An offer for a trial modification is a binding and valid contract between a borrower and a lender. The contract is fully enforceable under California law as long as it is:
- In writing
- Signed by the parties
- With clear terms and conditions for performance
In many cases, borrowers jump through hoops and do everything required by the lender but the trial modification never converts to a permanent modification, or the lender denies the borrower’s permanent modification for any number of reasons, or no reason at all.
Many borrowers are desperate to save their homes from foreclosure and will do anything the lender says to make that happen. When a lender offers a trial modification, as long as the borrower enters into a written contract and fully performs, the lender is required to honor the terms of the contract and make the modification permanent. A lender is in breach of contract when it fails to offer a permanent modification after a borrower completes a trial modification. In many cases, reasons for denying a permanent modification are not valid as long as the borrower has satisfied the terms of the trial modification.
A borrower is in breach of trial modification when the terms and conditions are not met. Common examples of a breach are:
- Failure to make a mortgage payment on time
- Paying less than the amount required
- Not signing the trial modification agreement
- Not returning the trial modification to the lender by the deadline
It is important to know exactly what you are signing when entering into a trial modification. You should have a thorough understanding of what the actual benefits of the agreement are, both to you and to the lender. Remember, no one wants to sign away money that is rightfully theirs. A valid home mortgage modification agreement should be beneficial both to you and to your lending organization.
Beware of home modification scams. They happen most often when a desperate, overworked and overstressed homeowner is offered something that seems to be to good to be true. Mortgage modification scams abound, and if you do not do your homework you are likely to find yourself a victim. Many mortgage modification scams are built around a principal reduction modification, a modification that everyone would like, but that few honest lenders are willing to give.
Our mortgage attorney will take the time to make sure you are protected and that you enter into an agreement that makes sense and is fully enforceable. If you have questions about a TM, call right away for a free consultation with us to evaluate your situation. Our mortgage attorneys will give you suggestions on what actions to take and how to move forward. Call 818-254-8413 or come to the office for a free meeting with our attorneys. The call could save your home!