[quote=spdrun][quote=bearishgurl][quote=spdrun]Or banks will quietly make existing loans assumable, as was done in the 1980s.[/quote]
spdrun, lenders cannot do anything other than what is already written in the original note, nor can their successors (other lenders down the line who purchased these notes). Virtually zero conventional loans made since about 2002 had any assumability provisions in them. [/quote]
Sure they can. It’s called a loan modification. Principal modifications are frowned upon. But any other term is fair game with the consent of the mortgagee.[/quote]
What’s in it for a lender to do this when their loan will be paid off upon sale? Why would a lender want to keep a 3-4% mortgage on their books when they can make a new 7% and up loan on the open market?
If you’re speaking of a “loan modification” to a new buyer in a “short sale,” these beleaguered tech workers would have to sacrifice their good credit in order to exit their property in the bay area. Most of them would ostensibly have way too many “assets” to qualify for a short sale. Lenders want and need to be “cashed out” in a short sale, however little that may turn out to be.
