Modified mortgages: Lenders talking, then balking
Thursday, September 13th, 2007Congress, banking regulators and President Bush all are promoting a potential way for subprime borrowers to avert foreclosure. Called loan modification or loan workout, it means changing a mortgage’s terms to make the payments more affordable.
Mortgage lenders have publicly embraced the concept, saying they care about “home ownership preservation” and will work to prevent foreclosures. A “loan mod” might involve freezing the interest of an adjustable-rate mortgage, for example - perhaps setting payments at 8 percent instead of letting them soar to 11 percent.
But consumer advocates say it appears that few modifications are actually occurring, and lenders refuse to provide any data to show how common the practice is.




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