Dangerous Advice – Should You Stop Paying Your Mortgage To Improve Your Chances Of Getting Approved For A Loan Modification?

I hear this a lot. Clients and new callers tell me that they were advised not to pay their mortgage payments in order to improve their chances of modifying their loan. When I ask who told them that, they usually respond that a loan modification company or consultant told them. That’s when I advise them that there is no such thing as a loan modification company or consultant. At least not legally. Sometimes, it’s the bank rep who told them not to pay. Really. I’m not kidding.

This raises a dilemna faced by all borrowers who want to modify. There is generally a perception that lenders won’t truly work with a borrower unless the loan is in default. The problem arises when the lender does not modify – and you cannot force a lender to modify. When that happens, the borrower may find that the entire loan has been accelerated and the lender may start foreclosure proceedings. So, that is the risk you face if you are a borrower and you intentionally miss a payment.