Home Loan Modifications and Mortgage Modifications
An unfortunate number of Americans have faced foreclosure. Neither the banks, nor the homeowners want this to occur. Banks don't want it to occur because they are forced to write down foreclosures, which in turn runs the risk of the bank failing. Meanwhile, homeowners obviously don't want to lose their homes.
Most foreclosures originate from bad lending practice at the start of the lending process. It used to be that home buyers had to show 30% of the list value of the home as a down payment, and one year's worth of pay stubs to receive a mortgage. Equal opportunity in lending laws meant that this was deemed discriminatory. When this was combined with an incentive structure that paid huge commissions for loan origination, based on the value of the loan, the end result was ultimately predictable.
The loans that were written are poorly conceived, and the ultimate consequences can be seen in the financial section of your local newspaper, and in the Wall Street Journal, where they have made the front page. Most of the bank failures we have observed so far have come from banks leveraging mortgage driven securities.
Common Questions
- How do I know if I am considering the right
type of home loan?
It's very important to educate yourself about the various types of home loans that are available...more - Can I afford it?
This is a critically important question. The bottom line is that you should be easily able to...more - What about Fixed Rate Mortgages?
The majority of home loans you are likely to find are fixed-rate mortgages. These home loans usually have a span of...more - What is an Adjustable Rate Mortgage?
As the name indicates, the rates are changeable. This makes it possible to receive very low rates for...more - Are Bad Credit Mortgages Still Available?
Despite what you might have heard, there are still some mortgages available for responsible borrowers...more
