Loan Modification Fix

Not long ago I decided that following the home loan modification (as discussed at loan modificationfix.com) plan of Obama’s could be a good barometer on how well his Administration is doing on all fronts. The term itself has quickly become an Administration staple, for bettor or worse, much like ‘war on terror’ was associated with George W. Bush.

If the news is any indicator, things are not going too smoothly. It turns out that there are sharks, people who have took off their predatory lending masks and revealed the evil that is show through loan modifications. In fact, it is hard to find a loan modification article where the title does not include the word ’scam’ at some point.

Amidst all of the allegations and lawsuits though lies a reassuring fact; they aren’t getting away with it this time. At least, they are not getting away with it like before.

The Federal Trade Commission and states nationwide are hitting the loan modification businesses and foreclosure princes riding in on their chariot horse where it counts, the pocketbook.

The state of Washington Attorney General Tob McKenna has this to say, “Housing Crisis 2.0 has launched an attack on financially strapped homeowners,” McKenna said. “With so many borrowers looking for an opportunity to refinance or modify their loan terms, it’s not surprising that we’ve seen a new crop of deceptive business practices and operators looking to make an easy buck.”

Is this a case where a few bad apples spoil the bunch? In a word, yes, and in relation to the subprime mortgage debacle (as it was happening, not after) the negative press is bordering on insane. Although, it is needed, a reasonable fear can now be stated that the bad press could be hurting those who really need a home loan modification but are afraid to do so.

In all, prosecutors nationwide filed 189 legal actions last Wednesday against loan modification “helpers” accused of milking desperate (some of have already proven to be gullible) homeowners who want to make mortgage payments affordable. 23 states in all are getting in on the fun.

While the ‘189′ number is quite daunting, it does not accurately reflect the thousands of consultants who are doing things the right way. It also does not reflect the thousands of 200,000+ homeowners who have thus far participated in the affordable mortgage restructuring fun. But it does reflect an mortgage industry that will never rid itself of scum.

So maybe all of this does not actually mean incompetence by the Obama Administration. Maybe they are simply leveraging the media to help desperate homeowners realize what though too-soon have forgotten; that sharks patrol these water and without appropriate research and caution, they will take advantage.

I suppose for the victims the new saying would go something like this:

If you fool me once on with my original homeloan shame on you. If you fool me again when trying to restructure shame on you again.

Personal responsibility seems void. The Obama plan is meant to bail out homeowners who have gotten themselves in a pickle but it can’t save the kids who won’t stop repeating past mistakes. They can’t continue to bail out the folks who got themselves in trouble to begin with and eventually the people, who knew how to borrow to begin with, won’t put up with the bailouts any longer. Sure, foreclosure is the worst possible ending but a life void of personal responsibility is the worst type to try and save.