Lifeline for those underwater

Lifeline for those underwater

If you give millions of seriously underwater homeowners a new equity position in their properties by reducing their principal mortgage debt, will they keep paying on their loans and avoid foreclosure?

Call it a pipe dream or a significant model for other lenders and investors, but one company says it has found an important combination: Modify underwater borrowers’ loans so that their payments are reduced to a manageable amount, cut their principal debt over time but make the deal totally dependent on their scrupulous on-time monthly payments of the new amount plus sharing of a portion of any future profits they make on the house sale.

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