[quote=sdrealtor]Here’s a new story from the field about a shadow inventory house. I have never heard one like this but when I hear one I gotta beleive there are others. It’s a true story and some posters will write it off as a realtor fabrication but its not. I do not have the exact details but what i have is close enough. I was floored and still am. I was actually out partying last nite with a regular Pigg poster who can cooberate it.
I bumped into an old client who tried but failed to sell his house a couple years ago because he couldnt get what he wanted/needed. He had an extended period of unemployment and refi’d into a neg am Option ARM just under 600K about a year before he tried to sell. He neg am’d up to around 700K and it recast. He couldnt afford the payments so he stopped paying. He approached the bank for a loan mod and went back and forth for about a year. He owed almost 700K plus another $50K in missed payments. He was willing and ready to walk if the bank foreclosed. Out of nowhere he got contacted by the bank with an offer. New loan for about $490K and a sub 5% 30 yr fixed rate. Thats a principle reduction of about $200K plus forgiving a years worth of interest payments.
Oops there goes another shadow inventory house, oops there goes another…….[/quote]
I’ve heard similar stories, and totally believe it’s being done, but with the stipulations others have mentioned about the “forgiven” balance (and fees and interest???) remaining until the sale or transfer of the house, at which time it will all come due.
Either way (total forgiveness or deferment), I hope they are prepared for defaults reaching 50% levels or higher. What kind of fool would be making full payments on his mortgage when all the idiots are getting this kind of gift from the taxpayers. I’m assuming the govt/taxpayers are propping up the bond side of these deals because we haven’t heard much lately about bond holders not receiving payment on their loans (or have I missed some news?).
