[quote=sdrealtor]I dont necessarily disagree witrh analyst either. I have no access to the loan docs and was not party to that transaction. Whatever happens to the balance is irrelevant in this conversation about shadow inventory because this one was ripped out of that category.
For him, the interest rate was lowered by a few % and the amount he was paying on was reduced by over 30%. HIs payment is less than 1/2 of what it was and will stay there indefinitely. For the owner, its an awesome home (a dream home if you will) that he gets to keep living in at a price well under rental value with a nice tatx deduction to boot. What renter would turn down a rent reduction and news that their rent was now tax deductible? Oh yeah, the rent you didnt pay last year….just forget about it.
My other comment was in reference to his definitive statements of what would happen “if” we only knew what the govt would do.[/quote]
IANAL nor do I play one on the Internet. But it seems to me that such a loan mod if it doesn’t include the “hidden” language for the missing $250K to suddenly become real again at a sale or appreciation (things go back to full retard crazy) would trigger some sort of IRS action. Basically in my currently beer-ed state, that person was handed a $250K gift. It’s no different than a short sale in my misguided opinion. He might have dodged a foreclosure bullet but did he just step into the path of an IRS audit grenade?
