…Their home, meanwhile, which was originally valued at $585,000, had depreciated severely in three scant years. It was now essentially worthless at $270,000. . .
A family that only had three days until eviction last July, now has a new, 40 year contract. Although the bank didn’t agree to a principal reduction—very few banks agree to a principal reduction nowadays—they extended the terms of the contract by 15 years and lowered the interest thus making the monthly payments affordable and reasonable. My clients were paying nearly $4,100 a month on a ludicrous 8.095% interest rate. Their current payment is now $2340/month with a 2% interest rate. The interest rate will cap at 4.35% on the 8th year and remain for the remainder of the contract…
(emphasis added)
I am just failing to see how these borrowers have actually been “helped.” Is “HAMP” really the be-all and end-all for borrowers like this (bought with NINA mtgs in 2007)? Sacramento is a fairly cheap county to rent/buy in. Wouldn’t these borrowers have been better off letting their property go back to the 1st TD holder and then either renting it back from them or renting another house?
IMHO, HAMP is a “ripoff” and only benefits the lender(s). Why throw so much taxpayer money at it? Just foreclose and get it over with so all affected persons can start their respective “clocks” ticking sooner.
Piggs, you gotta ask yourself – how are these borrowers “better off” now??[/quote]
BG,
The HAMP program — and all the other programs and bailouts that were purported to “help homeowners” — were designed specifically to help banks from the very beginning. It was ALWAYS about saving the banks, not the numb-skulls who overpaid and over-HELOC’ed during the bubble. The PTB focused on the “helping homeowners” part because that was the only politically viable way to convince taxpayers (at least the less intelligent ones) to fork over trillions of dollars in bailout money and guarantees to the financial industry.
