Loan modifications burn many homeowners- Lenders cancel trials; borrowers surprised

[Cass]

Source: McClatchy News Service

MINNEAPOLIS — Many people who sought help under a federal program created to keep them from losing their homes are instead saddled with huge, unexpected bills.

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Lenders routinely approved short-term “trial” loan modifications that reduced payments for desperate borrowers under the umbrella of the Obama administration’s Home Affordable Modification Program. But lenders continued to count the mortgages as delinquent or in default.

Now instead of granting permanent modifications, lenders often are reinstating the original loan terms and demanding big back payments.

Through November nationwide, lenders canceled 729,109 trial modifications. Carl Christensen, a Minneapolis real estate attorney, said he is getting 15 telephone calls a week from shocked borrowers.

Read more: http://www.news-press.com/article/20110130/RE/110129012/1076/Loan-modifications-burn-many-homeowners