First, the residence must be owner-occupied. The borrower must be no more than 30 days late on his or her mortgage payments and have a FICO credit score of 660 or less. The loan must have been originated in January 2005 to July 2007 and have an initial reset date of January 2008 to July 2010. Also, the borrower must have less than 3% equity in the home.And then they include an example where the borrower will pay ~$28,300 less per $100K of loan for the 30 year loan with the freeze, assuming they are paying P&I.Or in other words the bank gets ~$28,300K LESS per $100K of loan for the 30 year loan.Are a lot of lenders going to buy into this?And of course we can surely assume they are most likely a large percentage of interest only loans.And the instigators of this apparently didn’t read this article (courtesy of gary_broker, not sure if it has been in another thread) http://finance.yahoo.com/real-estate/article/103872/Real-Estate:-Buy,-Sell,-or-Hold;_ylt=AoYhL5ognSwCfrwaIJ3.KbC7YWsAwhich uses the rental ratio concept analysis to predict that anyone w/o any equity in their house now (see less tna 3% to qualify above) is sure to be way underwater in 5 years when it is time to reset! Bingo! Almost guarantees they all get foreclosed because they can’t refi then w/o equity!
