In order to complete a loan modification your lender will "require" you to miss payments, yeah, even if you can make them, then you will find your credit score begins to be negatively affected it may be by 50 points or as many as 300 points. In the end the modified loan that you get, will NOT be BETTER than your current payment. I have seen dozens of loan mods, NEVER, was the balance lowered, and NEVER was the payment better, and 92% of loan modifications end up completing a short sale or go through foreclosure within 12 months of the first modified payment, or maybe you can be like my a past costomer of mine, who worked with his bank instead of doing a short sale, did the loan mod, made three payments, and the bank refused the 4th payment and put the house in FC again and they are lossing the house even though they played by the rules the bank asked for in the loan mod.
As far as the morral issues with a Short Sale, you need to see what a write for WSJ, says about that. If the voice of the business world says its ok, I can agree. http://online.wsj.com/article/SB10001424052748703795004575087843144657512.html?mod=WSJ_Real+Estate_LeftTopNews
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