Pay to stay
The NY Times published this article today outlining a “pay to stay” plan that some lenders are beginning to implement. The idea is that lenders identify which of their loans are at greatest risk of going into foreclosure not because of financial inability to pay but because the borrower has elected to walk away from their home on pure economic grounds (i.e. the house is so far underwater it doesn’t make sense to keep it). The lender then pro-actively contacts the homeowner and offers a financial incentive for them to remain in the home and continue to make payments. The financial incentive is typically a cash payment made in the future. This idea is pretty interesting to say the least. I hope my lender contacts me with such an offer…..