drunkle, milk the ones who can pay and are least likely to resist. Why not? That’s just business as usual.
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patient, if we’re talking about lenders providing relief to the borrowers in trouble, then those with 30 years fully amortized loans, can be refied with interest-only or Option ARMs. They could go with 10-year interest-only with 20 years fully amortized. That will give them a 10 year reprieve to get their finances in order. They can also refinance again in 10 years.
Those with exotics are up the creek, I’m afraid. Banks might allow those borrowers to skip a couple of payments and have them added to the principal. But if a borrower can’t afford the exotic payments today, will they be able to afford them a couple months from now? The lenders will just kick the can further down the road, which they might well do in order to keep-up the paper profits so execs can collect bonuses; and to try to avoid paying the hedge funds on bad loans for now.
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Good point capeman. It’s possible that a 50 years mortgage could stretch things a little more.
But I think that the housing gamblers already went with Option ARMs in order to leverage to the max.
