Some clarifications. The problems I had with our lender regarding the loan modification had nothing to do with whether or not they were willing to make one. It was the way they behaved as we qualified for it and then the way that they screwed it up so that we have to re-qualify all over again. The short version is that we did everything to qualify, received a letter stating so, but due to a very confusing letter, sent them $40 less than they wanted (out of a $2,000+ payment) and they tossed out the whole thing without even telling us and demanded that we start the entire process over again, insisting, among other things, that they interpreted the check that was $40 short as a statement from us that we did not want the modification (ridiculous). They lied to by saying they had no choice because the loan owner would not allow them to make the modification, admitted that another division of their own company owns it, then tried to tell us that they could not disclose who owns it. And on and on.
There are good, solid reasons for the existence of the Truth in Lending Act and the Real Estate Settlement Procedures Act. Like many, many other people who have renegotiated their loans, I believe that our lender violated some parts of one or both of those laws. And I think they violated them in the process of the loan modification. There is no question that lenders have violated the law in many ways -- look at the foreclosure mess right now. The reason they have panicked and stopped foreclosures is because they realized that they took illegal shortcuts. I don't feel great about seeking a lower interest rate, but indeed I have threatened to walk away from the house if they continue to screw us around. They stand to lose a couple of hundred thousand dollars... which I could save us right now by walking away. Believe me, that is tempting. But I do think it would be unethical to do that unless they really treat us extremely unfairly. Nick
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