Minor modification in accounting rules may hult foreclosure rate
By: Dean Konstantine
A simple solution to the mortgage crisis is in the works as Congress asks the SEC to write an opinion letter on the accounting rules which prohibit lenders from modifying current mortgage contract once they are in hedge funds. This rule only allows companies to modify the loan contract 30 days after a foreclosure has occurred.
The SEC now states it would be allowable for a lender to modify a mortgage contract if it appears imitate the home is going to foreclosure. Of course they have left sufficient gray area so they can pounce on someone if they wish, but there opinion letter does open the door a crack so those friendly lenders wishing to try to help a borrower out of the jaws of foreclosure could.
No one knows where things will end up but one thing is curtain, we are in for a wild ride for at least a few months. Even so, there are still real estate deals that make sense for people who have available assets for small cash investment with substantial monthly income.
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