Lenders are Willing to Save Money By Supporting Loan Modification

May 2, 2010 - PRLog -- Lenders have become open to the loan modification industry. This is due to how lenders can work with losing less money by modifying a loan than with have to go through the difficult foreclosure process that can cost the lender money.

Many people like to believe that a mortgage loan lender is one that can be willing to put someone into foreclosure because of how the lender will want to collect its money. After all, the money that can be involved in a mortgage can be exceptionally high.

This is not the case though. In reality a lender will actually want to keep a person from getting into foreclosure. In fact lenders are becoming interested in getting into loan modification services for a variety of clients. This comes from how using loan modification services can help to get a lender to save money.

A typical lender will end up losing a massive amount of money on the foreclosure process. This is due to a variety of factors. First the lender will lose money due to the lender not being able to collect the monthly mortgage payments that it needs to collect. After evicting the homeowner through foreclosure the lender will lose the ability to collect the remaining principal on the mortgage. The interest that came with the mortgage will also be lost. This can be worth tens of thousands of dollars.

In addition to this the foreclosed property will be put up for public auction. The value that the property can go up for can be substantially less than that of what the property was originally worth.

As a result a lender will end up losing tens of thousands of dollars on a property due to foreclosure. It is estimated by the Congressional Joint Economic Committee that a lender will end up losing approximately eighty thousand dollars on an average foreclosure.

The expenses that come with the process have helped to get more lenders to support loan modification services and to deal with companies that work to prevent foreclosures from happening. Although lenders will end up collecting less money the losses that they might have to deal with will be substantially reduced.

In many cases the losses that a lender will deal with will come from things like a reduced interest rate. In other cases it might be due to minor reductions in the interest or principal of the mortgage that is owed. Either way the losses will be substantially lower. The same Congressional Joint Economic Committee report mentioned earlier states that an average lender will have to pay about three to five thousand dollars on average to work with loan modification services.


The 1st Foreclosure Prevention Company is a national company devoted to helping people around the United States with saving their homes from foreclosure. Loss mitigation and negotiation services are used to help with getting creditors to work with new mortgage plans. All services from the company are from professionals that can work with different foreclosure laws that can work in different states.

Visit us at: http://www.1stforeclosureprevention.com