mortgage interest rate
  • elimination of fees
  • increase mortgage repayment time span

Through loan modification homeowners have a chance to stall foreclosure. However, a modification usually does not remedy most people's debt problems.  Usually people have other debts, such as credit cards or medical bills, which consume their income which make it difficult to keep up with their mortgage payments.  In that case, lenders are less inclined to agree to a loan modification.

You are most likely to succeed in obtaining a loan modification with legal assistance. An experienced attorney can aggressively protect your rights and negotiate loan modification terms that best suit you.

If you are faced with imminent foreclosure and you have complicated debt issues, think twice about a loan modification.  You may have other options that can keep your home out of foreclosure and reduce your debt. DebtStoppers, Bankruptcy Law Firm can thoroughly evaluate your financial and put you on the path toward financial freedom.

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