It seems that mortgage lenders are actually finally dealing with South Florida’s disastrous housing situation.  Today, the region ranks as one of the top metro areas vis-à-vis mortgage modifications. Ever since the Home Affordable Modification Program (HAMP) began back in 2009, a staggering 46,032 trial/permanent modifications have been approved in the following counties to date: Broward, Miami-Dade and Palm Beach.

But the question is, what’s the fine print?  Do these modifications really help, and, if so, how much?  Over 92,000 have been attempted in South Florida, which indicates that approximately 50 percent of them have failed.  Still, that means half have worked and since before the settlement was established one could only pay lower interest rates and add years on to the mortgage in a modification, today, there are more choices, which ultimately provide much better relief as lenders are offering more realistic and helpful assistance to homeowners, such as mortgage balance forgiveness.

What this means is, that homeowners become more motivated.  They see that they are being offered something real – the loan modification is going to actually help them.  One example was of a lender “forgiving” $112,000 in principal for a client who was paying approximately $4,000 per month on an underwater mortgage (whereby the property is worth less than what they are repaying).  As well, a slashing of bank interest rates from 7 to 2 percent, reduced the monthly payments further to $2,300.

It thus looks like there is a far greater grasp of reality on what people can afford which seems to be the most sensible way of assisting the present housing crisis in South Florida.