RENEGOTIATION If you know someone who is struggling under their current mortgage, or a few months late on payments they may still have options. Some mortgage companies are now renegotiating the loan rather than foreclosing. They may reduce the principle, reduce the interest rate or a combination of both. The Feds are putting pressure on mortgage companies to try and keep people in their homes instead of continuing to flood the market with foreclosed homes. The reasoning is if the lender is going to lose money, why not discount the loan and avoid the expense of foreclosure and keep the home off the market? Do they really renegotiate? See the note below.
"John, you can't imagine how grateful we are to you! We were 8 months behind on payments and the sheriff's sale was scheduled, we figured there was nothing we could do. We were just hoping you had a quick buyer. To our amazement, you not only advised us to try and renegotiate our loan, you helped do it! What can we say? We know you would have made money to sell our house, but you helped us save our house! Thank you seems so little, but THANK YOU.' "Feel free to use this note as a testimony."
Name withheld Dec 2008