46% of modified home loans under the government HAMP program (2009) are re-defaulting. On top of this, 38% of the modified home loans made in 2010 are also defaulting again. Are these numbers encouraging for investors looking to cash in on great deals?
According to coverage by Bloomberg, the Treasury and related agencies don’t really seem to know why these defaults are occurring on such a regular basis.
One source has acknowledged that lenders are often blamed for losing modification paperwork and miscalculating payments, with many continuing to pursue the foreclosure process. This means that there are many U.S. homeowners that could seriously use some help.
Subsequently, these re-defaulting borrowers only make up a portion of those that need assistance. Many might not be approved for the short sale process if they have defaulted on modification agreements in the past.
From an investor standpoint, there are plenty of ways to acquire these homes. Auctions and bank owned REOs are a great place to start. Those who do may even be provided a chance to help the respective homeowner.
One of the great win-wins, for each party, can be acquiring the mortgage notes. Investors who do so can modify the loan to help homeowners and then flip or hold the property.
There is a lot of money to be made from foreclosure properties, short sales, and note buying. However, even more valuable, is the good that those flipping property can do for bailing out individual homeowners in distress.
