Homeownership is a big part of the American Dream. However, nearly one in four homeowners is underwater on his mortgage. A record 2.9 million properties got notices of default, auction, or repossession in 2010 and banks seized more than one million homes.
Loan modification programs were meant to save the housing market, but have not been successful primarily because of the bank’s refusal to work with homeowners. I find this perplexing since there are benefits to lenders in a mortgage loan modification. Foreclosures are costly and time-consuming to the lender. A foreclosed property frequently declines further in value due to neglected maintenance and vandalism.
Finally, there may be some evidence that banks are embracing the idea of helping homeowners in trouble. Read more http://www.smartmoney.com/personal-finance/real-estate/new-options-for-underwater-homeowners-1301075928064/ (Article from Smart Money, AnnaMaria Andriotis).