Mortgage Modification Failures! By Sohail A. Salahuddin

More failures for loan modifications hit our market.  The Banks still don't get it, which most of us don't get.  What makes sense to us doesn't make sense to them, or so it seems.  Most us understand that the banks that don't do a loan modification for a home owner have to file suit for foreclosure which cost them legal fees and in today's foreclosure world this is very costly and time consuming for the banks.  Now, once they are successful with the foreclosure they have to then get the house back on the market and who knows when it will sell.  If the property does sell, it's going to be for a minimum price.  What makes sense to most people is that if the banks modify the loan, the home owner can stay in the house, pay the bank some money still, the bank will have a loan out there still collecting some interest and it seems to all workout in the end.  Here's the kicker and what most people don't realize in less they are in the business is that an individual with home financing has front end ratio's (housing ratios) and back end ratios (total debt to income ratio).  What the banks look at are all the other bills that come into effect such as the revolving debt from credit cards which on average have the home owner at a back end ratio of over 60%.... WHICH IS A SLAM DUNK FOR FORECLOSURE!  Maybe the banks aren't so dumb and they really see the inevitable.  Here is my suggestion, stay away from loan modification companies and work diligently with your bank to stay in your home.  If that doesn't work out, you do have other options such as short sale, consent foreclosure, your one time right of reinstatement.  There are many options to avoid foreclosures.... speak to a real estate professional who has the knowledge to guide you in the right direction.


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sohail@smartpropertyusa.com