Real Estate Law
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Good morning. I am sorry to hear about this. Can you share with me why they rejected the payment? Were all previous payments timely? Did they tell you why it was rejected?
Thank you for the reply. If a home owner fails to pay under the terms and conditions of a trial loan modification, the bank can proceed and foreclose. The trial modification is used to show the bank that the homeowner can pay if the loan is modified, so the homeowner can keep their home but if they fail to pay or fall behind, the bank can proceed. If you are able to pay in full, it may stop this but if you are behind and were unable to bring the loan current, they can refer it to an attorney. You may want to see if they will agree to two payments to bring it current but the trial modification can not continue to fall behind or else it results in a default and foreclosure.
If the payments are not the full amount, the bank can reject them. Moreover, any payments received, can be applied to what is owed but the loan continues to be in default every month, until it is paid, which triggers the 90 days, which start foreclosure proceedings.
The goal is a modification is home retention. The bank wants to try and keep the homeowner in their house. While the home owner is paying under the modification, foreclosure actions should be halted. They can be picked up if the borrower defaults but when there is a modification, it would be in bad faith to keep going with the foreclosure.