The Problem With Loan Modifications

Just came across a story about the effectiveness
of loan modifications.

A well-known analyst company, Fitch Ratings,
took a look at subprime, jumbo and "low-doc"
m.ortgage loans that were issued between 2006-
2007; i.e. before the bubble burst.

Fitch estimated that 55-65% of these loans may
end up 60 days delinquent...AFTER they're
modified!

Why so high?

Because the new terms of the modified loans,
while usually (but not always!) lower than
the old terms, may still not be affordable.

"More often than not, reducing the home
payments to an affordable level may not
be enough to rescue borrowers who are
overextended..." said a managing director
at Fitch.

What does this mean for you?

If you're thinking about pursuing a loan
modification, you need to be on your toes
as you negotiate with your lender. In other
words, you must do everything possible to
make sure you get the best deal they
can give you.

Sometimes, this can mean refusing the
first offer they throw at you. Other times,
with some lenders, this can mean
accepting the offer, but re-applying for a
loan modification within a two-three month
period.

I'll be holding an online version of my
workshop, "Dirty Little Secrets the Big,
Dumb, Greed Banks Don't Want You to
Know About How to Renegotiate Your
Mortgage Rate and Payment...Even if Your
Credit is In the Toilet!"

Keep an eye out for the date and time!