It was only a few weeks ago that I read the statistics showing that the majority of borrowers that were given modified loan terms in order to keep the owner in the home were delinquent within 12 months of the modification!
I really thought that was the end of loan mods. I mean, if they don't work then why spend so much time and energy on them. After all, it's not really the loan terms that are the problems, it's that the borrowers were ill equipped to be home owners.
Perhaps they use some sort of "new logic", kinda like "new math" down at Fannie Mae because here's the latest article today from the LA Times:
More lenders allow “early workout” loan alterations
Borrowers with loans owned by Fannie Mae no longer have to be behind in payments in order to qualify for a loan modification. Borrowers facing financial difficulty, such as losing a source of income, now can apply for an “early workout” loan alteration. Under Fannie Mae’s program, borrowers who qualify will enter into a trial period of reduced payments, usually for four months. If the reduced payments are made on time each month during the trial period, the modified mortgage terms may become permanent.
I'm thinking I would do a better job with that bailout money...
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