Have you been able to accumulate money in your bank account because you stopped paying your mortgage to get your lender’s attention? Some people I’ve come across recently have been told to give that money to friends or relatives. I’m told that consumers are being informed that the money can then be left off of a loan modification application.
The problem with this advice from a bankruptcy standpoint is that those transfers are made in fraud of creditors and recoverable by a bankruptcy trustee. If you are one of these people, you should know that bankruptcy is where you will likely end up.
Countless modification applicants end up in the office of a bankruptcy attorney on the eve of a foreclosure sale because SURPRISE, your modification was denied. And the money you transferred to your relative can not be exempted because it is no longer in your possession. Waiting to the last minute means the eventual bankruptcy problem will be full of surprises and problems.
So, if you think your loan mod professional is great and you have nothing to worry about because he’s giving you all this “expert” advice, consider thinking ahead about what the next step will be if your modification application is unsuccessful.
I highly recomend talking with a real estate attorney, rather than someone who is a “loan mod expert”. An attorney whom you have done business with, or know someone who has, will likely provide you the correct and best information. An attorney is going to be accountable for their actions, as opposed to someone who calls themself a loan mod expert.
In fact the FDIC warns about the loan modification companies and that help should be free.
James Mucci –
Michigan Refinancing Professional
Bankruptcy is a big hurdle to jump so make sure to take a good look at your finances before taking the plunge!
I also read that the IRS is jumping in the foreclosure game. I read that if a borrower that did a cash out refi, loses their home (whether they walk or not) they will get a nice big tax bill for any write off (income) from their lender. Man, people are getting hit from all sides. It’s a war out there and the little guy is losing.