This is a very difficult topic to write about. First - What is Home Loan Modification? This is the act of helping the helpless and sincere Home Owners who have hardship to reduce the monthly payments on their home. The hardship could be because of job loss due to the economy or because of the death of a spouse who was on the original loan. Hardship can take several shape.  Then, is it moral to apply for Loan Modification?  On one side, if a family is sincere and needed the help involved, it is just and right so to do.

Where fraud creeps in and people take advantage of situation is what becomes morally wrong. I will stand in the position of the Mortgage holder. Then I will be afraid to justify the mortgage you took five years ago and I the mortgage bank is servicing the loan. You now want me to reduce the mortgage. Who will be responsible for the difference? How do l write off my loss. Suppose I have to deal with tens of thousand people, where and what type of accounting is this? I begin to look at the morality of the situation now as a mortgage holder. Do l have a choice? Yes, I can refuse the modification and the owner will default and l will try to foreclose. What if my foreclosure cost me more money. Then, it may be well worth it to modify the loan and prolong the amortization of the payments.

However, if the modification is to help a great number of people who lost their jobs but  struggling to replace the jobs lost. Or if the spouse suddenly died and they are left with one income. Or if a whole community or county suddenly are now upside down in the value of their home and all new homes been built are priced below the older homes. Then it is moral to modify the the mortgage in that community and County.

Modifying the Mortgage will bring Stability to the community and the County. Home owners will stay in their homes. Price of home will become Stable and the County will be able to collect the Real Estate Tax. Families will not be disrupted and scattered all over to find new homes in apartments. The Mortgage Banks will be faced with little or no foreclosure. The economy will bounce back. Life will begin to improve. Loan Modification has its two faces, it could be morally right and morally wrong. What do you think?