There have been some interesting developments related to loan modifications and the Obama administration’s response to the less-than-successful policy of pushing loan mods as a solution to the foreclosure crisis. Here are a few recent articles I thought to be interesting:
- Barrack Obama uses his decreasing political power to exert pressure on top mortgage companies to modify more loans – see article from CNBC here
- Apparently, the Obama administration doesn’t understand that lenders frequently have more financial incentive to foreclose rather than modify a loan – see article from NY Times here
- The mortgage industry realizes the politically negative ramifications of being perceived as foreclosure-mongers and respond to the NY Times article – see the CNBC article here
So if you wonder why your loan modification that seems to be a “no-brainer” isn’t being approved, it may be because your lender expects to make more money in junk fees and other charges than they could by modifying your loan.
Of course, I’m no insider in the mortgage business. If you are, I welcome your comments about this – please use the comments area below.
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