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Short Sales: Why Should I Pay Double For My Home?
Orange County CA – The Stop Foreclosure Institute recently received a question from Luis. Here is Luis's Question. "I am working on a loan modification on my home. I just don’t want to be upside down and want a fair interest rate. Why should I pay on a mortgage that is twice as much as my home is worth, plus the interest on that mortgage? It just doesn’t make sense. How can I get a loan mod with a fair interest rate where I am repaying what my home is worth today? Thank for your help, Luis.” Discover how other sellers successfully did a short sale to avoid foreclosure by clicking here. Here was our answer. You are asking for something that most lenders don’t like to do. Lenders don’t like principal reductions. Here is why. Principal reductions usually have to be written down right away on their financial books. If you owe them $300,000 and they reduce your loan principal to $150,000, then they immediately have to reduce the company’s earnings by $150,000 for the year. If they do that on enough loans, then it hurts the CEO’s ability to get a bonus. He may even risk losing his job. ... more
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