Why don't loan companies lower the interest rate when they modify the loans? 4 Answers as of September 09, 2013

They never lower the rate; they just add more years to the loan and add to the loan all payments that were not made. I only owed $90,000 when I was not able to make payments and then the bank gave me a loan modification and made the loan $102,000 with the same rate but added 20 more years to the loan. Do they all do this and is this legal? They are making a killing off people that need help. Is there anything legal I can do about making the loan for the amount I had when I had to stop making payments and are they suppose to lower rates when the modify loans. The rate is the same that I always had.

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Pelsinger | Kenneth Pelsinger
Should not accept a longer payout your loan will cost you much more over the life and your bank should have lowered your interest rate
Answer Applies to: New York
Replied: 9/9/2013
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
The lenders can either lower the interest rate or extend the loan or both, but it is perfectly legal.
Answer Applies to: New York
Replied: 9/6/2013
Mark S Cherry, Attorney at Law, PC
Mark S Cherry, Attorney at Law, PC | Mark Cherry
There are several programs that have rate reductions. They are a function of affordability, not market value. Your investor has guidelines and may or may not participate in the Making Homes Affordable program.
Answer Applies to: New Jersey
Replied: 9/6/2013
Frank Law Group, P.C.
Frank Law Group, P.C. | David E. Frank
Remember, banks are not required to modify loans. That essentially puts them in the driver's seat to dictate terms of any modification to which they will agree. There is nothing illegal about that. That said, you are best advised to have a real estate lawyer examine your particular situation to determine whether your lender has acted appropriately in accordance with the terms of your loan and applicable law.
Answer Applies to: California
Replied: 9/6/2013
Click to View More Answers: