Loan Modifications Difficult to Secure Despite Foreclosure Moratoriums

By Kyle Chezum Updated on 10/26/2010

As banks wrestle with the public, the law, and the federal government over claims of fraudulent foreclosure and wrongful evictions, it might be expected that mortgage loan modifications would increase as banks try to recoup as much money as possible.  This has not been the case, however.

September was the lightest month for loan modifications ever recorded, with just 28,000 permanent modifications provided.  The National Consumer Law Center has concluded that foreclosures actually make banks more money than loan modifications, as counter intuitive as this may seem, and this is giving banks an incentive to foreclose rather than modify loans.

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