Are mortgage mods robbing you blind?

I'm sorry, but this is just plain wrong. I don't care what explanation banks and other lending institutions might give, it is just plain and simply WRONG!

What I'm steamed about is a new report that reveals that, in most cases, mortgage loan modification programs (provided you can actually convince your lender to modify your mortgage....not the easiest thing to do!) are actually sinking people deeper underwater than before!

Now, mortgage modifications are supposed to make paying for your home easier, right? Make it possible to keep your home and not foreclose, right?

Well, think again.

The State Foreclosure Prevention Working Group report concludes that "Servicers routinely capitalize delinquent interest, corporate advances, escrow advances and attorney fees and other foreclosure-related fees and expenses into the loan balance when completing a loan modification, " according to the New York Times.

So, at a time when many argue -- and I agree -- that the only real mortgage modification program is one in which a judge might be able to lower the actual principal (an idea nixed by Congress after intense lobbying by banks), apparently what many lending institutions are up to is RAISING a home owner's principal. The homeowner pays less each month because the interest is lower.... but, over the long run, shells out a lot more because the principal has now grown and payments are stretched out over a much longer period of time.

The working group found that 72 percent of loan mods increased the borrower's principle. Just 9 percent of modifications reduced principle in any significant way.

if that's not robbery....

Charles Feldman is a journalist, media consultant and the co-author of the book, "No Time To Think-The Menace of Media Speed and the 24-hour News Cycle."

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