New stats bear out the benefits of mortgage modification on clarkhoward.com

Mortgage modification has long been a controversial practice, particularly among Clark's listeners.

The idea that you should be rewarded for having fallen behind on your loan -- while someone who is current would not get any break -- has been a very bitter pill for people to swallow.

Now The Wall Street Journal has taken a close look at the numbers behind mortgage modifications. And the results actually surprised the consumer champ.

If the modification is a matter of a lender rearranging your payments or rolling missed payments into a new loan with a higher balance, well, it won't work and the borrower tends to slip back into default. No surprise there.

On the other hand, when lenders actually reduce your monthly payment, roughly 80% of people who were falling behind are able to get current and stay current on their modified loan. That's a stunning finding, according to Clark.

After all, he has a longtime bias against offering a deal to someone who's not paying. But as a practical matter, if you can get 80% of people current by offering a better deal, well, ultimately that's better for neighborhoods, homeowners and lenders alike.

What others are saying

Mortgage modification
Dear Clark and Friends:
Clark I know you do not like the idea of others getting help with their loans. But I will like to present to you a different approach. Clark when you are broke financially and living from check to check all you need is one medical issue or any type of financial emergency to put you over. I know the media calls idividuals like that dead beats but I do not think that is the case. People miss manage money just like our government daily. If our government does not know how to manage it resources and steadily pushes credit to the peolpe to stimulate a falling economy how we expect it to be any different. I know a lot of you never been broke or even forgot what it was like but if the tables was turned and someone called you a dead beat how would you feel. Ever home owner does not get up and say I am not going to pay my mortgage this month so my family could be homeless. Just think about it! That is why your show is so successful, because people need to learn from Clark and not from the government.
Bro. Lentry Vance 715-281-3791
By Bro. Lentry Vance @ 05/22/09 10:45:10 AMreport abuse
Understanding
I too have fallen on tough financial times...lost my job. Unlike many, we have not leveraged ourselves, betting on a fantasy future. Fancy vacations, designer clothes, new cars, boats, plasma TVs, etc...not everyone has everything but most have many luxeries that they can not afford...can not afford meaning they have not yet paid off their homes, have car payments and other debt...and still take a vacation trip! I'm not perfect by any standard - we still owe about 15% of our home's value (refinanced 2 years ago to a 10 yr. payoff), we have a car note - a Corolla...but we put down 50% and have the money to pay it off, we just prefer to keep liquid (in case I...lose my job). I'm not too worried. We have over 12 months of cash (including my car payoff reserve). I'm not at all affluent and now I am on hard times but I will not need a bailout because we have lived below our means, stocked our retirement, and slaved over our rental properties (we owe about 50% of their value). I really want nice vacation trips and I look forward to when we can afford that.

We've been to Mexico and Eurpoe, and a couple cruises...and I should have waited to completely pay off the house first but these were anniversaries and the kids senior trips - can't wait on everything.

I have a nice plasma in our media room - now I have cancelled our satellite service so it will sit until I am comfortable again.

So - I am very flawed and do give in to material pleasures - others do far better then me at exercising their "no" muscles...but I am 45 and will NEVER need "help" or "foregivness" or "charity" due to NORMAL life struggles (illness, job loss, disability, death in the family) these are not extraordinary events...this is life, so be prepared.
By Jeff @ 04/24/09 11:11:20 AMreport abuse
Getting behind
My wife and I bought our dream home five years ago. We were making over $120K a year between us and everything was fine. Then my wifes mother suffered a catastrophic injury and required multiple surgeries. My wife took a leave of absence to care for her mother and when the economy turned, her job let her go. We took a huge hit in household income with no reduction in debt. Then, the fine city for which I have dedicated almost 20 years of my life to as a police officer has decided to take back 10% of my income through furloughs. I am now working three jobs and am rarely home to see my family just to try and keep a roof over their head. Am I a deadbeat? After giving my entire adult life to public service, I do not deserve some consideration in my time of need? I am not asking anyone to pay my bills, I just need a restructuring of the mortgage bill to make it more manageable. But don't worry, no matter how tired I am from my extra, part time jobs, I willstill come running when you have a burglar breaking into your home.
By Trying hard @ 04/24/09 09:16:31 AMreport abuse
Loan Modification
This is nothing more than SOCIALISM.
Re-distribution of assets by a socialist OBAMA and his socialist friends. VOTE and EDUCATE your family and frineds.
By Marco @ 04/22/09 11:07:26 AMreport abuse
Mortgage Modification
See, some people fail to see that it's not always the ones that bought more than they could afford. Or stopped be responsible and making their payments. There are some out there that are victims of circumstance beyond their control. When one's income has taken a drastic hit, even the most affordable house become a burden. So what should they do? Just stop paying and let the bank have it back? Try and sell in a market that, let's be honest, isn't selling? If a loan modification can help that person, who is current but in jeopardy of getting behind, then why not? There are many situations out there. Yes, there are many that bought more house than they could afford just a few short years ago. But that is not the case for everyone. There are many out there who are just as responsible as you but just can't help what has happened to them.
By Wendy @ 04/20/09 03:57:50 PMreport abuse
disabliltiy annuity
is it bad to be getting fers
By julieana @ 04/09/09 09:26:39 PMreport abuse
whats the deal one dept. says it's ok we will rework your mortgage while the other dept. sends you forclosure papers? help
Hi my name is Kevin and here is our dilemma. I was on short term disability for 3 months (half pay) and made arrangements ahead of time with our mortgage company for a 3 month consortium. (Basically not having to make a payment for 3 months.) It actually wound up being 3 1/2 months due to some communication problems. (Them not fully communicating what was expected of us or how the consortium works)

After our 3 months were up, we sent a "workable solution" at the end of Dec. 2008. My wife called the mortgage company several times to try and get the affair in order. A councilor finally returned a call and told us that it would be 60-90 days for them to get to our file and work something out ("adjust the terms of the loan"). The councilor asked if we could make a "down payment" when the terms of the loan were adjusted. We said yes and we have actually been making payment. However the money we have sent in is in their "holding" account and is not being applied to our loan.

Today we received a certified letter from our counties common pleas court, it is a "complaint in foreclosure". Again my wife tried to call and get to the bottom of this. The mortgage company basically said that the foreclosure department is different from the collections department is different from the "workable solutions" department. It doesn't seem fair that while we are waiting for someone to contact us to "adjust the terms of the loan", the mortgage company has gotten their lawyer in on it, threatening foreclosure and costing us more money. We have to respond to the complain within 28 days. (I'd like to respond by telling them the Citimortgage are idiots and that their right hand doesn't know what their left hand is doing!)

What are my options and is there anything we can do that we aren't already doing? (My wife says she'll be calling the mortgage company everyday until something is worked out...the squeaky wheel) Will I have to respond to the complaint if we get this situation resolved with the mortgage company within the next few weeks?

Thank You

Kevin and Anna...
...frustrated in Ohio
By robert @ 04/09/09 03:01:07 PMreport abuse
Response to "THIS WILL NEVER BE OK"
I understand your frustration (I too am responsible with my finances), but doing the wrong thing is never right. Our true value of self, and of personal integrity, is not found in our government processes. It is found in the spirit of our truth, and our personal, and faithful relationship with our Lord. And... (reputable) charitable organizations should not suffer unnecessarily for the wrong doing of others. As Christians we are instructed to have compassion, and to share our blessings in life with those less fortunate and in need. There are many people and credible organizations out there serving others honorably, and at great sacrifice. Please don't limit us with this kind of thinking. "Right is Always Right. It never changes."
Healthy Blessings Always,
The Chuck Sarratt Cancer Foundation, Inc.
By Lisa Dittman @ 04/09/09 01:03:13 PMreport abuse
loan mod
I am so ticked off by this as well. It doesn't pay to be someone who bought a condo within my budget 3 yrs ago at 180 and now cannot refi as my home would only sell for 130 now. I am making all my payments because of what I purchased, but am penalized for being able to do so. This is such a crock. It makes me want to move out of the US.
By kelli @ 04/09/09 11:53:07 AMreport abuse
This will never be ok
As a honest American who pays his bills i can never forgive or forget this. the day my country punished me for paying my bills. This practice is a sham and no matter how you spin it is discrimination against people who pay there bills on time. I will.l never give another dime to charity and i will never support another government program. The government has made on thing clear, paying your bills on time is a bad idea and will only hurt you in the long run. I know, all of us who are current, lets all go past due, that way we can show them that we mean business and we matter to.
By Jaded @ 04/08/09 09:03:57 PMreport abuse

Mortgage modification

Dear Clark and Friends:
Clark I know you do not like the idea of others getting help with their loans. But I will like to present to you a different approach. Clark when you are broke financially and living from check to check all you need is one medical issue or any type of financial emergency to put you over. I know the media calls idividuals like that dead beats but I do not think that is the case. People miss manage money just like our government daily. If our government does not know how to manage it resources and steadily pushes credit to the peolpe to stimulate a falling economy how we expect it to be any different. I know a lot of you never been broke or even forgot what it was like but if the tables was turned and someone called you a dead beat how would you feel. Ever home owner does not get up and say I am not going to pay my mortgage this month so my family could be homeless. Just think about it! That is why your show is so successful, because people need to learn from Clark and not from the government.
Bro. Lentry Vance 715-281-3791

By Bro. Lentry Vance @ 05/22/09 10:45:10 AMreport abuse

Understanding

I too have fallen on tough financial times...lost my job. Unlike many, we have not leveraged ourselves, betting on a fantasy future. Fancy vacations, designer clothes, new cars, boats, plasma TVs, etc...not everyone has everything but most have many luxeries that they can not afford...can not afford meaning they have not yet paid off their homes, have car payments and other debt...and still take a vacation trip! I'm not perfect by any standard - we still owe about 15% of our home's value (refinanced 2 years ago to a 10 yr. payoff), we have a car note - a Corolla...but we put down 50% and have the money to pay it off, we just prefer to keep liquid (in case I...lose my job). I'm not too worried. We have over 12 months of cash (including my car payoff reserve). I'm not at all affluent and now I am on hard times but I will not need a bailout because we have lived below our means, stocked our retirement, and slaved over our rental properties (we owe about 50% of their value). I really want nice vacation trips and I look forward to when we can afford that.

We've been to Mexico and Eurpoe, and a couple cruises...and I should have waited to completely pay off the house first but these were anniversaries and the kids senior trips - can't wait on everything.

I have a nice plasma in our media room - now I have cancelled our satellite service so it will sit until I am comfortable again.

So - I am very flawed and do give in to material pleasures - others do far better then me at exercising their "no" muscles...but I am 45 and will NEVER need "help" or "foregivness" or "charity" due to NORMAL life struggles (illness, job loss, disability, death in the family) these are not extraordinary events...this is life, so be prepared.

By Jeff @ 04/24/09 11:11:20 AMreport abuse

Getting behind

My wife and I bought our dream home five years ago. We were making over $120K a year between us and everything was fine. Then my wifes mother suffered a catastrophic injury and required multiple surgeries. My wife took a leave of absence to care for her mother and when the economy turned, her job let her go. We took a huge hit in household income with no reduction in debt. Then, the fine city for which I have dedicated almost 20 years of my life to as a police officer has decided to take back 10% of my income through furloughs. I am now working three jobs and am rarely home to see my family just to try and keep a roof over their head. Am I a deadbeat? After giving my entire adult life to public service, I do not deserve some consideration in my time of need? I am not asking anyone to pay my bills, I just need a restructuring of the mortgage bill to make it more manageable. But don't worry, no matter how tired I am from my extra, part time jobs, I willstill come running when you have a burglar breaking into your home.

By Trying hard @ 04/24/09 09:16:31 AMreport abuse

Loan Modification

This is nothing more than SOCIALISM.
Re-distribution of assets by a socialist OBAMA and his socialist friends. VOTE and EDUCATE your family and frineds.

By Marco @ 04/22/09 11:07:26 AMreport abuse

Mortgage Modification

See, some people fail to see that it's not always the ones that bought more than they could afford. Or stopped be responsible and making their payments. There are some out there that are victims of circumstance beyond their control. When one's income has taken a drastic hit, even the most affordable house become a burden. So what should they do? Just stop paying and let the bank have it back? Try and sell in a market that, let's be honest, isn't selling? If a loan modification can help that person, who is current but in jeopardy of getting behind, then why not? There are many situations out there. Yes, there are many that bought more house than they could afford just a few short years ago. But that is not the case for everyone. There are many out there who are just as responsible as you but just can't help what has happened to them.

By Wendy @ 04/20/09 03:57:50 PMreport abuse

disabliltiy annuity

is it bad to be getting fers

By julieana @ 04/09/09 09:26:39 PMreport abuse

whats the deal one dept. says it's ok we will rework your mortgage while the other dept. sends you forclosure papers? help

Hi my name is Kevin and here is our dilemma. I was on short term disability for 3 months (half pay) and made arrangements ahead of time with our mortgage company for a 3 month consortium. (Basically not having to make a payment for 3 months.) It actually wound up being 3 1/2 months due to some communication problems. (Them not fully communicating what was expected of us or how the consortium works)

After our 3 months were up, we sent a "workable solution" at the end of Dec. 2008. My wife called the mortgage company several times to try and get the affair in order. A councilor finally returned a call and told us that it would be 60-90 days for them to get to our file and work something out ("adjust the terms of the loan"). The councilor asked if we could make a "down payment" when the terms of the loan were adjusted. We said yes and we have actually been making payment. However the money we have sent in is in their "holding" account and is not being applied to our loan.

Today we received a certified letter from our counties common pleas court, it is a "complaint in foreclosure". Again my wife tried to call and get to the bottom of this. The mortgage company basically said that the foreclosure department is different from the collections department is different from the "workable solutions" department. It doesn't seem fair that while we are waiting for someone to contact us to "adjust the terms of the loan", the mortgage company has gotten their lawyer in on it, threatening foreclosure and costing us more money. We have to respond to the complain within 28 days. (I'd like to respond by telling them the Citimortgage are idiots and that their right hand doesn't know what their left hand is doing!)

What are my options and is there anything we can do that we aren't already doing? (My wife says she'll be calling the mortgage company everyday until something is worked out...the squeaky wheel) Will I have to respond to the complaint if we get this situation resolved with the mortgage company within the next few weeks?

Thank You

Kevin and Anna...
...frustrated in Ohio

By robert @ 04/09/09 03:01:07 PMreport abuse

Response to "THIS WILL NEVER BE OK"

I understand your frustration (I too am responsible with my finances), but doing the wrong thing is never right. Our true value of self, and of personal integrity, is not found in our government processes. It is found in the spirit of our truth, and our personal, and faithful relationship with our Lord. And... (reputable) charitable organizations should not suffer unnecessarily for the wrong doing of others. As Christians we are instructed to have compassion, and to share our blessings in life with those less fortunate and in need. There are many people and credible organizations out there serving others honorably, and at great sacrifice. Please don't limit us with this kind of thinking. "Right is Always Right. It never changes."
Healthy Blessings Always,
The Chuck Sarratt Cancer Foundation, Inc.

By Lisa Dittman @ 04/09/09 01:03:13 PMreport abuse

loan mod

I am so ticked off by this as well. It doesn't pay to be someone who bought a condo within my budget 3 yrs ago at 180 and now cannot refi as my home would only sell for 130 now. I am making all my payments because of what I purchased, but am penalized for being able to do so. This is such a crock. It makes me want to move out of the US.

By kelli @ 04/09/09 11:53:07 AMreport abuse

This will never be ok

As a honest American who pays his bills i can never forgive or forget this. the day my country punished me for paying my bills. This practice is a sham and no matter how you spin it is discrimination against people who pay there bills on time. I will.l never give another dime to charity and i will never support another government program. The government has made on thing clear, paying your bills on time is a bad idea and will only hurt you in the long run. I know, all of us who are current, lets all go past due, that way we can show them that we mean business and we matter to.

By Jaded @ 04/08/09 09:03:57 PMreport abuse

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Apr 08, 2009 -- New stats bear out the benefits of mortgage modification

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