With home values declining significantly, we are debating about whether it is an acceptable practice to require additional collateral as a condition of doing a loan modification/workout?
Our bank has never engaged in sub-prime lending, and we also don't have any crazy ARMs out there that are readjusting; however, we are still faced with a few calls a day from consumers that simply can't afford to stay in their homes. It doesn't appear to be motivated by payment shock from ARMs that have readjusted - it just appears to be a combination of other economic factors.
I've reviewed the "Mod in a Box" and other resources that have been issued by the regulators, but I don't see anything on this particular idea.
Thoughts? What are other banks doing out there right now?