Vacant land has little value in Metro Detroit

With lending for construction almost non-existent greenfields that can be developed for single family residential have become virtually worthless.   The only reasonable approach would be to hold the land until lending practices ease or values increase dramatically.  That may be a possibility if you hold a single lot with a modest mortgage, but is challenging or impossible when you own hundreds of lots.  In those instances where you can't hold the property and service the loan, perhaps a loan modification is your best bet even if it is just to extend the term of the original loan - "pretend and extend" is not an uncommon practice for lenders - pretend the value is there and extend the term for repayment.  Although the loan may be inadequately secured, as long as the mortgagor continues to make payment, both parties have avoided having a loan slip into default.

Banks were quick to write and foreclose mortgages but slow to modify them.

All the usual players - Bank of America, Wells Fargo, GMAC and Litton Loan Servicing are implicated in this article which describes poorly trained and overwhelmed staff on both sides of the mortgage transaction resulting in bureaucracies that sloppily document a loan application and are challenging to work with for a loan modification.  I have been working with bank loss mitigation departments for 15 years and this has always been a problem, the only thing that has changed is the number of people experiencing the lack of concern and incompetence of these large companies. 

Loan servicing does not make any money for the banks and accordingly they do not devote sufficient resources to the needs of their customers.  Typical scenarios include overseas call centers with customer service representatives that can only read from a script to poor notes in a file to documents that are lost and files closed prematurely.  The result is a system that works slowly and poorly at a time when homeowners need it to work quickly and efficiently to keep their property out of foreclosure.  An attorney experienced in working with mortgage lenders may be able to help you obtain a loan modification that keeps you in your home.

The Federal Home Affordable program has options for borrowers who are current and in default of their mortgage loans.  It makes sense, however, to discuss the different options available so you can understand whether loan modification is either likely or, if obtained, will address your financial concerns. A loan modification my be a long or a short term solution to your situation, but is often is not the only approach for a stretched homeowner. 

Loan modification, in the long term, often provides only incremental or marginal relief for a homeowner.  If, because of a loss of income or new expenses your house is no longer affordable without significant payment reduction, it may be time to consider a short sale or other option before foreclosure is imminent. 

For my entire legal career I have counseled clients in danger of losing their homes and helped them identify pre- and post-foreclosure options that help them reach their goals.

Make your own loan modification by understanding the foreclosure process.

Many people, frustrated with the unwillingness of banks to process meaningful loan modifications are taking matters into their own hands.

http://www.nytimes.com/2010/06/01/business/01nopay.html?hp

Michigan allows for both foreclosure by judicial action and by advertisement. The vast majority of foreclosures are by advertisement, but even this expedited process allows homeowners to live in their homes for a significant period of time without making any payments to the banks. Different aspects of the process can be stretched out allowing you to maximize the amount of time until you have to move.

During this time, you can save the money you would otherwise have paid to your mortgage lender and get re-established. It is not uncommon for my clients to live in their homes for well over a year without making any payments. Of course there are consequences of doing so and this isn't something you should undertake lightly, but it is something I have been helping clients with for fifteen years. If you'd like to learn more contact my law office for an appointment.

Obama's Loan Modification Plan in Michigan

http://www.freep.com/article/20090305/NEWS06/903050383/Will+mortgage+plan+be+any+help+in+Michigan?

New federal legislation is beginning to come on line, but it's uncertain how much help this initial program will be. Most of my clients would not qualify for the program because they owe more than 105% of the value of the home.