During the worldwide pandemic of 2020, more than 214,000 foreclosure cases were filed throughout the country. The alarming amount occurred in the shadow of a worldwide pandemic when the government was working to keep roofs over countless American’s heads.
Fast forward to today. Desperate homeowners continue to find ways to defend themselves against foreclosure proceedings. With many still “upside-down” in their loans, their focus has shifted to inherent flaws in the system that results in unethical to outright illegal behavior by lenders.
The ending of the federal moratorium on foreclosure when it comes to federally financed loans on July 31, 2021 created concern, if not a bit of chaos. As usual, the advantage continues to be with banks and lenders when it comes to lenders trying to avoid foreclosure of their homes.
A shifting dynamic
Recent courtroom victories by homeowners against banks are shifting that dynamic ever so slightly, providing them additional grounds to mount challenges to financial institutions. Every lawsuit seemingly peels back another layer in certain “strategies” used that are not only unethical, but also illegal when it comes to not only help with mortgages, but also loan modifications.
In the end, the best strategy for upside-down homeowners seems to be mortgage loan modifications. Simply put, they request a renegotiation of the mortgage terms to lower, more affordable payments. The option can take carious forms and include the following:
- Reducing monthly payment amounts
- Reducing or changing interest rates
- Reducing principal
- Reducing or removing late fees and penalties
Modifications can benefit both sides. Homeowners get the help they need and financial institutions have a chance to secure some of the loan back.