Further employment hardship is the main reason why so many borrowers are finding themselves going back into default, and it is this reason that is causing an increase in the number of people who are finding themselves in this very situation. For all those people who have had a change in employment at least once, they are now starting to find themselves in that very same situation yet again, and this is prompting them to request another mortgage modification.
The problem they face is that they are already in a position of negative equity, and because they were struggling to make their payments in the first instance, they are now finding that the same problem has arisen yet again. Therefore, because of this the motivation to keep their home is far less than that of someone who is faced with losing their home for the very first time.
Unfortunately, borrowers who struggle to keep up with the repayments on their mortgage, even after having their first loan modification approved, find that their home is now worth far less than it was originally worth, and that it is going to take them years to pay back their mortgage. Then once the realization of not being able to sell the house for a profit finally sinks in, giving up almost seems like the better option.
That is why when a homeowner applies for a loan modification for the first time, they must make sure that they understand exactly what it is they are agreeing to, and are able to keep up with the repayments. As unfortunately, lenders will see the borrower as a high risk and a second loan modification is generally rejected.
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