It’s a lovely surprise to get in the mail from your bank, a letter telling you they’re going to cut your mortgage balance in half while increasing your interest rate slightly. NYT reports that tens of thousands of option-arm mortgagors, homebuyers with a loan that had a low introductory interest rate that shot up after a set period, have been getting such letters from Chase and Bank of America over the past year.

It seems the banks have realized that the cost of processing even more foreclosures is greater than the pain of modifying these mortgage loans.

But what’s maddening is while, without being asked, the banks are adjusting loans for folks they deem at-risk of default, many more who are actually defaulting or are close to foreclosure are unable to get the banks at all to secure a mod. They appear to be applying the rules in a haphazard and contradictory fashion, happy to put one best foot forward while shooting the other off.

Have you gotten an unexpected loan mod notification in the mail from your bank?

Big Banks Easing Terms on Loans Deemed as Risks [NYT]

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