I have a fear of the repurcussions of what all these loan mods will do to the already poor education performance in our country along with the effect on our future economy.
In the past home equity has been a primary source of capital for funding college educations. Today many homeowners are making the decision to stay in their homes and do a loan modification rather than do a short sale. What may seem like a good decision for the family today may ultimately create long lasting financial problems for the children in the not too distant future.
When a homeowner elects to do a loan modification they may be stuck in that home for the next ten or more years with negative equity. It's understandable that a family head may decide to keep the children in the same home, same schools, etc., but if it's at the cost of their future college education and likely their future economic earnings, this could potentially be an extremely damaging decision. I just don't think we can afford to be short sighted in making these decisions. Our hearts go out to these families now, but our hearts will break wide open if these same families get trapped in poverty for decades to come.
For more information on short sales, please visit my website at ShortSalesinWestPalm.com.
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