Mortgage Rate Forecast: Lender offering extra carrot to struggling homeowners - Las Vegas mortgage borrowers hoping to join in soon

The government has burned the midnight oil for months in an effort to help distressed homeowners deal with mortgage payments they can't afford and possibly find a way for them to stay in their homes. HAMP, or Home Affordable Modification Program, and other similar programs haven't really produced the results they were designed for, though. It is also almost single-handedly running the massive mortgage market today, pumping sufficient liquidity into it that in turn has kept interest rates record low. Despite its pro-active programs it can't do it alone. It needs the private home loan industry to play ball, which it simply hasn't done.

Lately the private mortgage brotherhood has given some indications that it's willing to shift gears, as it obviously is learning the hard way it really should do so. For instance, when a foreclosure claims a home it often gets thrashed inside and outside. Appliances, cabinets of all sorts and other equipment also tend to slide right out the door. To bring the property back to normal for resale can quickly become an expensive endeavor.

CityMortgage just kicked off an experiment that will offer wayward homeowners who can't qualify for loan modifications incentives to make their eventual exit venom-free. For starters, it'll allow some distressed mortgage borrowers to continue living in the house for an extra six months without any payments so long as they voluntarily give up ownership, called deed in lieu of foreclosure in the legal world. The program also dangles $1,000 or more in relocation costs once the move-out time comes, sometimes called cash for cooperation or cash for keys. The property has to be kept in its present condition, is the stern requirement from CityMortgage. For now it'll only be good in a handful of states.

Nevada is not among them. Especially distressed Las Vegas mortgage borrowers would like to see anything that could help come their way. In fact, it's a bit surprising that the pilot program doesn't include Southern Nevada, for here if anywhere the mortgage and real estate calamity has flared tempers against the banking sector and something like this would ease those hard feelings. True, some mortgage lenders presently have the cash for keys going on in Vegas, but since the problem is so widespread much more is needed.

If CityMortgage's initiative proves halfway fruitful for everybody, then it's reasonable to assume that other home loan providers will jump in with their own projects. Who knows how much this type of thing will help, but at least it's an adjustment in the right direction.