The new government program seems to be working but one has to look at the long term success. Fitch Ratings Ltd. forecasts that borrowers whose loans are modified under the federal Home Affordable Modification Program, or HAMP, are 65 percent to 75 percent likely to re-default within a year.
Fitch says the failure rate is high because borrowers have too much other debt, including car loans, credit cards, and other obligations. (Source: The Wall Street Journal, James R. Hagerty (06/16/2010)
While I’m a short sale specialist in MN, I also help people evaluate their personal finances. Sometimes a loan modification is better option than a short sale but this takes some analysis by both the realtor and the homeowner. NEVER get pushed into a short sale but be prepared to HONESTLY review your financial situation. I’m here to assist you with the best information and knowledge so you can make the best decision.
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