Mary Kladde
60% of loan modifications are back in default within 90 days of modification inception. This is a published statistic. Why is this? Have the statisticians figured it out the answer yet?
Maybe, just maybe…this is a theory…but I was thinking….When modifications are made, the lenders should re-qualify the borrowers, check for fraud, and run compliance?
What does this mean?
It means…pull their credit…verify their income…complete a fraud check… complete a compliance check. Make sure the borrower’s can actually make the modification payments and the property is in a good position. Are we doing this when modifications are made?
I know there dozens, maybe hundreds, of small loan modification cottage businesses that have sprung up all over the country to meet this need. But, are they really serving the borrower? Or is it a bunch of brokers, that have converted their businesses during these challenging times? And, is it the borrower who can’t afford it getting stuck with the bill again?
Why aren’t the lenders being more proactive? Taking the bull by the horns. Maybe if they did, CRAMDOWNS wouldn’t be on the table today?
