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Loan Mod Vs Short Sale...

posted Feb 18, 2013, 9:18 PM by Aaron B Lewis   [ updated Feb 18, 2013, 9:18 PM ]
Why keep the debt by doing a loan modification when the banks (depending on your market) will accept a discount on the mortgage balance of  30-90% and forgive the difference. 


It must be knowledge and disbelief.

 In Detroit MI USA banks will accept a 90% discount on the mortgage balance and forgive that 90% which means the debt is gone forever.

Example: Existing mortgage balance $100,000, the bank will accept $10,000 and forgive the $90,000.

Outside of Detroit in the suburbs the discount % gets lower but still a 70% discount in Southfield, MI, 30-60% in every other neighborhood still means a short sale does "A LOT MORE" to your debt-to-income ratio and overall debt load.

So given the right circumstances loan mod vs a short sale is a no brainer.