How the Loan Modification Fiasco of 2010 will lead to More Foreclosures in 2011

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Here is how the Loan Modification Fiasco of 2010 will lead to More Foreclosures in 2011. According to the latest report from LPS, the largest loan servicer in the country, 7043348 homes are at least 30 or more days late on their mortgage. At the same time, according to government reports, only 519648 loans have been permanently modified to a lower new payment through the government’s MHA HAMP program. To make matter worse there are only 156408 active trail modification left nationwide. And from April 2009 and the end of August 2010, 3.73 million modification arrangements were started. So the Loan Modification process has been an epic failure so far. With 7 million people not payout their mortgage with little hopes of receiving a permanent solution to their loan crisis, foreclosures will rise in 2011. And when you combine this with the low likelihood that the congress and the federal government will authorize another multi-billion dollar bailout for the big money center banks, more of the huge shadow inventory will need to be sold in 2011. This huge spike in must sell real estate, will drive prices lower in 2011. And lowering interest rates further will have very little affect on increasing buyer demand as interest rates are already at historic lows. This is why we recommend not hanging on for the housing market to recover you are underwater. Use the process to rebuild your family’s financial well being, save for the future, and prepare to reenter

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