Loan Mod vs. Short Sale.....is a loan mod just a short term solution?

Interesting article regarding loan modifications and why they truly are nothing more than a delay of the inevitable...

50% Of Rescued Mortgages Have Re-Defaulted

Click HERE to view full article.

The latest data from the Office of the Comptroller of the Currency (OCC) shows that over 50% of homeowners who had their loans previously modified in order to avoid foreclosure have re-defaulted. This seems like an awfully high failure rate.

As one might expect, mortgages which were given higher cuts to their monthly payments (during the modification process) have been less likely to re-default. More help prevents re-default.

Hopefully the Making Home Affordable plan has encouraged more aggressive modifications. Past mortgage modifications were clearly just a delaying game, rather than a solution, since in the end more than 1 out of 2 "rescued" mortgages re-defaulted. It should have been done better the first time.

Were financial institutions unable to face the upfront losses which more aggressive mortgage modifications (and the haircuts they might cause) would have caused? Feel free to enlighten us here.

Call today to see if you qualify for a short sale! 602-677-7977

Jessica Sulliman & Randy Curnutt

Realtor, Real Estate Consultant, REO & Short Sale Specialist

jessica.sulliman@ashbyrealty.com

Jessica (602) 677-7977 Direct

Randy (602) 677-1002 Direct

www.sunshinespecialists.com