Colli Real Estate

What owners need to know about loan modifications

In my experience working with hundreds of homeowners in the region Seattle pre-foreclosure since 2004, the owner is better served when they are closed as soon as possible. loan modifications, for the vast majority owners, only postpones the inevitable.

Consider this fact: 3.1 million in loan repayments in September 2009, only 16% were able to change. The average homeowner has about one in six chance to get your bank to accept a loan modification.

Same get there, the owner generally has to suffer through months of agony, the fax and return the same documents to the lender, they receive contradictory information, and we strive to raise the funds necessary to enter screening programs lenient.

But what happens an owner who obtains a loan modification with success? Most owners (56%) re-default within 12 months. After only three months 28% are already late.

This makes the chances of success to an owner of twelve. But even that is not only surviving in great shape.

Only 10% of loan modifications imply a reduction of capital. loan modification is usually achieved by lengthening the duration loan or loan interest-free loan, with the return of investment principal deferred to the future sale of the house. This means that the borrower remains on the hook of a property that is under water, for another ten years, without having to pay the principal balance during the time. This is not the recipe for success. This kind of creative loans that caused the first bust.

It is the story specific fishery for a select group of lenders:

• Bank of America: 11 percent of loans were modified in the program Making Accessible Home.
• JPMorgan Chase: We have proposed amendments to 27 per cent of eligible borrowers under the federal program.
• Wells Fargo / Wachovia: Has been changed 17 percent of loans.

All above figures are from September 2009, the report of the Bureau of Comptroller of the Currency, otherwise, which regulates national banks. The OCC is a division of the U.S. Treasury, the agency that oversees the program Home Making affordable.

The bottom line is that if an owner wants full purpose, guarantee to you, there is usually one response. Find new homes in payment may allow and block "for many homeowners, that means ditching their $ 2,500 / month mortgage payments rent a studio and $ 900/mo. I understand that this may sound horrible to owners who have never missed a payment in their lives and feel like they are just passing through a difficult period.

However, my experience owners choose to drain their retirement accounts in an attempt to save their house, but in the end, completely out of money and are forced to move anyway. For otherwise, I have seen excellent Results from the owners to make a break with a bad situation and thus to preserve its valuable resources.

Another result to significantly over the situation, it is the added advantage of free mental space to pursue new business opportunities. By not pass every waking moment focused on the past, huge amounts of creative energy is released.

Maybe one day making Affordable Housing Program loan modification work for the vast majority of owners. Meanwhile, carefully analyzing the existing programs and make sure it works for your situation before committing time and money to get a loan modification.

Click Read more here about the advantages of short-selling program in Seattle and how he helped hundreds of other owners or visit the local www.sorinrealty.com

Written by: Ross Kilburn
Seattle Short Sales, Inc.

About the Author

Seattle Foreclosure Groups helps investors with the foreclosure process and buying properties at 25%-80% discount off market value at the auction.  We provide full service Real Estate consulting specializing in Foreclosure Auctions, Short Sales and Off Market Bank Properties (REO) in the Pacific Northwest. We provide help with financing, education, property search and tracking, info on title, liens, fair market values, opening bids scheduled for auction. With our assistance, investors have all the tools necessary to purchase properties at wholesale well below market value not available to the average consumer. The #1 Foreclosure Group in Washington.

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