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

By golfplan18   2012 Dec 18, 11:08pm   600 views   2 comments   watch (0)   quote      

http://ochousingnews.com/news/banks-go-all-in-betting-on-success-of-loan-modifications?source=Patrick.net

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     2012 Dec 18, 11:25pm  ↑ like   ↓ dislike   quote    

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     2012 Dec 19, 3:55am  ↑ like   ↓ dislike   quote    

Watch for the coming principal reduction lottery.

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