I have been trying to work out a loan modification ...

What is your original loan amount? 5.25% for 40 years sounds like a market refinance rate. They normally calculte the highest rate they can give you based on your current income and expenses. I fthere was truly a predatory lending case you could win but you must also hire a real estate attorney, so you could have $20 to $30K out of your pocket then try to collect at the end. I would see if they could get it under 5% for maybe 10 to 15 years. Did you use a loan mod company with an attorney or do it yourself. Normally doing it on your own, the research says borrowers get a higher rate about 90% of the time.

I'll take this one since I'm in the trenches every day.  Chances are your original loan was interest only.  If the loan mod is PITI (incl. taxes and insurance) it could be a great rate/ great term of 40yrs but the payment may not go down much since the new payment includes taxes and insurance.

Another explanation is that you had a somewhat lower rate and the reduction in rate didn't bring down the payment that much.

Often times on the loan mods we do, we may get a 2nd mortgage down from 14% to say 7%, which is great, but if the loan amount is only $70k for example the payment doesn't drop that much.

Those may be two explanations. If you want to dig deeper re: "is there any legal action I can take " there are options.

There are a lot of attorneys working the other side of the street doing "foreclosure defense" since they know all the illegal tricks the lenders, attorneys, judges, courts, etc use to steal someone's property illegally.

For example, not sure if you know this but the lender CANNOT foreclose legally without possession of the original "wet ink" signature note that you signed. Not a copy, the original note.

Judge Boyko (google his name) threw out 14 foreclosure cases in Ohio for failure of the bank to prove up their claim.  This is just one example.

I'd bet you a steak dinner your original note was sold at least several times and any foreclosure action would be brought illegally with no standing to do so.

I'm not an attorney, not providing legal advice, but I'm pursuing administrative remedies on 5 mortgages personally based on same facts but outside the court system.

If you go with an attorney, make sure you check them out. They usually charge what a loan mod firm would charge (like ours) which is approx. $2-4k up front then a monthly retainer to hold off the foreclosure for a few years. You are not making a mortgage payment during that time but you are paying the attorney monthly.

Google 'foreclosure defense" and you will find some attys. I can also point you in right direction.  Will also share the admin remedies we are personally using outside our business.

You as homeowner have many more rights that you know, but lenders want to keep that under wraps.

Hope that helps.

I am glad to hear that you did not sign anything. The problem is that the bailout money does not necessarily have to go to you and they usually try to get by with as little of a change as possible. This keeps the amount that they owe the government down. Once you have professionals agressively negotiating with them, the whole scenario changes to your benefit. If you would like to see if you qualify, give me a call or my friend Sammie a call at (901) 324-0602. Here is our review with the BBB:

http://www.bbb.org/memphis/business-reviews/mortgage-and-escrow-companies/conquest-financial-services-in-memphis-tn-15003562

This would be difficult to answer without knowing all the particulars, ie, loan amount, whether taxes and insurance are being escrowed, etc.  Also your refinanced loan amount may have gone up from the original loan amount if the bank added in various fees, origination, appraisal, credit report, prepaids, etc,etc, to keep you from digging into your pockets to bring money to closing.

 So if this is the case, even thou you got a lower rate, the loan amount went up, causing your payments to decrease slightly.  Also don't forget that Taxes and insurance is added into this loan which probably was not escrowed in the original loan.

Again without knowing all of the facts, the reason is difficult to pin point.  But an attorney may help you better.

May I suggest that you hire professionals? This is typical of the lender keeping the bailout money for bonuses. Call my A+ rated friend to chase them down to do the right thing. Ask for Sammie and tell him that Crystal sent you. 1-800-557-1467. They have a 98% success rate and if you don't believe me, check with the Better Business Bureau for a full review on Conquest Financial in Memphis, TN 

There are many law firms that are fighting illegal and non-compliant loan modification companies and seeking injuctions to stop them from continuing their illegal activities and also seek money damages to make you whole.

All you need to do is have a word with them and discuss out your situation with them. I ma sure that you will come out with some good suggestion from them.

This is the case with a lot of lenders. They do not offer you the best they can do because the government did not tell them that they were expected to do this in return for the bailout money. This is why the loan modification companies have popped up. But the lenders hate us because we go for their root rate and it costs a fraction of the cost of a refinance. This takes away from the lenders, loan brokers, title companies, appraisal companies and list goes on. Do you catch my drift? Please check out my profile if you just want to talk about it to someone.

If you  are facing foreclosure or need a mortgage modification please contact me. It does not matter how behind you are, i can help. Do not be discourgaed if you have been turned down in the past. I get results! Please email and lets save your home. contact me at : jlmalloy@aol.com