On the re defaults of current modifications this is what the banks want you to believe that modification won’t work, however what they don’t tell you is that their modification departments are collection agents first, they want you to get caught up on you payments within 4 months so if you are behind 2 Mortgage payments of $2000 a month, thats $4,000 they want back asap and they spread this over your next 4 payments so your new payment is $3,000 a month over the next 4 months so you can get caught up. This is the worst thing the banks could do and they wonder why the customer can’t keep up with their payments. Hey Geniuses if the customer has trouble making his current payment, how is he or she going to keep up with your new payment which is 50% higher.

Banks are not thinking past the next 6 months, they are not structuring modifications for the next 3-5 years, in most cases they are not lowering the interest rate and the biggest reason is a customer will always walk away from an asset that is $100k underwater and sinking deeper every month. Even Suze Orman says when your underwater to this extent give the house back and wait the 4 years and rent. Banks are going to have to do a lot more to save themselves and housing at the same time.