[quote=sdrealtor]Except when they get some principal and past payments forgiven accompanied by a below market interest rate (2% for the next 5 years, then 3% in year 6, 4% in year 7 and capped at 4.5% in year 8) that makes staying in their house significantly cheaper than renting like a friend of mine got up in OC. Please stop speaking in absolutes that are patently wrong.[/quote]
sdr, why don’t you tell us how much your “friend in OC” currently owes on their mortgage? How much of their mortgage was “forgiven” and how much is his/her property currently worth?? Is their mortgage capped at 4.5% for ALL years after year 8 (assuming they stay with the program that long)??
What is their current PITI (+ HOA dues, if applic) and what will their property rent for in the condition it is currently in??
Your borrower has to LAST on the “plan” you describe here. Underwater FB’s have typically been living off the “equity” in their homes. In addition, they have been squatting and not making any payments since the “serial cash-out” refi/HELOC party abruptly ended.
What makes you believe that your “friend in OC” can last 8 years on his “mod program??” And do you think he/she will EVER acquire any equity in “their” property??
