Sellers Succeed In Doing Loan Modifications to Keep Their Homes!

By
Real Estate Agent with ERA Realty Center

I was speaking to an agent last week that said he believes loan modifications are just a stall tactic from the banks.  He believes they are not really successful at all and probably just reduce payments by a minimal amount like $13.00 per month.

I have heard otherwise from 2 sellers that I had their homes listed. One of the sellers asked if I would take his home off the market, so he could do a loan modification and see about keeping the home if possible.  It was a gorgeous home.  Of course, I said yes.  Why would I want to sell a home that the seller didn't want to sell?  I received a call some time later saying that his monthly payment had been cut in half.  Of course, I never saw the proof, but I certainly believed him.  We had an offer on another seller's home, but he turned it down and said he wanted to do a loan modification instead.  He was able to negotiate a sizeable reduction in his monthly payment, according to him, from both the first lender and the 2nd. 

This sounds like a wonderful solution to the problem of having too many foreclosures for sale.  What is your opinion?  Have  you had experiences you'd like to share?  Please let me know.

When you do want to buy, sell or refer, please call Janet at ERA at 435-865-1019 or email naisbitt@infowest.com.  You'll find lots of helpful information on my website including the MLS at www.homesincedarcity.com.  I'll work hard to help  you reach your real estate goals.

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Rainmaker
123,138
Janet Naisbitt-Bagley
ERA Realty Center - Cedar City, UT

Do You believe loan modifications are just a stall tactic by the banks, or do you believe they are designed to help owners keep their homes?

Aug 01, 2010 08:35 PM #1
Rainmaker
291,354
Kate Bourland
Marketing with Kate - Redding, CA
Onlilne Marketing Mobile Marketing

It depends on the terms.....I think that loan modifications can work but I'm hearing that there is a lot of predatory loan modifications taking place.  They are normally short term and tag the back payments on to the end of the loan.  When they expire in 2 - 5 years the buyer may still run into a situation where the house is not worth the value of the loan.  Unless principle is reduced, my fear is that the whole loan modification process will just become another act in the predatory lending saga.

 

Aug 01, 2010 08:46 PM #2
Rainer
5,193
Chris Browne
Trillium Realty Group - Salt Lake City, UT

It is a great solution in theory, but the banks need to make it meaningful and lasting. They are far less willing to do it for an investment property, which is odd seeing as a income amount can be provided, why not match the loan terms to the income being received?

If you agreed to pay me $2,000 a month but could only pay me $1,200, I would take the $1,200. Maybe add the $800 on to your principal, but I would not take your home or investment property away, especially if it meant I take a loss because you are upside down.

The banks need to use some common sense, which is in short supply on Wall Street IMHO.

 

 

Aug 03, 2010 06:58 PM #3
Rainmaker
132,836
Marty and Laurie Gale
Utah Realty - South Jordan, UT
Utah Realty | 801-205-3500 | UtahRealtyPlace.com

If you believe in the TOOTH FAIRY, then believe in a successful loan mod. Accroding to A Wells Fargo Loss Midigator one quarter of one percent of loan mods applied for are successful. For predators it is a way to provide false hope and make a buck. Loan Mods should only be done directly with the. Bank. Albeit in some cases they are the right thing to do. 

 

Aug 04, 2010 03:05 AM #4
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Rainmaker
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Janet Naisbitt-Bagley

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