Because of the sudden crisis in the economy of the country, the present government has directed the lenders to make their loan flexible in rates and time of repayment so that common people get relieved for some time. This process is called mortgage modification and the lenders actually try to modify the existing loan in regards to installment amount and time duration. There are some mortgage lenders who don’t agree with this because they do not want to compromise with their high rate of interest. The sufferers are the homeowners and investors who are facing foreclosure as its number has been stated as maximum in past few decades.
The fact is that not only the homeowners but also the lenders have to face losses. The homeowners loose their house and the lenders have to compromise with the profit that they might have got or have to give away the property even below the present market value of it. At present situation loan modification seems to be good and only option for both borrowers and lenders as well. This is expected to bring a subsequent rise in the financial status of millions of people and hence will help uplift the country’s economy too in the long run.
Also there is a concept behind the many minds that mortgage modification is a temporary solution and is only designed to postpone foreclosures. This is also one reason why lenders are eager to sort out the problem as soon as possible and some are even putting pressure on the borrowers for immediate foreclosure. They want to minimize their losses and are trying to free up their 7 options for borrowing money and when to use them, which seems to be clogged without wasting any time. At present the loan modification process is quite slow but it is expected to get going very fast soon.