I think the 1st responder to this article missed the point. Loan Mods may not even be necessary for most of these folks. It sounds that by lowering the Fed Funds rate to 0 they may have helped dodge this bullet. So even at the low teaser rates under 2% alot of these loans were not negatively amortizing. That is a stunning development. Borrowers paying 1.5% rates are effectively over paying. LOL….who woulda thunk it.
“Few OAs are currently near the 115% negative amortization threshold, since the steady decline in MTA (to its current 0.48%) has allowed most OAs to positively amortize even when minimum payments are made.”
It also mentions that once they do adjust the payment shock would be minimal so the only real danger is for those who suffer loss of employment. I am stunned if this is accurate as I beleived this was one of the real shoes that could drop. Government manipulation at its finest.
