Really, in effect, anyone doing a loan mod most likely is on the verge of walking or foreclosure. If the bank foreclosures, it is for sure a “new” low comp that people will use as a marker when purchasing a neighboring house.
But if the government allows everyone to do a 4.5% loan AND banks reduce the principle on a house, how could you justify purchasing a house based on a comp 2 years ago for 700k if the bank reworked it to 500k.
I just don’t think it will be accurate to use sales comps at that point. The bank, in effect, is indirectly saing the house is not worth 700k.
Edit: As far as blowing the whistle on landlords getting mods that are supposed to be owner-occupied, I’ve seen some that have gotten owner-occupied loans they shouldn’t have gotten in the first place.
These investors aren’t even getting a slap on the wrist. It would not shock me to see them get breaks that are just intended for owner-occupied. The system is broken.
