Hi, it’s Derik Lewis from Lawersrealtygroup.com, where We’re Southern California’s leading short sale team. I had somebody ask me about a line in one of the letters that I send out stating that, "trial payments are a bank tactic."
When you apply for a loan modification, they ask you some general questions and they will tell you they’ll send you the documents needed. They pretty much tell that to everybody unless you tell them you are unemployed and then they probably stop the process right there. If you’re anywhere in the range of qualifying for a loan mod, they are forced to send you all of the documents and talk you through it.
Now the servicers have an incentive to tell you they will get you into a trial payment plan or trial loan mod plan. I think they are picking numbers from the sky because someone had a $4,500 mortgage payment and they gave them about a $2,200 trial mod payment. I ran all the numbers and there’s no way in a real loan modification, they were going to get them to a $2200 permanent payment. So the trial payment is just a method to get you to send them something while they take what is supposed to be 3 months but turns into 9 months and 12 months evaluating your loan modification. Now it’s my skeptical view that the servicers are collecting these payments and take their fee first and then they send the balance towards the payment.
There have been questions about how these payments are getting credited. Most people after 6 or 9 months will receive a debt validation notice that says oh by the way, you’re $57,000 behind and pay up. All this occurs while they have not been denied for the loan mod yet.
It’s my view right now that they will put anybody into a trial modification in order to get the payments to start coming to the servicer and they can peel off their fees. This is what I think is going on, but it’s not to say there aren’t some valid trial mod payments out there that are available and you might get a loan mod approved. I just think you need to be suspicious about it and you can use the resources on our website, lawyersrealtygroup.com to run your own analysis.
It will be automated soon, but right now you have to plug in the data and send it to me and I run the numbers and tell you if you’re anywhere in the ball park. I would be suspicious when you get thrown into a trial payment plan immediately. Visit our website for more information at lawyersrealtygroup.com, where we’re Southern California’s leading short sale team. Just remember your lender has a lawyer and you should too.