will loan modfications help get the housing market back on track?
Posted in Real Estate Bloggers By Mike Dunn, Friday, December 19, 2008.With so many people talking about Loan Modifications, can these help stop additional foreclosures from continuing to flood the housing market, and dropping home values. I think it will. But how do we get the home owners to get up and fight for their rights. So many homeowners in foreclose are simple scared to call or attempt a loan modification. They don't understand that the lenders do not want any more homes. They are not in the real estate business, and have no intention of starting now!!
Take advantage of all the information out there before attempting a loan mod, as you only get one change to complete one.
Here are some excellent sites to gain more information.www.thechangestation.com and www.loanmodsofamerica.com Also try canidoaloanmod.com and negotiateyourownloanmodification.com.
The more homes we save from foreclosure, the sooner we get back on track again!!
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Submitted by Bruce Hahn on December 19, 2008 - 2:54pm.
American Homeowners Grassroots Alliance
Locally based nonprofits who specialize in helping homeowners facing foreclosure and who work with the lenders' foreclosure mitigation staff on an ongoing basis provide these same services for free. They report that most lenders remain in a state of denial, unwilling to make the necessary mortgage balance and/or interest rate reductions necessary to create a realistic expectation that homeowners will be able to keep up with payments under the modifications.
Recent data on loan modifications has shown that loan modifications that don't result in a reduction of at least 20% in monthly payments are twice as likely to go into default a second time. The ultimate loss to lenders forclosing on such modifications ends up being much larger than if the lenders had made modifications based on the homeowners realistic ability to pay in the first place.
At this point we do not believe that most lenders will begin making realistic loan modifications until they are faced with the threat that a bankruptcy judge will do that for them. The only way to prevent the vast number of potential foreclosures from dragging the market down further is to pass federal legislation that subjects home foreclosures to bankruptcy laws. This is in the best interest of lenders as well as homeowners and real estate agents because the lenders net proceeds in most cases will be substantially greater than their proceeds from foreclosing on those same homes.