In the midst of all the foreclosures there have been nearly half a million loan modifications done. The success is right around 40%, which is good although we would really like to see it get higher. The only way it would get higher is if banks aggressively solicited modifications instead of waiting for borrowers to get to them. It seems that the families are having to make the first move these days, no matter how deep in they are in the loan.
It has been said that the average cost per modification is a little over $50k. Where does this figure come from? The figure is simply a part of what goes into doing a mortgage modification, and includes everything from the people hired to do the job, to the filing of paperwork, the fees that the bank would eat and some other miscellaneous costs. It sounds like a lot per loan, but let’s face it, we can’t have families put out on the street. The families should have gotten help extended to them in the first place, but there was no real solution in place. Ever see the movie “It’s a Wonderful Life”? That says it all.
-Mayer Dallal
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