Good News in Mortgage Modifications

Is there only bad news when it comes to the mortgage industry? Fortunately, there are some great stories of people being helped.

If you listen to the news in the mortgage industry, you might think everything is doom and gloom. From the fact that there are not enough buyers to buy the available homes on the market to statistics showing that mortgage modifications have only helped a fraction of the people they were meant to help, it’s tough to think that there is good news. But there is.

A recent expo in Sacramento, California was held to help troubled homeowners with their mortgages. It was part of the “Save the Dream” tour which is organized by the Neighborhood Assistance Corporation of America, or the NACA. These expos are being held in various places throughout the country to help people modify their home loans so they have a better chance of making their monthly payments by making them more affordable.

Shari Lewis of Elk Grove, California is one of the many people who have received help from this most recent loan modification expo. She attended the expo and was able to modify her loan and make the monthly payments much lower than they are now. She and her family moved into their current home in 2001 and found themselves struggling to make payments just a few years later. But the NACA expo has given her family renewed hope because they can now make the payments on their five-bedroom suburban home.

The NACA is a nonprofit organization that is funded by the federal government. In recent months, it has helped thousands of people reduce their mortgage payments by as much as $1,000 a month.

Another happy attendee of the expo was Althena Peet. She was so happy that the NACA was able to reduce her payments by more than $1,200 per month that she jumped up and hugged the lending counselor in tears who worked with her at the expo.

Of course, there are critics of the NACA and what it is doing. Some homeowners who have similar mortgage payments but make their payments on time each month despite their financial struggle are often not eligible for a reduction on their payments. This leaves many to question if the mortgage expos are fair to those who actually do everything they can do to make their payments. According to Paul Habibi, a professor at the UCLA Anderson School of Management, this is unfair because it “penalizes those who play by the rules, and those who are in dire need and may have not played by the rules and got into mortgage they can’t afford, are not able to get some help.”

How do you feel about this situation? Do you think it’s good that so many people are receiving the mortgage help they need? Or do you agree with Professor Habibi and think it is unfair to those who pay their bills regardless of the sacrifice? Let us know your thoughts below.

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  • Samuel

    November 08, 2010

    I think the Sacramento Mortgage market is just fine. Problem is, as this article identified, a lot of people are so nervous about the economy, they often quit making payments in favor of other bills. Since when is a mortgage NOT the most important payment?

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