[quote=tintin71]I was shocked to find out that my friend’s house has been foreclosed. The house is located in Poway and they had owned it for over 20 years…The lender was GMAC and they had done loan modification and had missed a payment(?)…
apparently missing a payment on a modified loan results in the house being sold by the bank unbeknown to the occupants…
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That actually seems reasonable… If they had kept their original 30 year loan and paid it off – they’d have a whole lot of equity and not small amount of debt. I’m assuming they refi’d, probably took cash out, somewhere along the way. And then got behind and eventually went to the loan modification process. They were fortunate to actually get a loan mod through.
And then they failed to take advantage of the new reduced payment – they missed it.
My limited understanding is that loan mods have caveats that the payments MUST be made in full and on time or the house goes straight into foreclosure. After all – you don’t get to do a loan mod unless you’re already in some stage of foreclosure to begin with.
It’s a hassle your friends have to deal with moving, but they should have made the payments on their modified loan. Period.
