Much as many feel that the housing downturn is just getting started, I say with equal confidence that the loss mitigation machine is just getting warmed up.
So what?
Think it through. They’ll be able to offer you a couple extra months to get on your feet after a job loss, other than that, nobody is going along for the ride.
It’s simple, the bulk of the loans out there are not going to default because of a job loss, medical illness, but for one very simple reason, they can’t afford the payment at market rate for their loan amount.
It’s even worse, they can’t afford to make the interest payment on the loan if they got the government T-bill rate.
What they can afford is something that charges about $300 for every $100,000 they’ve borrowed a month. They have a $450,000 magic loan that is letting them pay $1350 a month, the boogeyman is coming and wants his $3000 a month. This game is over. Nobody is letting the little Casey Frauderboys squat with their $700,000 if they aren’t getting their $4500 a month anymore.
Scummy deals are still being made though the lights coming on and the kitchen floor is covered in roaches that are about to get stomped.
