[quote=dd123]I’d love to live in a million dollar house provided someone else pay mortgage part although I can only afford a $600K
who would not want this kind of deal ?[/quote]
dd123, in a mod, no one is paying part of the borrower’s mortgage. They simply get their interest rate reduced, more years added to their mortgage, or both. The entire amount (incl any deferred interest) will become due and payable when the fat lady finally sings (when they finally sell and a lender demand is sent for by escrow) :=]
A borrower can get a deal comparable to this by renting. When they give a deed in lieu of foreclosure early on, an underwater borrower begins healing their credit from that day forward. There is no guarantee that an underwater borrower (who is currently eligible for a loan mod and agree to its terms) will be able to sell in the foreseeable future and still cover their closing costs with the proceeds. Therefore they are prolonging the pain (of waiting out the damage to their credit) by agreeing to a mod today in order to continue living in a property in the future that they can’t afford (and likely have never been able to afford).
