Mortgage Modifications (and short sales) have been presented as the medicine to cure the Foreclosure Disease. But many years now into this disease called foreclosure, it’s certainly looking like mortgage modifications are not such effective medicine. Which leaves the consumer with two choices:
1) Accept a Mortgage Modification or; 2) Fight Like Hell And Win Foreclosure!
In most cases, the choice is easy…if the bank refuses to present a good modification, why not take the chances and fight like hell to win the foreclosure case? The bank will certainly be far more likely to negotiate after a loss than when consumers approach, hat in hand begging for a little mercy. Let’s take a look at the Florida-specific data to understand exactly what the numbers on mortgage modifications look like:
In the second quarter of 2013, 12,116 proprietary (non-HAMP) permanent modifications occurred in Florida. This increased the amount of modifications provided to homeowners in Florida to a total of 382,243 since mid-2007. The average loan count of Florida in 2013-Q2 was 2,374,444 and 7.97% of those loans were delinquent (MBA Methodology). There were also a total of 11,531 repayment plans initiated throughout Florida in the second quarter of 2013.
There are real troubles buried within these mortgage modification numbers. Troubles for homeowners and troubles for the banks that made the modifications.
I will be clear about the trouble with mortgage modifications for homeowners….signing a modification may help the bank correct many of the problems they have…problems that may prevent them from winning a foreclosure. Accordingly, every consumer should think long and hard before signing a modification.
The problems for the banks? Well….I’ll just sit on that for a while. Just a little while.