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Wednesday, February 17, 2010

Canadian Mortgage Broker News - U.S.-based firm pays borrowers to pay their mortgage

Canadian Mortgage Broker News - U.S.-based firm pays borrowers to pay their mortgage

U.S.-based firm pays borrowers to pay their mortgage


Lately some borrowers in the U.S. have been considering walking away from their mortgage, even if they have a means to pay it.

Some say it's a rational decision when you owe more on your mortgage than the home is now worth.

New Jersey-based Loan Value Group LLC has come up with an incentive to keep those payments coming, however. In a press release today, the company says it is launching the Responsible Home Owner Reward program where it will pay a cash reward to borrowers if they agree to keep paying their mortgage.

That amount they will pay varies on income, negative equity, geography and other risk factors.

"RH Reward is the only program of its kind in the mortgage industry, and its structure and incentive-based design are unique," says Loan Value Group CEO Howard Hubler. "There is no cost to the borrower whatsoever, yet the homeowner receives the full benefit of the reward."

He says it is "by far" cheaper and simpler than any other loss mitigation strategy.