Loan Mods: Must read

[MJ DeMarco]

When Bank of America announced last week that it would begin cutting loan balances for distressed mortgage borrowers, it marked a sea change in the way lenders deal with seriously delinquent loans.

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[Russ H]

Fellow fastlaners:

There is a LOT of info in this article-- stuff I'd never heard about.

Worth a read.

-Russ H.

 

[andviv]

Wow, this is great information...

This same scheme is something I am working with some potential investors in the FL market.

It's been looking very interesting so far...

Thanks a lot for commenting about this, I almost missed it.

 

[Cat Man Du]

"Our clients would rather do a principal-reduction than an interest-reduction workout," said Gagan Sharma, CEO of BSI Financial. "Many bought the loans at discount so they're happy to pass the savings down to consumers."


This is the key.......the servicers were NEVER able to do this before, because they weren't given this authority.
Conventional servicers have been loathe to cut principal because the investors who actually own the loans don't want to accept immediate losses and lenders don't want to encourage more people to press for reductions.

 

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