Earlier this year the Loan Value Group introduced a special incentive program for homeowners who continue to make their monthly mortgage payments. The program targets the strategic default which is the process when borrowers who actually have the ability to make their mortgage payments seize doing so because their home is under watter and they are trying to get their bank to approve a modification or a short sale. This has a negative impact on the borrowers credit history but many homeowners today are making this tough choice. Strategic defaults account for about 25-30 % of the loans currently in default nationwide.
The program is free of cost for the homeowner and it doesn't change the conditions on his mortgage. Here is how this program works:
~ qualifying homeowner is presented with initial responsible homeowner reward amount
~ homeowner needs to make their monthly mortgage payments on time in order to keep the reward status active
~ for a fixed period of time additional amounts will be added to the initial reward amount for each month the homeowner maintains active status
~ Once and ONLY when the mortgage balance is paid in full either by the sale of the home, refinance or paying off the mortgage, the homeowner is entitled to the reward funds.
Many factors are taken under consideration when qualifying homeowners. Negative equity, income, geography and number of other factors are reviewed when determining the reward amount which is typically 8-10% of the original loan amount. I know, that could be a substantial amount. That is exactly what I thought when I first read about the program and that is why I made the call to Loan Value Group.
In my opinion this program will be a Win-Win for everyone involved in the mortgage process as it aligns the interests of borrower, lender, mortgage insurers, investors, even state and local municipalities.
To learn more about the program, please visit their official website.
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