Government Sponsered Loan Modification

[downhiller]

Im a veteran and I recently used my VA loan to purchase a house. Ive been getting these letters in the mail from various agencies and of course they sound too good to be true. But just in case, I thought I would throw it out to some others to see if they've investigated further or if they know the full story behind these letters.

The letters claims I qualify for a government sponsored loan modification program designed for people with high interest rates, upside down on their loan or had a reduction in income (none of which personally apply to me). They then give a new 30 year fixed mortgage amount based on a 2% interest rate. I locked in around 5%. Of course the new monthly payment looks appealing, but Ive been raised that if something sounds too good to be true, it probably is.

Can anyone out there shed some light on the subject? I read some information on the Internet and the program looks legit, but it seems like something more relevant for someone down and out. I don't want to take advantage of a program that isn't specifically designed to help someone in my situation. Especially if there are negative aspects to the loan (aside from what happens when you let the government bail you out).

Thanks for any help.

Downhiller

[jillayne]

Hi downhiller,

You mention that you recently purchased a home using your VA entitlement. Perhaps you went 100% LTV, zero down.

Through the public records systems, loan mod firms as well as other legitimate lenders have the capacity to purchase a marketing list and you're probably on the list because you might appear to have no equity in your home and that would make you a perfect target for the loan mod salesmen.

Lenders do loan modifications for free. There is no need to pay any third party any money.

However, you must meet the lenders qualifications first.

http://www.dfi.wa.gov/consumers/homeownership/

too good to be true, yes. Why would a lender be motivated to modify your loan if you just recently purchased and you're making your payments on time? The company who mailed you the letter is not your lender and they'd love to help you part with your money. Don't become a victim.

For more info google "loan mod scams" and read some of the FBI reports on these predators.

[downhiller]

Thanks for following up jillayne. I actually called one of the mailers up today and had a nice little chat. What was eventually disclosed is that these are 3/1 ARM loans. And while 100% LTV was available, I did not exercise that. However, I apparently did make it on some sort of VA mailing list regardless of how I decided to use my VA loan.

I could see that if someone was struggling to make my payments on time, It would seem like a short sighted chance to get back on track. But anything adjustable scares me anymore. But since Im not struggling (knock on wood), it feels good knowing I walked away from something potentially scandalous.

[jillayne]

Hi downhiller,

I'd love to take a look at that mailer. Would you mind faxing it to me?

425-673-1533 no cover sheet, Edmonds line.

Advertising that someone's payment will go lower....while selling an ARM product sounds like possible predatory lending or deceptive advertising. Use a sharpie to black out your personal identifying info.

Thank you! I'll return here and give you an update.

[downhiller]

Sure, I'll send you a few, I think I've received three of these in the past few weeks. All from varying lenders.

I dont have them on me today, but look for them tomorrow!

[jillayne]

Awesome! I'm so excited. I must have a very boring life. I have a small stack that I've saved from the subprime days and I use those in class to teach new LOs what NOT to do.