Why lenders are unwilling to change mortgage loan?

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I have friends who bought a house in 2006 for $ 275,000. They have received funding from conventional 10% down and made their mortgage payments. The subsequent real-estate crisis of zero-pay-what-you want-ready destroyed the value of their property. Your lender has refused even to discuss loan modification. They departed their credit would appear to recover more quickly than the housing market. Your old house is now on the market for $ 95,000. They would have been happy with a mortgage to DOUBLE that assessment without interruption in revenue or costs of foreclosure the lender. It makes no sense to me. Everyone at the entrance? There is more to it than personal responsibility. Banks and mortgage brokers peddled unwarranted loans to buyers naive. Other buyers have the opportunity to purchase property they knew they could not afford. Angelo Mozillo Countrywide CEO made millions building houses of cards and real estate went when he collapsed. This does not change the fundamental Frage.Jeffrey you for your comment. When my friends have contacted their lender told them they needed to miss three payments before the lender (Countrywide) would talk to them. Your response: “Okay, if what you want.” It made no difference. They missed six payments. Still no difference. She consulted a real estate lawyer and walked away. They now rent a nice house for $ 900 per month less than your old mortgage payment and invest the difference. In seven years, when their credit, they are recovered in the vicinity of $ 90K-$ 100K, must return to the market.

5 Comments
  1. Reply
    The CPA Guy
    February 15, 2011 at 12:16 am

    The lender probably assumed that your friends would continue to pay the existing loan without the modification. It was a gamble and the lenders lost that gamble. Really, that’s all there is to it.

  2. Reply
    Mary
    February 15, 2011 at 12:52 am

    Unless a lender has reason to believe that a borrower is about to default, there is no reason to modify a loan to make it less valuable to the lender.

  3. Reply
    real estate guy
    February 15, 2011 at 1:07 am

    WTF. Would you be asking this question if the value doubled. NO!

    They purchased a home and made a PROMISE to repay the loan. PERIOD!!

    It was 100% wrong for them to walk away. And I hope that the bank comes after them for what they STILL OWE.

    The bank is under NO OBLIGATION to change the promise. This is what a contract is.

    If banks start to hold people accountable for just walking away, this mess will end.

  4. Reply
    Northeast Dude
    February 15, 2011 at 1:29 am

    Banks holding people responsible? Hah! It’s the real estate agents, banks and investment brokers that caused the whole problem in the first place. There were commissions to be made selling real estate to people on the fantasy of ever spiraling values, millions in fees to be made granting worthless mortgages and millions more in bundling these mortgages into worthless investments. Then the government takes our tax money to bail out the fat cats.

    Evidently there just isn’t enough money to be made modifying mortgages. There must be more profit in taking bailout money and using current financial market conditions to screw credit card holders.

  5. Reply
    Jeffrey your modification expert
    February 15, 2011 at 2:14 am

    Lenders WILL modify their borrowers mortgages. The trick to the situation here is for them to declare a Hardship, and go late on a payment, then the lender will see that they are indeed at risk of losing money on an investment they made (Loaning to your friends for the home). I have yet to come across a lender that would rather foreclose the modify. You / They need to talk with a professional modification company that is backed by an attorney that specializes in this, it’s absolutely free to speak with one. If they determine that you are a candidate for a modification based on the hardship, and their household financial situation, they will want to retain their services. Good Luck and I hope they do as I say as this will at least give them more knowledge about their situation.

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