[Jesse L]

...principle balance on there loans for modification?

[admin]

I have had a few that we worked that have had some of the principal reduced to current market value. It does not happen every day but if it can be done we will push for it in order to make the payment for a homeowner more manageable.

[Al in NC]

Lower PRINCIPAL balance?Why should they do that?I think it would be EXTREMELY generous on the bank's part if they even agreed to lower the interest rate or extend the length of the loan to lower monthly payments.

[meggy]

I have not heard of this happening but I suppose its definitely possible. I guess it would depend on the situation and also the bank's policies.

[elite]

It's very rare to get your principle reduced, however it can and has been done. Depending on who is negotiating the terms of the loan modification actually makes a difference.
Sometimes an attorney can get the mortgage company or lender to reduce the payment by negotiating for the payments to be made on a reduced balance, yet the borrower still owes the full balance if they were to sell the house. Sometimes the balance can be reduced permanently or temporarily, it really just depends. Their are numerous options available to home owners to afford their homes, yet sadly the lender will only give them one or two that is usually still unaffordable. To be honest, a temporary reduction in principle makes more sense financially for the bank than a foreclosure, but nothing they are doing right now makes any sense. And then they go to the government asking for a bailout when all of this could be avoided. It just doesn't make sense does it?

[admin]

don't kid yourself the investor determines whether or not a principal reduction can be done. It has no weight whether you use an attorney or a less expensive loss mitigation firm if the Pooling and Servicing Agreement allows for a principal reduction than it will be done. Like you said they are few and far between.

[rainelli]

that is not easy to do,you have to deal and negotiate carefully to the last point,however this may prove that you're company is really credible in doing this...