Five Reasons Banks would rather Foreclose

Image by Getty Images via @daylifeEver wonder why don't banks just reduce the monthly payments or the amount of a loan instead of taking the home and selling it to someone else at a reduced price. This question is ask frequently by homeowners facing foreclosure or are upside down on their mortgage. 

Professor Jack Guttenberg, a mortgage columnist writes for Inman news. Guttentag believes that lenders have been too stingy when it comes to reducing loan balances. Private lenders have offered loan reductions only sparingly, he says, and Fannie Mae and Freddie Mac not at all.

Here's the professor's take on why homeowners can't catch a break on loan reductions and stay in their homes.

His five reasons discussed are:

1. Buck stops Here!
2. Banks are in the business of making money.
3. In this economy, you will likely default anyway.
4. Banks are short-staffed and the staff they do have is untrained.
5. Mortgage insurance works against you.  

Obtain a mortgage and get back $4000 to cover closing costs

Image via WikipediaJust got an emailed from a mortgage broker stating "we will be continuing are special of a 2% lender credit for all clients that apply for an FHA mortgage and are approved.  For example if 'your client' borrows $200k we will give them $4000.00 toward closing costs! At the same time we are able to offer a very low rate in the low 4's. So far our clients have loved this offer and told us that no other lender that they have shopped with can touch this offer.