Real Trends: “A California company has announced the launch of a patent pending program that allows homeowners to defer anywhere from three to 36 months of their mortgage payments, regardless of the lender. The company is currently seeking brokers to market this program, coined 12 Month Deferral or 12MoDef, throughout the country beginning in 2007.”
Yeah, no payments at all… that should solve the problem!
It sounds like a ridiculous idea/gimmick. Who knows how much they would charge in fees. If someone wants to spend the equity in their house for some reason, wouldn't it be easier to set up a HELOC?
This program uses your home’s equity to make the mortgage payments. There’s no deferral at all. You’re putting your equity into a trust account, so you have to refinance to set up the trust account, right? Or take a HELOC. Then the trustee makes the monthly mortgage payment out of the trust account.
This is not going to help the people who truly need it, those who cannot afford their payments and have no equity. People with equity can do a cash-out refi or get a HELOC.
This sounds expensive,as the trustee is sure to get paid his fair share.
Good question, PS. The borrower (formerly known as “homeowner”) is already screwed, so his benefit is that he gets the illusion of keeping “his” house a little longer. The people selling this product get to pocket some nice fees, paid by the FB (“Frustrated Borrower”, hey, this is a family forum!). The lender/bank situation is not affected, they get to lose money anyways over a bad loan.
[/sarcasm off]
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