I know of several people who bought using exotic loans.
One woman bought with initial payments of $900. Now her payments are $3200 (so she tells me). How can she afford the place? Not possible to lower payments $900 or even $2,000.
Forgiving 20% of a mortgage might be maximum that can happen and that would depend on income restriction and giving up future equity in the house so that the house becomes permanent income-restricted housing. The debt forgiveness will come at a cost to the homeowners. There’s no free lunch. How long will it take the Federal Gov’t to start such program and then provide grants for local housing agencies to work out the mortgages? 1 year minimum.
If I were in that situation, I’d rather walk, take the bad credit and start over. Why continue to pay ownership premium on house that will not appreciate because of deed restrictions?
How would people feel about having their houses tagged as “welfare housing”? Another way would be for the FBs to take on silent second mortgages that will need to be paid off in full w/ interest when the house is sold.
