[quote=sdrealtor]nsr,
It should be a win for everyone. In 5 years his income situation should be stabilized, he will have caught up on the consumer debt acquired during his layoff and he will rebuild his reserves. This is a pretty responsible guy rather than someone who lived off his house like an atm. I dont know what percentage of the distressed homeonweners fall into his category but its important to recognize there are people like him out there. Around here you would think every one of them had it coming and that no one who goes beyond 6o days late will ever return to paying their mortgage without defaulting.[/quote]
Yes, I said maybe awin for your friend because I didn’t know how the payments are compared to income. That’s the big question in most mods, front end DTI.
31% is a hefty front end DTI.
If that is at 2% interest, then hopefully his income will rise to make it a lower DTI at 4.75% interest.
Also, there is the other portion as you mentioned, the interest rate is being used as a temporary make the payment work, principle reduction if necessary.
So as long as the payment is low enough and the modded principle is not leaving them upside down still, then they’re winning.
If the house was only worth $300K today, would it still be winning?
