Foreclose, Short Sale or Modify?????

Ever since the foreclosure/mortgage crisis began I have had clients ask .....

"Why won't the bank work with me and reduce my payment. The house isn't worth what I paid and they're going to loose more money by throwing me out!"

I agreed, and could tell them nothing that made any sense of it.

Here's a piece of an article I read......someone woke up I guess.

Maribel Carrillo is one of the new, happy-ending stories for bank regulators who hope to stem the foreclosure pandemic by modifying delinquent mortgages in bulk.

Carrillo, 32, lost her $150,000-a-year job managing a record label in Los Angeles earlier this year. With her family’s construction business sputtering, she and her husband soon fell behind on their home loan on their four-bedroom ranch home in Los Angeles. After missing three payments, the Carrillos owed $9,800 on their mortgage with IndyMac Bank. But after the Federal Deposit Insurance Corp. seized IndyMac, the bank agreed to modify Carrillo’s loan, dropping her monthly payment from about $3,000 to about $1,600 for five years. Under the FDIC’s orders, about 4,000 IndyMac borrowers have been given more affordable mortgages so far. By this weekend, the bank expects to have sent out more than 15,000 modification offers to borrowers, who are saving $430 a month on average.IndyMac’s efforts, which are designed to save the FDIC money by curbing losses on foreclosed homes, are being closely watched nationwide. In fact, Bank of America Corp. is taking a similar approach with newly acquired Countrywide Financial Corp. as part of an $8.4 billion, 12-state legal settlement reached this month.And now some Congressional Democrats and state officials say the FDIC’s approach should be replicated as the Treasury Department buys billions in troubled mortgage debt as part of a $700 billion financial industry bailout.“The country is in crisis,” said Iowa Attorney General Tom Miller. “This is something that everybody should do.”