Mortgage Modification

It stands to reason that if a bank makes a loan more affordable for a borrower they are less likely to default on that loan. So why are banks just now deciding to finally get in there and make some modifications? Even now only 4% of homeowners in need of a loan modification are receiving them.

Some how they seemed to have finally gotten the message that they should be taking what they can get. Foreclosures are very costly because of commissions, legal expenses, taxes and the HUGE loss in value of the property that would cause the bank to take a giant hit.

Some home owners are heading to events hosted by the Neighborhood Assistance Corporation of America. Many lenders from most major banks are in attendance to help restructure loans based on what they could afford. They say that 40% of borrowers leave these events with a decision made on their loan modification.

Most of the restructured loans result in lower interest rates. Some even go as low as 2%. Looks like the banks are finally starting to play ball. Those working these events will sit down with a borrower and then start at the top and work their way down through the list of possible solutions. Then the lender decides whether this solution financially benefits the bank over foreclosure. Especially in the hard-hit areas of the country, foreclosure is just too costly.

http://money.cnn.com/2009/12/16/real_estate/great_mortgage_modifications/index.htm

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