October 20, 2023

what will your loan mod really cost

Is your lender offering you a loan workout to help lower your payment, or bring the loan current? Forbearance, loan modifications and HUD partial claims are all considered loan workouts to help you stay in your home.

But what's the real cost of these loan workouts?
The answer is usually ALL YOUR EQUITY.

That's right! Unfortunately there really are no free rides, and no your lender doesn't care about helping you. The only thing your lender cares about is money, and loan workouts are nothing more than a huge profit machine for banks. If you're considering taking the lender up on their offer, make sure to read the fine print carefully. In working short sales for almost 2 decades, not a single homeowner has ever expected to owe back us much they ultimately did from taking a loan modification, forbearance or partial claim:

The pay off says $49K but the loan was only about $15k


I am selling my house, but just found there is a HUD lien. The pay off says $49K but the loan was only about $15k. I know we do not owe $49K!! What can we do? Our lender was Bank of America and they sold it to Carrington Mortgage. Please help. Thanks!! 

I owe $48K for $6800 they paid during the modification


I sold my home in 2019. I did a modification back in 2015 that I totally forgot about. My mistake. The title company did not pay this nor did they find it in the search so they say. Well I had more than enough to cover the balance but I payed off all of my other bills I had not realizing this was out here at the time. I didn’t get a notification from HUD until Feb 2020 that I owe $48K for $6800 they paid during the modification. Well now I do not have the funds. Can Ch.13 help with paying this back and prevent another 2% interest and penalties each year? 

Her standalone lien after using the Covid Relief program amounted to 12 months of arrearages which amounted to $14,000 and her standalone payment in full amounted to $44,000? 


I am writing because I am surprised the stand alone liens and partial claim payments are considered legal, and not real estate "Usury". Do you have a calculation table that explains the percentage rate on loan balance principal that are means of calculating the additional interest paid along with the arrearages that amount to the total balance on the said strand alone liens? I am confused as to how these amounts are derived, and would like the government tables used to calculate the loan amounts. Plus, how can thirty years of interest be applied on a loan that is possibly paid in full at time of sale early (say 12 months), and no refund on those additional years of interest are refunded by HUD? I am asking on behalf of a family member who just got surprised at her home sale following death of husband, and found out she had a stand alone lien she did not know about that had 18 months of arrearages on a home with approx. $152, 000 principal balance on loan and her standalone lien after using the Covid Relief program amounted to 12 months of arrearages which amounted to $14,000 and her standalone payment in full amounted to $44,000? You think a program was designed to help you, was not thoroughly explained, and you come to find out it costs you $33,000 to be allowed 12 months of forbearance that costs $33,000? How does our government respond to that? That is not HELP!!! If this relative had not had quite a bit of equity in her home, she would have been forced into a short sale predicament. At time of sale, neither her realtor nor the title company knew what this loan was (it had same loan number as her original mortgage). How can you be charged interest like that and it not be considered Usury? Why doesn't HUD respond to her when she requests a refund on the 28 1/2 years of interest she paid on a time frame of 18 months? Can you provide an answer or have the table the government uses to derive these loan amounts? Please respond and send if you do. She would love to know if there are class action lawsuits that are now being instigated against this loan fraud practice, too. Hoping to hear back from you. Molly

Our pay off says 45K but the loan taken out was only 19k


What ended up happening, I just found this out as well, our pay off says 45K but the loan taken out was only 19k. I Know we do not owe 45k!!!!

should i modify my loan
Before signing any documents, find out what the ultimate price of your workout will be. The answer may surprise you! 

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Last Updated on October 20, 2023 by Minna Reid

About the author 

Minna Reid

Minna Reid is The Broker - Owner of Reid Real Estate Group. Reid Real Estate Group is a full-service Connecticut residential real estate brokerage, specializing in helping homeowners with legal and financial challenges including short sales, probate sales and tax lien complications.

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