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Home First, Inc – Loan Modification Questions – Tutorial 5

By Mike in December 2009|Downtown San Diego Real Estate|Downtown San Diego Real Estate Market Analysis with 0 Comments

Home First, Inc - Loan Modification Questions - Tutorial 5Home First is an industry recognized loan modification and short sale negotiations consulting firm and they are more than happy to help you with any questions you might have in regards to your “Loan Modification”.

  • What’s the lenders incentive?

The lenders incentive is simple: money. Nobody wins when a house is foreclosed upon. The pain to the homeowner is obvious. The neighborhood suffers. The economy suffers. But in many scenarios, the bank stands to lose quite a bit as well, and more than you might think. If a house is already worth less than is owed to the mortgage, then the loss is obvious, especially when you consider that a house sold at foreclosure only gets about 80% of the fair market value, and that the costs of the foreclosure process itself are considerable. Perhaps the repercussion that has the most impact is the one people think of the least, lending ability. Banks loan in multiples of their deposits, for instance, if a bank has $1,000 in deposits, they can lend $10,000. Say that a house goes into foreclosure and the bank has to recognize a loss of $100,000 because the house auctioned for $325,000 but the loan had a balance of $425,000 – thats $1,000,000 the bank cant loan out. If the bank feels that a homeowner will be likely to make a modified payment, they would definitely prefer to take that lower payment and be able to keep that loan in their performing assets category. The trick is, painting the picture to the investor that you have financial hardship and need a lower payment, but not total financial devastation thats going to preclude you ever making any payment.

  • Is a modification giving me a new loan?

A modification amends the term, payment, and/or interest of your existing loan.

Dont wait! Contact Matthew C. Scott at 858-581-6648, e-mail or fill out a contact information form online here.

To read 92101 Urban Living’s former blogs please click on Home First, Inc – What is Loan Modification and Why is it Important?, Home First, Inc – Loan Modifications Questions – Tutorial 1, Home First, Inc – Loan Modification Questions – Tutorial 2, Home First, Inc – Loan Modification Questions – Tutorial 3 and Home First, Inc – Loan Modification Questions – Tutorial 4.

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