About the Hope For Homeowners Program... Are Lenders Game?

Steve Preston, Secretary of the Department of Housing and Urban Development (HUD), recently stated that lenders are "required" to make mortgages more affordable under the Hope for Homeowners program. But are lenders really game for the change?

I have been hearing more and more that lenders are becoming harder and harder to work with. Clients aren't getting through to the correct departments, workout proposals are increasingly denied, and short sales are a thing of the past. What would entice a lender to actually agree to a workout proposal?

In truth, a bank loses 25-40% of the value of a home if the property goes into foreclosure. The fees expended through foreclosure proceedings alone are enough to persuade a lender to participate in the program. Even though the program is short-term and may only assist a handful of people, lenders should use this opportunity to assist the homeowners who reach out to restructure loans to more affordable payments so they can continue their financial obligations.

This creates a win-win for homeowners who qualify and lenders who participate. Families get to stay in their homes, and lenders get the payments those homeowners agreed to.