Lotus Realty Group

Loan Modifications-Is it really in the home owner's best interest?

President Obama's plan to ease mortgage terms for distressed home owner's, announced over a year ago has fallen short.  In one sense it is a success by slowing the flow of foreclosed homes to the market. The official goal of the HAMP program is to reduce monthly loan payments so they can afford to stay in their homes. But housing analysts at UBS Securities in New York, in a report last week, described HAMP as a vehicle to delay the timing of new foreclosures hitting the market.  Most analysts assume that a large share of people who get loan modifications will default again within a year or two.

This truly comes as no surprise. Most home owners are desperate to stay in their homes and the idea of a loan modification seems like the best solution, however, the question still remains, DOES IT MAKE SENSE?  The reality is that most people are not going to qualify for a loan modification that makes economic sense for both the borrower and the lender. Those who can't afford their homes should be allowed to exit with dignity, such as through a short sale, in which the house is sold for less than the loan balance, said Louis Amaya, chief operating officer of National Asset Direct Inc., a New York-based asset manager whose affiliates purchase and service troubled mortgage loans .

Are we thoroughly qualifying home owners? Are we telling them the truth? The goal is to analyze their whole financial picture. Are these homeowners going to end up in foreclosure again in a year or two? There is a huge amount of people without jobs, sick loved ones, massive credit card debt. Not to mention taxes and insurance will adjust as well. The list goes on. The idea is to avoid foreclosure, not stall the process.

Those of us at Lotus Realty Group are proud of our passion to see clients succeed. For our clients in foreclosure, we offer services to negotiate their short sales, help them get settled into a new home and even provide a credit recovery program that makes it possible to own another home within two years.

We also recognize the need for realtors to have someone they can turn to in negotiating the transaction of a foreclosed home. For them, we offer to handle all negotiations while allowing them to keep all their commission.

At Lotus Realty, helping people ethically succeed is at the forefront of who we are