what is a home equity loan

It has been stated in a variety of newspapers over the past few years that the fees added on to foreclosure are very profitable to the lender. There have been thousands upon thousands of complaints from homeowners where they have suffered for months waiting for loan mods. Often when they started their request to receive a loan mod, they were not even in foreclosure. Yet by the time the lender finally got their loan modification completed, they were in foreclosure and had to pay off as a part of the loan mod agreement all the foreclosure fees as well as many other fees. Lenders have scammed thousands of people who never needed to be in foreclosure out of dollars now mounting in the millions.

Today, many homeowners contact Tila Solutions looking for a solution to get their lender to stop disqualifying them and stop the foreclosure process on them. Through the use of Forensic Loan Audits, Tila Solutions has been very instrumental in helping these homeowners. You can find out more about Forensic Loan audits and predatory loans at tila-now.com.

Even so, there are thousands of people who do not understand how lenders make money off the foreclosure process. Here is an excerpt from a FAQ section of a foreclosure website that may shed some light on this:

“Who pays the foreclosure fee and costs?
If the borrower brings the loan current or pays it off, the borrower is responsible to the lender for the foreclosure fee and costs.”

“ . . .If the property is sold to an outside bidder at the foreclosure auction, the foreclosure expenses will be paid by the bidder.”
You may wonder if this is a new trend. Perhaps this post from a distressed homeowner trying to pay off foreclosure in 2006 will help you to see how this is not a new money maker for lenders:

“HELP!! Foreclosure Fees? Posted by Brad on October 10, 2006, at 08:46:51:

“We are currently 4 months behind on the mortgage. My house is in foreclosure and scheduled to sell on November 7th. I have been trying to work with the mortgage company to salvage the house. I sent in everything asked of me two weeks ago and called every day (sometimes up to three times per day) last week leaving messages for my work out an agent to call me on my cell rather than the home since I work. I FINALLY got a hold of her yesterday, and she said that since she could not talk to me last week, the matter had been closed out, and the original late fees of $400 had now jumped to $1200, and they would again jump this Wednesday. . . .”

“Just got the agreement papers to sign today and the fees have gone up an additional $500 from what they told me they would agree to yesterday. They want 2 months mortgage today and the rest ($576) extra over the next 9 months.”

In 2007, foreclosure fees were being scrutinized, and it was discovered that as many as half the loans in chapter 13, bankruptcy had questionable foreclosure fees. You can see this for yourself with this New York Times Article: http://www.nytimes.com/2007/11/06/business/06mortgage.html

That was then, and this is now: CNN Money reported that Bank of America would have to pay out 108 million dollars to settle claims that Countrywide charged homeowners inflated foreclosure fees.

So the next time you hear that your lender will modify your loan free of charge, just remember that they don’t. The trend appears to be to keep your loan mod extending month after month, while they rack up foreclosure fees. If you do get approved for a loan mod, do miss the point that the foreclosure fees are being added to your principal balance, and you will be paying them off at a “reduced interest rate” for the next two or three decades.

There are again, thousands of reports on file of Lenders convincing people that they have no rights and that they can count on the lender for help (you know the ones suing you). Saddest of all are the stories of homeowners who lost their homes because they believed their lenders when they convinced them that they did not need professional help. So often, those foreclosures could have been stopped.

Homeowners would be wise to listen to these words from this 13-year-old boy because he is right. (His post comes from a comment made to the CNN Money News article of June 18, 2010, entitled Foreclosure tricks cost Countrywide $108 million – his typos have purposely not been corrected.) You may recall that this was the settlement fee that Bank of America will have to pay out to victims of Countrywide’s inflated foreclosure fee practices:

“Matthew Hutchinson Jun 18
“The reason they are able to add all these extra fees is due to them counting on people either being scared, in shock or just plain stupid. They try to take advantage of the publics ignorance on these matters, and they are counting all that extra ill-gotten money cause they are hoping the people being foreclosed on are dumb as dirt!
“I am 13 and see that it is not right to rip off people that way, but if we did that to them in any way we would go to jail! No justice at all, unless your rich and in charge!”