Banks go "all in" betting on success of loan modifications

By golfplan18   Follow   Wed, 19 Dec 2012, 7:08am   373 views   2 comments
In Irvine CA 92620   Watch (0)   Share   Quote   Permalink   Like (1)   Dislike

Lenders in California are placing their faith in the success of loan modifications. Of course, to them success can mean something different than what it means to a loanowner. Success to a lender can be defined as obtaining a few more payments prior to a short sale or foreclosure. With prices rising, lenders benefit two ways from loan modifications. First, they get cashflow from non-performing loans. They know this is likely temporary as about 50% of loan modifications fail each year, but some cashflow is better than none. Plus, since prices are rising, when they do finally approve a short...

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  1. tatupu70

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    1   7:25am Wed 19 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    50% failing mean 50% don't fail. I'm sure lenders are much happier that their potential foreclosures are cut in half as opposed to collecting a couple more months worth of payments.

  2. Oil Can

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    2   11:55am Wed 19 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    Watch for the coming principal reduction lottery.

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