Mortgage Modification: Watch Out for Bad Terms in Fine Print

12 Sep Mortgage Modification: Watch Out for Bad Terms in Fine Print

Read those loan modification documents! All the fine print, every page. Take your time and make sure you understand exactly the terms of the modified loan. Watch out for bad terms in the fine print.

Clients Joe and Mary were shocked to learn recently that the loan modification they had succeeded in getting was not the victory they thought. Oh, yes, the interest rate was lowered from 12% to 6% and their home mortgage payments dropped to an affordable amount. BUT, what they didn’t know was that the change was for one year only.

What they didn’t know was the interest would increase to 14% after one year for the rest of the loan. This change raised their payments over $300 per month and DOUBLED the total payback on the loan. What a deal that loan modification was!

Now Joe and Mary have a big decision to make. They are stuck with a terrible loan. Do they walk away from their home?

The moral of the story is the devil is in the details! Read those loan documents, every last word!
 

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Jill Michaux has helped Kansas consumers with debt problems for three decades. She and her partner, Mark Neis, are Topeka's only bankruptcy specialists, board certified in consumer bankruptcy law by the American Board of Certification. She help start the National Association of Consumer Bankruptcy Attorneys.
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