Modification Madness

[evolusd]

I have a ‘friend’ who bought a 4/3 2,500-sf track home in Murrieta for $600k in 2007 (overpaid just after the local peak) with 30-year fixed 100% financing from GMAC.

Now the home is worth $300-$350k. They’re income is down as a large portion is commissions. They went to GMAC requesting a lower rate for a while to help them continue to afford the payments, but GMAC refused.

They went back to GMAC a few months later as their income continued to deteriorate. This time GMAC told them they qualify for some government program (I’m assuming Hope Now) and they can reduce their mortgage balance from $600k to $300k AND lower thier rate. They weren’t sure what impact it would have on their credit.

So my assumption is the government (using OUR money) is going to make GMAC whole and basically ‘gift’ $300k to my friend? Can this be true? Will they have to pay taxes on this gift?

I’m kicking myself for being financially RESPONSIBLE for all these years.

[UCGal]

I agree it’s frustrating to do the right thing and get nothing, yet see people who made stupid choices get benefits. Very frustrating.

As far as your “friend’s” credit… according to an article this past weekend, loan mods have the least hit to the credit score.

http://www.latimes.com/classified/realestate/news/la-fi-harney13-2009sep13,0,4002454.story

[UCGal]

I agree it’s frustrating to do the right thing and get nothing, yet see people who made stupid choices get benefits. Very frustrating.

As far as your “friend’s” credit… according to an article this past weekend, loan mods have the least hit to the credit score.

http://www.latimes.com/classified/realestate/news/la-fi-harney13-2009sep13,0,4002454.story

[UCGal]

I agree it’s frustrating to do the right thing and get nothing, yet see people who made stupid choices get benefits. Very frustrating.

As far as your “friend’s” credit… according to an article this past weekend, loan mods have the least hit to the credit score.

http://www.latimes.com/classified/realestate/news/la-fi-harney13-2009sep13,0,4002454.story

[UCGal]

I agree it’s frustrating to do the right thing and get nothing, yet see people who made stupid choices get benefits. Very frustrating.

As far as your “friend’s” credit… according to an article this past weekend, loan mods have the least hit to the credit score.

http://www.latimes.com/classified/realestate/news/la-fi-harney13-2009sep13,0,4002454.story

[UCGal]

I agree it’s frustrating to do the right thing and get nothing, yet see people who made stupid choices get benefits. Very frustrating.

As far as your “friend’s” credit… according to an article this past weekend, loan mods have the least hit to the credit score.

http://www.latimes.com/classified/realestate/news/la-fi-harney13-2009sep13,0,4002454.story

[Diego Mamani]

“Now the home is worth $300-$350k”

I think that’s still grossly overpriced. If the house would rent for about $2500/month, sales price should not be much higher than $250K.

I know, this is an OT remark, but couldn’t help myself. A new guy in my office (west San Fernando Valley) is about to pay close to $500K for a small house that wouldn’t fetch more than $2000/month in rent. He doesn’t want to lose his $8000 tax credit, I guess (duh!)

[Diego Mamani]

“Now the home is worth $300-$350k”

I think that’s still grossly overpriced. If the house would rent for about $2500/month, sales price should not be much higher than $250K.

I know, this is an OT remark, but couldn’t help myself. A new guy in my office (west San Fernando Valley) is about to pay close to $500K for a small house that wouldn’t fetch more than $2000/month in rent. He doesn’t want to lose his $8000 tax credit, I guess (duh!)

[Diego Mamani]

“Now the home is worth $300-$350k”

I think that’s still grossly overpriced. If the house would rent for about $2500/month, sales price should not be much higher than $250K.

I know, this is an OT remark, but couldn’t help myself. A new guy in my office (west San Fernando Valley) is about to pay close to $500K for a small house that wouldn’t fetch more than $2000/month in rent. He doesn’t want to lose his $8000 tax credit, I guess (duh!)

[Diego Mamani]

“Now the home is worth $300-$350k”

I think that’s still grossly overpriced. If the house would rent for about $2500/month, sales price should not be much higher than $250K.

I know, this is an OT remark, but couldn’t help myself. A new guy in my office (west San Fernando Valley) is about to pay close to $500K for a small house that wouldn’t fetch more than $2000/month in rent. He doesn’t want to lose his $8000 tax credit, I guess (duh!)

[Diego Mamani]

“Now the home is worth $300-$350k”

I think that’s still grossly overpriced. If the house would rent for about $2500/month, sales price should not be much higher than $250K.

I know, this is an OT remark, but couldn’t help myself. A new guy in my office (west San Fernando Valley) is about to pay close to $500K for a small house that wouldn’t fetch more than $2000/month in rent. He doesn’t want to lose his $8000 tax credit, I guess (duh!)

[an]

[quote=Diego Mamani]
I think that’s still grossly overpriced. If the house would rent for about $2500/month, sales price should not be much higher than $250K.[/quote]
Really? $250k for a place that would rent for $2500/month? $250k @ 4.5% w/ 20% down = $1013/month mortgage. Even with FHA @ 6% and 3.5% down, you’re still looking at $1450/month. Has there ever been a time where it’s 40-60% cheaper per month to buy vs rent?

[an]

[quote=Diego Mamani]
I think that’s still grossly overpriced. If the house would rent for about $2500/month, sales price should not be much higher than $250K.[/quote]
Really? $250k for a place that would rent for $2500/month? $250k @ 4.5% w/ 20% down = $1013/month mortgage. Even with FHA @ 6% and 3.5% down, you’re still looking at $1450/month. Has there ever been a time where it’s 40-60% cheaper per month to buy vs rent?

[an]

[quote=Diego Mamani]
I think that’s still grossly overpriced. If the house would rent for about $2500/month, sales price should not be much higher than $250K.[/quote]
Really? $250k for a place that would rent for $2500/month? $250k @ 4.5% w/ 20% down = $1013/month mortgage. Even with FHA @ 6% and 3.5% down, you’re still looking at $1450/month. Has there ever been a time where it’s 40-60% cheaper per month to buy vs rent?

[an]

[quote=Diego Mamani]
I think that’s still grossly overpriced. If the house would rent for about $2500/month, sales price should not be much higher than $250K.[/quote]
Really? $250k for a place that would rent for $2500/month? $250k @ 4.5% w/ 20% down = $1013/month mortgage. Even with FHA @ 6% and 3.5% down, you’re still looking at $1450/month. Has there ever been a time where it’s 40-60% cheaper per month to buy vs rent?

[Author]

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