Loan Modification Or Short Sale - Is There A Choice Anymore?

Real Estate Broker/Owner with South Florida Real Estate & Development, Inc. BK3027955

Recently - I went on a listing appointment and met a couple who tried unsuccessfully to do a loan modification with the bank.

They had purchased a condo for $255,000 in 2006 and now it is worth about $90,000 in today's market. Condos have been hit harder than single family homes in South Florida.

The couple called the bank with the help of an attorney - received the "temporary" loan modification and "probationary period" for three months. Three months passed and they made the payments on time and thought the bank would give them the "permanent" loan modification which was promised if they passed the probationary period.

Well - they like thousands of other loan modifications were denied. Banks are not approving the "permanent" loan modifications. I know of a bank who approved of 18,000 probationary loan modifications but only approved 18 permanent loan modifications.


How can this be working? How is that fair to promise the customer of a permanent loan modification if they pass the three month probationary period only to be denied and told they should do a short sale transaction.

The bank told the customer to call me and list the property for sale and they will approve a short sale with a satisfactory market value contract.

Seems to me the banks are more willing to approve short sales than actually approve a "permanent" loan modification even after some have paid attorney's thousands of dollars only to be approved for three months and after be told to do a short sale?

If you need professional consultation in short sales and loan modification call Nicholas Goglucci @ 954-650-7800

I can help you - give Nicholas Goglucci - Certified Short Sale Specialist a call.


Comments (10)

Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

I have had a few clients tell me they were TRYING to get a loan mod, but unsuccessful.    So far, have not heard that ANY got this accomplished.

Jun 05, 2010 02:15 AM
Broker Nick
South Florida Real Estate & Development, Inc. - Coconut Creek, FL
Broker Nick Relocation Broker Service

Joan - Keep in touch with them - they will need your help in a few months - or they will call someone else -

Jun 05, 2010 02:18 AM
Broker Nick
South Florida Real Estate & Development, Inc. - Coconut Creek, FL
Broker Nick Relocation Broker Service

Michael - I don't see many 3% loans out there - sorry - as I said already - banks are not approving permanent loan mods period

Jun 05, 2010 02:46 AM
Ted Baker
Carmody and Associates LLC - Winter Haven, FL

Nick - what is interesting is that the needed component (principle reduction) is missing in all but a few cases.  The banks who are servicers for the actual loan holders (holders of mortgage back securities) are limited by their pooling and servicing agreements.  But the great majority of these loans are held by fannie mae and freddie mac - fully backed by the government (us). And they are allowing no principle reductions.

So why are the quasi government organizations the hardest to work with.  Where is the government pressure to clean up their mess, limit their salaries and bonuses.  Where is the media outrage. In fact where is the government at all to work out these problems.

Why is the media ignoring the warning signs of Greece and Spain as we try to join in the socialist club.

Where are we going and what are we doing in this handbasket. 

So much rhetoric, so little time.  

Jun 05, 2010 06:31 AM
Melissa Anderson
Mortgage of Texas & Financial - San Antonio, TX

I believe the banks prefer the short sale so they can get the bad loan off their books asap.  A loan mod drags on and on and eventually many loan mods turn in to short sales later on anyways. 


Jun 05, 2010 09:50 AM
Jeffrey Smith
Author of 'Realtors Guide To Short Sale Success - Eustis, FL
Short Sale Education

My son works for a loan company that has an attorney that was trying to help do loan modifications. They stopped trying because even the attorney had a success rate of 1 out of 60.

Jun 05, 2010 10:30 AM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices


Maybe it is simply a wishlist of the governemt, and for as long as it is not truly a demand of the market, it is not working, but it most probably could not work in the first place?


Jun 05, 2010 07:44 PM
Mike Saunders
Lanier Partners - Athens, GA

Nick - I think the program is really only a "feel good" program that is benefitting few, if any, taxpayers and underwater homeowners. But the banks can show the gov't, we tried, look! Now give us more money!

Jun 06, 2010 10:54 AM
Yolanda Hoversten
Self Employed - O'Fallon, IL
Referrals for O’Fallon, IL & the Metro East

Nick, it doesn't make sense, but perhaps they are just cutting their losses earlier as Melissa suggested.

Sorry, this is late but you're now featured here... congrats!


Jun 07, 2010 05:33 PM
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

About 50% of my short sale listings are now failed loan mods. And I'm just one Realtor out of thousands of Realtors nationwide helping sellers with short sales.

Jul 31, 2010 01:55 PM