New Cards Please

When are the Fed’s and lenders going to learn they are on the wrong path?

Obama said the Loan Modification Program would help 4 million people at a cost of $75billion. That was back around April. The L.A. Times “Report Today”, December 11th, reports 31,382 homeowners were successful in obtaining permanent loan modifications. That 31,382, is the total from 700,000 applications. The Banks are really taking the heat for the poor success rate.

What the Fed’s don’t understand is most borrowers that are delinquent with their payments don’t want anything to do with the fussy math of a loan modification. The concept is NUTS!

The Obama Solution for the housing crisis has taken away the Pride of Home Ownership for many Americans. Gone is the concept that home ownership should equal home equity and financial security for your future.

The truth is, a full 25% of those who are granted a 3 month loan modification trial don’t even make the 1st payment.

The only possible solution is Short Sales. The lender loss on a foreclosure is about half of the value of the note in a foreclosure, 30% on a short sale, and when the lender losses are finally tallied on this massive loan modification program, no one is going to believe it or understand it.

We need a whole new deck of cards.