The government, in its attempt to help distressed home owners has set up a program with funding, to encourage banks to modify home loans of people who are in distress.
Despite the government’s best intentions, the banks, are not helping. Possibly because of being overwhelmed or because of poor staff, training, they are taking way too long to process. And then so often they are rejecting the application or offering a trial period, then rejecting the package.
Real Estate Guy has hears many times of instances where a loan modification, has ended, and often resulting in a major penalty being levied on the loan balance.
One such case in the Madison area is where the loan amount was approx $450,000 and the penalty, another $80,000.
Real Estate Guy is experienced in selling homes that are underwater, possibly where loan modification has failed, and working out a solution where the bank forgives a certain amount of the debt in exchange for being relieved of the potential bad debt.
If you would prefer to leave the home and you are underwater in your home, a short sale may be for you.