You know, loan modifications should be a legitimate alternative to foreclosure or short sale for homeowners who can't afford their payments, yet want to stay in their house. Alas, the world does not work as it should - especially when the government wants to "help".
I'll skip the stats for now and illustrate a comment that came from a senior manager at a local non-profit, community housing organization. In our discussion she mentioned that the majority of people seeking foreclosure relief help simply didn't qualify. Those that did had to endure painfully long waits that could stretch over a year. Finally, the majority of those that were approved just ended up defaulting on their payments again - sometimes within months and dropped out of the system.
The sad thing is that the majority of these folks will go into foreclosure. These homeowners tried hard to do what the banks and the government wanted them to do but were let down. "Wouldn't it be great" ideas dreamed up in Washington don't work (and waste LOTS of money) when they try and tell the market what to do, or how the market should work.
Best advice if you are in a situation where you are facing a potential foreclosure is to look into all of your options. Please don't assume that one magic program will be the cure to all that ails. Especially when it comes from Washington...
Check out this article for a little further color
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