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Wall St. Finds Profits by Reducing Mortgages with Principal Reductions!

With all this talk about Mortgage Modifications all over the United States why aren't we seeing more success stories? The plain fact is that Mortgage Modification flat out do not work. Less than 1% of the applications are actually made permanent. So is there any solution to this problem?

Here is what the Wall Street Journal has to say about Mortgage Modifications

Since the program began, more than three million homeowners have become eligible for assistance. In turn, mortgage servicers have reached out to these borrowers, initiating the modification process. Roughly 760,000 homeowners have received loan modifications on a trial basis. But just 31,000 modifications have been made permanent.

That's a success rate of just 1%. This means that up to 99% of eligible homeowners struggling with their mortgage payments have been unable thus far to modify their loans.

The fact is that the only party that benefits from a mortgage modification is the Bank itself! Here are the main reasons why Mortgage Modifications flat out do not work.

1. The sad fact is that banks are simply debt collectors. They are not in the business of helping Americans. They will only modify your loan if they see a benefit.
2. Most modifications don't really relive a truly distressed homeowner. A fix of a few hundred bucks a month won't usually help someone keep their home. In most cases once a modification is successful the borrower ends up defaulting less than 6 months later. Most modifications come with a clause that you only get one!

The great news is that Wall Street has found a way to make a profit from this mess and believe it or not the homeowner can actually benefit.

According to the New York Times

Wall St. Finds Profits by Reducing Mortgages with Principal Reductions!