Banks Use Bait and Switch Loan Modifications to Secure Juicy Foreclosures

Millions of Americans will be stuffing themselves today, some of them believing the loan modifications they obtained from their banks have saved them from foreclosure.

As  previously disclosed in an early post No Trick or Treat!  Foreclosuregate is Scary as Hell, loan modifications are nothing more than a device banks use to secure a pending foreclosure.  If banks see a property has a great amount of equity they'll go for it like a juicy Thanksgiving turkey, no matter who lives in it.  It's my understanding that the requirements of some of these loan modification vehicles are that the home owner default by making two late payments enabling a loophole for the banks to abuse. That's the clincher.

As reported today by www.SFGate.com in an article, Family Face Foreclosure After Following the Rules, a family with disabled members has been foreclosed who followed the rules of their loan modification.  The family has a 22 year old autistic daughter, an 86 year old father, and they say they will be homeless on December 29th. 

They made 11 trial payments on time, sent in paperwork as requested and stayed in close touch with Citi. So it came as a rude shock when they received the foreclosure notice on the San Rafael home they've owned for 15 years.  "We were so sure we could keep it and that they were really working with us, I just feel blindsided," Susan Gerke said.

The oddist thing about this story is how CitiBank was clearly out to steal the house with various brutal methods:

In fact, their attorney, Marilyn Sullivan, said the couple are being penalized for that equity. "Citibank gave them a HAMP loan modification and took it away from them - because the house is worth more than the loan, so Citi will financially benefit from foreclosure," she said. 

The SFGate story supports my earlier post that loan modifications are being used widely by banks as a precursor device to foreclose on properties.  People who think the banks aren't wanting to take homes because there's too many of them, are wrong.  For the naive, this is a wake-up call that banks are predatory!

Their story mirrors those of thousands of other homeowners who've been denied long-term relief under the government's Home Affordable Modification Program. The pace of conversion from trial plans to permanent modifications has slowed dramatically, dropping from about 55,000 a month early this year to just 28,000 in September, government records show. - Family Faces Foreclosure After Following the Rules

So much for the government's Home Affordable Modification Program!  As a loan signing agent, I've been doing loan refinances only.  If I'm ever asked to help with a loan modification, I would turn it down.

A few of my other related posts:

Banks Foreclosure Fraud - Whoops You Caught Me!

The Horror of Major Banks Masquerading to Foreclose Homes as Tax Lien Collectors 

Robo Signers Revive Memories of Gigantor the Space Age Robot