Mortgage Modifications and the Current State of Real Estate

The mortgage and banking industry has taken a hit, but in my opinion, the homeowners are the ones left with the short end of the stick. The mortgage companies, banks and brokers knew for years that home values were being inflated on the front line for second mortgages, equity lines and refinancing. They turned their heads. Preferred appraisers asked "what do you need it to come in at", rather than offer an honest appraisal for the company and homeowner. Of course the homeowner wasn't going to dispute the amount, they were happy. The inflated value meant that they could take out more money from the bank. Additionally, they felt their investment had made them money. The brokers and bankers on the front line wouldn't dare make a noise; doing so would have lost them the deal. Banks and underwriters knew that there was little reason to send it back other than a hunch. All of the documents matched. Throwing up red flags would just lose their bank or mortgage company money as the homeowners would just go to the next company that would put it through; they were available by the dozens.

So, here we are. We are sitting on homes, that in many cases, are worth less than what we owe. Some have been valued for over two thirds less than the mortgaged amount. The home owners can't sell their houses traditionally. If they want to move, or need to move, due to a job opportunity, they can't without walking away, foreclosing or placing their homes in a short sale. Either choice leaves the homeowner with bad credit. Banks have tightened down as they should on credit scores and loan to value ratio's but now, it may not be because the homeowner wants to foreclose or ignore their bills.

Big banks and mortgage companies are getting federal bail outs. The homeowners aren't recieving the same help. Some mortgage companies have offered to work with the homeowners, but few loans have recieved a principle reduction, which brings us back to our original point; the homeowner is stuck.

I will be writing daily on steps you can take to save your home and when it makes sense to even go through a modification. In some instances, unfortunately, it may be better to simply walk away. We will go over items such as what the banks will look for in the modification process, what types of modifications are still available and actions you should take. This is a blog that I would suggest subscribing to as the rules, laws and regulations are rapidly changing. This will be a blog that can truly help the people. Let me know if you have any specific questions; I will be happy to answer them.