Part 8/12:
An often-overlooked aspect of housing finance is the impact of mortgage modifications. Recent policy shifts limit homeowners to only one loan modification every two years, requiring them to demonstrate three consecutive months of timely payments. This can lead to higher borrowing costs for those who seek to renegotiate their loans, as modifications now reflect market rates rather than preferential ones from the initial loan.
This change could increase default rates and foreclosures in the medium term, as borrowers find themselves locked into higher interest payments. It emphasizes the importance for prospective buyers and existing homeowners to understand the long-term implications of mortgage restructuring.