But keep in mind, that’s not what the post addressed. It says that the lender “requires” divestiture of the retirement account. That’s just BS. The lender will present a number of demands, maybe some cash, bringing property taxes current, maybe paying off some credit cards, and maybe divesting all or a portion of a retirement plan. What borrowers attempting a loan modification must keep in mind is that each and every one of their “demands” are negotiable. And depending on the circumstances, though lenders will NEVER acknowledge this, the borrower may have all the leverage.
Sometimes liquidating a retirement plan will be a horrible idea. But sometimes, not so much. If a borrower happens to have their credit intact, and has maybe $10,000 in a retirment account, and the lender is offering a significant write down of the principle loan amount, it might be worth it. But if that retirement account has $100,000 in it, or credit is already ruined, or the write down just isn’t all that much, it just doesn’t make any sense.
