First Trust Deed Principle Reduction at CHASE … Yes!

(Disclaimer:This is not legal advice it is for informational purposes only)

If you had asked me two weeks ago if a 1st Trust Deed principle reduction was possible at Chase, I would say NO WAY. Now having underwritten a permanent modification with a principle reduction (albeit a principle set aside with a good faith three year forgiveness clause) I’d say maybe you have a shot. The odds are very low but it is possible. 1 in 20 or less at this time but ask us in a month and they will change possibly upward.

We’ve been able to negotiate these clauses into other modification offers in the past, but this is the first one we’ve been able to get at Chase. B of A unfortunately is going in the other direction and trying as hard as they can to foreclose on properties.

This hopefully is the wave of the future as 12 million homes are upside down in value. 1.5 mil are about to be foreclosed on 3.5 mil are in default. Valuations are not coming back and now I think the Banks may be smelling the coffee. They cannot foreclose on 12 mil homes, things are bad, really bad, but that would cause a complete collapse of the real estate market – its that big. If the average home is upside down $100,000 times 12 mil that is…. 1.2 trillion. If these problems cause another 15% decline in values that could be another 5 trillion drop in national values. 6.2 trillion is almost the size of the national debt. This is a big big problem.

In any case, for one homeowner in one city their lives have been changed forever. Having $200,000 removed from their note, buying them some equity and a very low payment – is life changing.