Your name saw this post on The ActiveRain Real Estate Network and thought it might be of interest to you. Please see the link below to review the post.

PRINCIPAL REDUCTIONS - WILL THE BANK GUARANTEE THE VALUE OF YOUR HOME?
Often times I get this question a lot trough my website www.Short-Sales-Expert.com
"Why can the Lenders just reduce the principal so troubled homeowners can stay in their houses. . ."
Many reasons why this is not a popular choice for Lender. .
Mostly because if they agree to one, then their next door neighbors would want the same thing..and their next door neighbors and their next door neighbors and so on. . .until the banking industry collapses
 
In a briefing by Credit Suisse this week, the financial giant’s opinion was that reducing principal balances of underwater mortgages is a risky idea that has not been shown to keep underwater borrowers from later defaults.  In my practice as a Florida real estate lawyer, that opinion flies in the face of borrower sentiment.  The guiding force in the Credit Suisse statement seems to be the “moral hazard” argument, coupled with statistics about the failure of principal reductions helping homeowners.
As reported by Bloomberg News, Dale Westhoff on behalf of Credit Suisse said that of the 11 million “underwater” homeowners, about 6.5 million have never missed a payment and 2 million more are making on-time payments after delinquency.  He said that widespread principal ... more

__________________________________________________
Are you on The Rain? Grow Your Network!