A guy I know of just got a $200k principle reduction in OC

[ctr70]

After not making a payment for almost 2 years and all the while collecting rent on a high end house, this guy in OC gets a $200k principle reduction & a 40 yr fixed loan modification at extremely low rate.

Gotta love how the U.S. works these days. If your a deadbeat and don’t pay your bills you get all these wonderful handouts and goodies. But if you pay your bills, you don’t get s**t. What a wacky world we know live in today. And you know this is all government influenced.

[scaredyclassic]

The squeaky wheel which probably has a bad bearing and definitely needs new tires gets the grease.

[HenryPP]

I’m not going defend the morality of it, but think of it from the bank’s point of view. Maybe the property had dropped in value even more than $200K. You said it’s a “high end house” in OC, which probably means over $1 million. Maybe it was worth $1.5 million when the loan was made, and it’s only worth $1 million now. So it might have been worth it for the bank to save what they could out of the debacle, eating a $200K loss rather than a $500K loss (or more, with all the costs of foreclosure). Like I said, I’m not arguing the morality of it, just the business sense.

A guy I know used that argument to get a $130K principal reduction on a 2nd mortgage. And he had never even missed a payment. His credit got banged up a bit, but he sleeps better at night.

[svelte]

[quote=ctr70]After not making a payment for almost 2 years and all the while collecting rent on a high end house, this guy in OC gets a $200k principle reduction & a 40 yr fixed loan modification at extremely low rate.
[/quote]

Are you saying he got a principle reduction on a house he’s not even living in?

[ctr70]

Yes it’s a rental.

[ctr70]

No the servicers are doing it more from Government pressure from all the state attorney generals regarding the robo-signing issue, etc.. than they are from a business decision IMO. I’m OK with banks doing this if it is their own business decision. I’m NOT OK with the Government intervening in any way and forcing principle reductions and loan mods.

IMO the whole robosigning thing has been overdone and has just given the Gov a reason to force & pressure the banks to a settlement (more principle reductions and loan mods)…yes the banks should get penalized for handling paperwork improperly, but NOBODY was getting foreclosed on that was making their payments!!! I just don’t think the banks penalty should be reducing principles of deadbeats not making their mortgage payments, people who made dumb financial decisions to buy properties they couldn’t afford, and people who did cash out refis at the peak to buy the hummer and the boat.

[ctr70]

How about we band together and everyone in the U.S. with a mortgage stop making our mortgage payments so we can all get a principle reduction and a 3% 30 yr fixed?

[Huckleberry]

[quote=ctr70]How about we band together and everyone in the U.S. with a mortgage stop making our mortgage payments so we can all get a principle reduction and a 3% 30 yr fixed?[/quote]

I personally don’t own yet, but I do know two separate couples (one in Vegas and one in Pacific Beach) that did just that.

They saw others getting loan mods and principal reductions, so stopped making payments and fabricated stories of distress. The PB couple got a $200K principal reduction and loan mod on a $800K (purchase price in 2006) condo one block from beach. The Vegas couple got no love from bank, so just mailed the keys back on a house purchased for $275 in 2005.

It’s like the banks are more willing to help out the higher value owners and give the finger to the lower value ones.

[Author]

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