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Loan Mods and the Future of Education in This Country

Real Estate Agent with Home Run Real Estate BK174782

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.

Mario Gattavara
Coldwell Banker Lifestyle Properties - Oroville, CA
(Lake Oroville Area)

I always ask loss mitigators with banks what they think of loan mods and short sales when I am dealing with one. A loss mitigator with a bank himself said that a good majority of loan mods fail. He alsostated that he felt it was a stall tactic that the bank allowed before they failed again, and inevitably they will most likely foreclose.

I also get feedback on short sales. Short sales appear to make it look as if you tried to resolve the problem. In turn having less of a negative mark on credit. Which I found to be true with a client of mine who performed a short sale with me about six months ago in Butte County, and now purchased a home in Palm Springs.

Maybe people should pursue the short sale instead of digging a hole...

Sep 19, 2010 07:21 AM
Ellie Drury
Home Run Real Estate - West Palm Beach, FL


That's a great idea to get the perspective from the loss mitigators. I am going to start doing that so I will have something solid to share with potential short sale seller clients. As it is now, both you know and I know that in most cases they would be better off doing a short sale. I really don't like telling the homeowner that at a time that they are still hoping to keep their home. Yes, it's the truth, but they will figure it out sooner or later. I keep in touch. A couple of my former short sale clients were able to complete successful loan mods. They are the exception though.

Thanks for commenting.

Sep 20, 2010 03:00 AM