I have helped numerous homeowners with loan modifications in an attempt to avoid foreclosure. The majority of these homeowners however continue to repeat bad habits and bad decision making processes after the mortgage has been modified to meet a very strict budget that the new payment is based upon
Here is some proof
"Redefaults" Continue...
Fitch Ratings is slated to release a report this week showing that 65 percent to 75 percent of modified subprime loans will still fall behind by 60 days or more within one year of the loan change. Although some experts believe that reducing the principal amount owed is the best way to keep distressed borrowers in their homes, Fitch found that 30 percent to 40 percent of loans that had lowered principal amounts were still redefaulting after 12 months. Borrowers are redefaulting at a high rate because home prices continue to fall, unemployment is rising, and because of public pressure to help homeowners - even those who are still likely to default even after receiving assistance.
[SOURCES: Wall Street Journal; Information, Inc.]
We grew too fast...too long and ran out of qualified buyers in 3003. Flooding the market with buyers who were given NINJA Loans (No Income No Job or Assets) the market was falsely over heated and those types of borrowers never paid their bills on time when they were renters or if they are now owners....
The market will return and the value of home ownership is still the best way for an average family to build wealth
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