CRR Blog

How to spot a loan modification gone sour... and know what to do next...

We have an example property on Kashlan Rd in La Habra Heights in Los Angeles County.


I click the link to www.Zillow.com to look at their price history.  The owner bought the home in

1995 for $470k and changed ownership slightly in 2005 when they borrowed

$999,800 and it appears on the county record as a "sale" for $1,439,000. 


A grant deed selling from self to self would explain this.


The loans look like this today:


1st          *             $999,800.00       12/1/2005


2nd                    $1,157,230.00       1/25/2011


A search in our archive reveals that the owner fell behind

in the beginning of 2009. I ran the search based upon the parcel number because

I had a suspicion that we were looking at a loan modification.


It looks like that is exactly what this is.  The lender records what looks like a new deed

of trust, but is not.  The modification is an update on the previous deed of trust. 

When you look at the loans it looks like we have a first and  second. 

If you know there is only one loan, aren't you more likely to pursue the

short sale offer?  Of course you are. 


So learn how to recognize a modification gone sour.


They got a loan modification in 2011 and proceeded to not make payments again.  This is a common

tactic by those who fell down because the market dropped in 2008.


Knowing this, we also check to see if the owner is interested in an offer, as one

modification is all you can get.  I do this by clicking on the link to www.zillow.com again.


The property is now listed as a short sale for only $800k. Make an offer!


Happy Hunting!








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