Not kidding – a friend of mine was three months behind on his mortgage. His lender called him & mentioned that they noticed he was 3 months behind in payments. They told him they had a solution. Here’s what they did (and this is amazing):

• They forgave half of his back debt, wiping it out completely and they said that they would add the remaining debt onto the back of his loan. This effectively brings his loan current as in, no longer behind!

This is, as The Donald would say, “hUGE”. Why would a lender do this? Believe it or not – it makes a lot of sense in the long run. Ultimately it could help stabilize property values. The lenders are protecting their investments by preventing mass foreclosures. More foreclosures will further erode property values by infusing more fear and uncertainty in the housing market.

The rising foreclosure rates are what triggered the sub-prime market collapse. Foreclosures started creeping up, Wall Street didn’t like this so they stopped paying a premium for these loans. Suddenly lenders who had made loan commitments were left holding the bag because they couldn’t sell their current bundle of loans. So these lenders started dropping like flies. Worse yet was the impact all of this has had on the national real estate markets. Housing markets nationwide are in a state of paralysis or an all out free-fall. No one wants to buy a home only to have it worth fifty thousand dollars less next year. So the last thing the markets need is more bad news about rising foreclosure rates.