One of my acquaintances from college lately moved to Chicago and found a job at a local bank in the loan section. One of his first duties was to manage a loan modification. Chicago had a prosperous real estate sector until recently; so many homeowners could no longer yield their loan payments. One of my friend’s clients was puzzled seeking to resolve between a loan modification and a short sale. He did not know the divergence, so my friend had to inform his client about the departures. Before the client could make a conclusion, he had to settle if he wanted to stay in his home or if he wanted to sell his home.
If he wished to sell his property, then he had to seek short sale help. A short sale would assist him to protect his credit score and sell the property. The client would be best served if he took an attorney to help him with the short sale proceedings. The bank would move to meet with the attorney and negotiate a final sale cost. Once this measure is finished and the client signed all of the paperwork, the client is absolved of the debt. They do not have to care about any debt or the bank suing for the remaining funds on the mortgage. The bank will search for a purchaser for the home, but the former owner fronts no more problems with their previous home.
If the client wanted to hold on to his home, then he would need to seek a loan modification. A loan modification would adjust the loan to fit the payment capabilities of the borrower. In this case, the loan could be prolonged to a forty-year loan, or the loan payments could be cut by the bank. There are variable ways for the bank to do this. One recommendation by our President has been that banks trim monthly mortgage payments to 30 percent of a family’s monthly income. This makes the loan payments more pragmatic, so it is easier for the client to pay off his mortgage. Through the assistance of my friend at the bank, his first client was able to go through a loan modification and he was able to stay in his home. He did look into short sale help, but the loan modification presented a stronger end result.
