FAST FACTS: Avoid Modification Relapse

It is critical that you follow up to be sure that the new “modified” mortgage which you have been successful in negotiating is duly recorded. A modified mortgage is intended to be a permanent change in the terms of your loan, but it is important that you not only negotiate for terms which are sustainable, but that you also take care that the agreement includes a provision for the lender to record the new mortgage in a timely fashion. Failure to do so could lead to a disastrous situation in the future when your loan is transferred to a new servicer. Your new servicer could refuse to acknowledge and/or abide by the terms of the “modification” and instead treat it as a temporary agreement between you and the servicer who completed the paperwork. Essentially they can say, "we must abide by the terms of the original note." There has been no subsequent mortgage recorded.

Avoid mortgage modification relapse by either:

1. requiring the lender to record the modification within a short timeframe after the agreement;
2. utilizing the services of an attorney or other professional who accepts responsibility for guaranteeing that the modified loan will be recorded
   

In either case, you must check YOURSELF to be sure that the mortgage has been reported to your local recorder’s office in a timely fashion (you could get transferred to another servicer any minute).

Don’t allow your lender to take advantage of you, AGAIN, by agreeing to a modification and then transferring you to another servicer who is legally obligated to follow the terms of the original instead of your modified loan.

Forewarned is forarmed—but only if you do what you need to do.
We’re trying to look out for you--help us out, DO YOUR PART.

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(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)