[quote=sdrealtor]Nearly all the loan mods out there start around 2% for 5 years and then go up a 1% a year until reaching todays current low interest rate whatever it is at the time of the mod.
He didnt sell the house because he weanted to keep it and could afford it. The divorce was several years ago and he was doing fine until he lost his job. FWIW many of the divorcing couples I know have one spouse hold onto the house particularly when there are school age children. Thats usually what divorcing couples in upper middle class communities do in CA.
The lender didnt subsidize his divorce settlement as it was about 5 years before he lost his job. He had plenty of equity and refied out her portion. He could easily afford the house after that in his prior career. He didnt relocate either and I never said he did….[/quote]
So, let’s just get this situation straight here. Your “friend” has $1000 positive cash flow on a voluntary rental (“biz investment”) because his lender essentially “forgave” $80K? of his mtg (the remainder of his “cash-out” refi, 2nd TD or HELOC that he used to settle his divorce). Since he had “plenty of equity” before the divorce, had he not removed any of it, he wouldn’t have been underwater, correct?
And your friend is free to live in the property himself (with his “school-age children??”) but due to his generous “mod,” it is now much more lucrative for him to rent it out and keep the change every month, correct??
So his $1000 month “net rental income” originated from the interest rate reduction along with debt forgiveness of $80K?
Where can Piggs sign up for this program??
It sounds like this friend of yours not only got $80K of his divorce settlement paid for by his mtg lender but he wasn’t “upper middle-class” enough to “hang onto” the family home for his “school-age kids.”
