Georgia is currently confronting the problem of foreclosed homes since 2007. It happened when the number of released mortgages reached its apogee. While the bank approved loans too easily, without doing severe verifications, they didn’t foresee this problem. On the other hand, the clients were so happy about getting what they want—the loan—without even thinking on how they are going to handle the monthly rates. After sometime, it showed that it is too big for their financial possibilities.
Everything seemed perfect at first: bank concluded new contracts everyday and everyone got a mortgage, but little did they know that the problems will surface in a short time. The debtors lack the necessary skills of saving money or they just simply faced big financial problems that they choose to default on their loans. The result was that the banks intended foreclosure processes depriving the mortgagors from their owner’s right. Moreover, a problem in this system arises: What would a bank do with these many proprieties in its possession where in fact, the banks need currency and not material things to function. Foreclosed houses are for sale, but the market is overcrowded with it. Adding to that is the decreasing number of interested buyers. This awful situation looks to be inescapable until last year.
The government proposed a way to solve the problem and that law enables the right of a debtor to ask for loan modification especially if he feels that he can’t deal with the present terms in the contract. You have to ensure that you fulfil all the necessary requirements of the bank before requesting for a loan modification. Proofs of all of your past expenses and earnings are needed here, so make sure that you have all the necessary documents. It can come to a decision whether the requested modification will be accepted or not. If you are able to prove that your income isn’t sufficient to cover the monthly rates and daily expenses, you will enter the re-negotiations with the lender for a suitable contract. The length of a loan modification process can differ, depending on the accessibility of the bank that will make you a good offer. If you want experts to help you along the collaboration process, you can look for companies that specialize in this kind of issue.
The loan modification system solved some of the economical problems in Georgia. Until now, about 10,000 owners have re-possessed their lost homes and are continuing the collaboration with the lender, rather than applying for a new mortgage.
Mortgage Bankers Association of Georgia
Atlanta Legal Aid Society – Home Defense Program
Georgia Legal Services Program, Inc. (GLSP)
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