3 Reasons to Avoid Blind Loan Modificiation

Blind loan modification is a practice that more and more lenders are instituting every day. This does not necessarily make it a good thing. Blind loan modification is an automated offer that is generated by your mortgage lender with seemingly attractive terms. You receive a notice in the mail from your lender that says they are willing to offer you a great deal and all you have to do is agree to it. If you feel tempted to go for it, stop and consider these reasons to avoid it. 

1. Unsolicited Offers

The offer that your bank is sending you is an unsolicited offer from them. You did not ask for the offer and all of a sudden an offer is in your mailbox. Think about that for a moment. Why would the bank that already holds your mortgage send you another offer? Unless the new agreement is to their advantage and your disadvantage it would not make much sense. These offers are not good for you and they only help the bank. Consider the reason behind them trying to get you to change your terms.

2. Automatically Generated

A blind loan modification is an automated piece of paper that is spit out by their computer system. The computer automatically generated it and then it was sent to you. Most of the time, no one even looks at it before it gets to you. When you call up the bank to talk about it, no one will know what the offer was. They will tell you that the offer was automatically generated and they cannot answer your in-depth questions. They might know generally what you are talking about, but when it comes to specifics you will probably be on your own. They expect you to agree to a document that no one at their branch can talk to you intelligently about. 

3. Negative Terms

The terms that are sent to you in a blind loan modification are never to your advantage in the long run. While it might seem better at first glance, upon further review it actually is not. Have a loan modification attorney look at any documents that you receive and they can usually translate them for you. More often than not, you are agreeing to something that makes no sense on your part. It might be a smaller payment but it leaves you with a huge balloon payment at the end. Unless you need to avoid foreclosure, there is no reason to even think about agreeing to a blind loan modification.