The rapid decline in home values has pursed many lenders into changing their business practices. Historically a lender would always be willing to work with their existing client base and offer pricing incentives to keep their business. This is no longer the case, as lenders look to reduce their exposure to bad loans and improve their capital ratios they have worked to take riskier loans off of their balance sheet. This is especially challenging for home owners who have jumbo loans and higher risk mortgages. These customers previously may have been able to contact their loan servicer and request to extend their arm terms, switch to a fixed rate or reduce the number of years they have left on their home loan. These options have all but been eliminated. The major reason is lenders want a new appraisal and verification of a borrowers qualifications. In addition, the secondary market for jumbo loans and loans with reduced qualifications is non existent and the new applicants are likely to see mortgage rates that are significantly higher than a conforming loan. In the future these loan options could resurface as lenders examine their books of business, but the real estate market will need to improve before these loan modifications become main stream..

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