Quote:
Originally Posted by Smittie61984
Hey Einstein did you read this part???
Reduced rate of interest which means a loss of money for the bank. Perhaps if the bank assumed they would give out a loan with a smaller percentage rate they wouldn't have given the loan in the first place. She agreed to a percentage and should have paid it. If she can't then it should be up to the bank (and not some snooty judge) on wether they want to accept less money.
I don't see the "Win-Win" there. If you loaned a buddy $100 and they said they were only going to give you $90 back, then you'd be pissed off as hell.
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Foreclosure is a very costly process.
The bank is responsible for legal cost associated with the foreclosure.
They become responsible for all taxes owed once the foreclosure process begins.
They lose revenue from the halt of principle and interest payments
Once they do get the deed to the house they have to deal with the effect a foreclosed home has on market value, meaning one foreclosed home on the block automatically brings the value of surrounding homes down as well as the market value of the home.
they have to pay for upkeep and bringing the house up to a sell-able condition.
They have to pay whatever real estates broker cost to get the house on the market.
As a reminder...they are not receiving any money for the property during this period. From the first missed payment to sale of the home can take over a year.
Once it is accepted that the homeowner will not be able to catch up but will be able to pay under new terms it is a win win situation to work with the homeowner.
The only good that comes out of a foreclosure is the deal the next buyer gets. Everyone else losses big time. The homeowner is out of the home and loses any equity in the home, neighbors lose as there equity takes a hit from the foreclosed house and the bank can lose anywhere from 40 to 80cents on the dollar.