Modification Madness

[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?

[(former)FormerSanDiegan]

An – please stop those darn reality checks.
It is easier for us to project recent losses over the past 4 years into the future.

[(former)FormerSanDiegan]

An – please stop those darn reality checks.
It is easier for us to project recent losses over the past 4 years into the future.

[(former)FormerSanDiegan]

An – please stop those darn reality checks.
It is easier for us to project recent losses over the past 4 years into the future.

[(former)FormerSanDiegan]

An – please stop those darn reality checks.
It is easier for us to project recent losses over the past 4 years into the future.

[(former)FormerSanDiegan]

An – please stop those darn reality checks.
It is easier for us to project recent losses over the past 4 years into the future.

[temeculaguy]

The 300k is not a gift, it’s not free, it’s a temporary stay of execution. Let’s say they have a 3 year or a 5 year mod. If values increase in that time (or after that time), if they want to sell in that time, if they want to refi in that time if they want a heloc in that time, if they want to do anything other than just pay the rent(you can call it a mortgage I guess) then the 300k kicks back in. It doesn’t accure interest, I guess it’s not as bad as a neg am, but it’s damn close. I also agree that over 300k was too high a few months ago, but it’s bounced off bottom a bit, probably closer than you think. If it were to get repo’d it would cost gmac a year of no payments, lost interest, leagal fees, processing fees, back taxes and back hoa. In the end, they’d probably get close to mid to high 2’s and probably net only 200k after all is said and done. So they rig the payement to get them to stay, only lose a little a month on the lost interest for the 300k, and down the road they will recover more than the 200k, maybe get all their money back, a little chip in from the govmt, like 15k towards the interest (not sure what hope4homeowners pays the lender these days).

The riddle is, they are not on a path to ownership, at then end of this loan they don’t own the home. What do you call money tht you pay that does not go towards eventual ownership, equity and you will not partake in the appreciation? Hint: it rhymes with DENT!

However if their new payment is on par with current rents and they do get to deduct their payment, it makes sense to stay as opposed to walk away as long as they can do it and they have no chance at buying one accross the street anytime soon, which would allow them to rest their basis.

So don’t get mad at other peoples mods, if saw the actual terms, if it were an actual loan you could get when buying, you wouldn’t want it, just like you didn’t want a neg am, I/O, option arm special.

[temeculaguy]

The 300k is not a gift, it’s not free, it’s a temporary stay of execution. Let’s say they have a 3 year or a 5 year mod. If values increase in that time (or after that time), if they want to sell in that time, if they want to refi in that time if they want a heloc in that time, if they want to do anything other than just pay the rent(you can call it a mortgage I guess) then the 300k kicks back in. It doesn’t accure interest, I guess it’s not as bad as a neg am, but it’s damn close. I also agree that over 300k was too high a few months ago, but it’s bounced off bottom a bit, probably closer than you think. If it were to get repo’d it would cost gmac a year of no payments, lost interest, leagal fees, processing fees, back taxes and back hoa. In the end, they’d probably get close to mid to high 2’s and probably net only 200k after all is said and done. So they rig the payement to get them to stay, only lose a little a month on the lost interest for the 300k, and down the road they will recover more than the 200k, maybe get all their money back, a little chip in from the govmt, like 15k towards the interest (not sure what hope4homeowners pays the lender these days).

The riddle is, they are not on a path to ownership, at then end of this loan they don’t own the home. What do you call money tht you pay that does not go towards eventual ownership, equity and you will not partake in the appreciation? Hint: it rhymes with DENT!

However if their new payment is on par with current rents and they do get to deduct their payment, it makes sense to stay as opposed to walk away as long as they can do it and they have no chance at buying one accross the street anytime soon, which would allow them to rest their basis.

So don’t get mad at other peoples mods, if saw the actual terms, if it were an actual loan you could get when buying, you wouldn’t want it, just like you didn’t want a neg am, I/O, option arm special.

[temeculaguy]

The 300k is not a gift, it’s not free, it’s a temporary stay of execution. Let’s say they have a 3 year or a 5 year mod. If values increase in that time (or after that time), if they want to sell in that time, if they want to refi in that time if they want a heloc in that time, if they want to do anything other than just pay the rent(you can call it a mortgage I guess) then the 300k kicks back in. It doesn’t accure interest, I guess it’s not as bad as a neg am, but it’s damn close. I also agree that over 300k was too high a few months ago, but it’s bounced off bottom a bit, probably closer than you think. If it were to get repo’d it would cost gmac a year of no payments, lost interest, leagal fees, processing fees, back taxes and back hoa. In the end, they’d probably get close to mid to high 2’s and probably net only 200k after all is said and done. So they rig the payement to get them to stay, only lose a little a month on the lost interest for the 300k, and down the road they will recover more than the 200k, maybe get all their money back, a little chip in from the govmt, like 15k towards the interest (not sure what hope4homeowners pays the lender these days).

The riddle is, they are not on a path to ownership, at then end of this loan they don’t own the home. What do you call money tht you pay that does not go towards eventual ownership, equity and you will not partake in the appreciation? Hint: it rhymes with DENT!

However if their new payment is on par with current rents and they do get to deduct their payment, it makes sense to stay as opposed to walk away as long as they can do it and they have no chance at buying one accross the street anytime soon, which would allow them to rest their basis.

So don’t get mad at other peoples mods, if saw the actual terms, if it were an actual loan you could get when buying, you wouldn’t want it, just like you didn’t want a neg am, I/O, option arm special.

[temeculaguy]

The 300k is not a gift, it’s not free, it’s a temporary stay of execution. Let’s say they have a 3 year or a 5 year mod. If values increase in that time (or after that time), if they want to sell in that time, if they want to refi in that time if they want a heloc in that time, if they want to do anything other than just pay the rent(you can call it a mortgage I guess) then the 300k kicks back in. It doesn’t accure interest, I guess it’s not as bad as a neg am, but it’s damn close. I also agree that over 300k was too high a few months ago, but it’s bounced off bottom a bit, probably closer than you think. If it were to get repo’d it would cost gmac a year of no payments, lost interest, leagal fees, processing fees, back taxes and back hoa. In the end, they’d probably get close to mid to high 2’s and probably net only 200k after all is said and done. So they rig the payement to get them to stay, only lose a little a month on the lost interest for the 300k, and down the road they will recover more than the 200k, maybe get all their money back, a little chip in from the govmt, like 15k towards the interest (not sure what hope4homeowners pays the lender these days).

The riddle is, they are not on a path to ownership, at then end of this loan they don’t own the home. What do you call money tht you pay that does not go towards eventual ownership, equity and you will not partake in the appreciation? Hint: it rhymes with DENT!

However if their new payment is on par with current rents and they do get to deduct their payment, it makes sense to stay as opposed to walk away as long as they can do it and they have no chance at buying one accross the street anytime soon, which would allow them to rest their basis.

So don’t get mad at other peoples mods, if saw the actual terms, if it were an actual loan you could get when buying, you wouldn’t want it, just like you didn’t want a neg am, I/O, option arm special.

[temeculaguy]

The 300k is not a gift, it’s not free, it’s a temporary stay of execution. Let’s say they have a 3 year or a 5 year mod. If values increase in that time (or after that time), if they want to sell in that time, if they want to refi in that time if they want a heloc in that time, if they want to do anything other than just pay the rent(you can call it a mortgage I guess) then the 300k kicks back in. It doesn’t accure interest, I guess it’s not as bad as a neg am, but it’s damn close. I also agree that over 300k was too high a few months ago, but it’s bounced off bottom a bit, probably closer than you think. If it were to get repo’d it would cost gmac a year of no payments, lost interest, leagal fees, processing fees, back taxes and back hoa. In the end, they’d probably get close to mid to high 2’s and probably net only 200k after all is said and done. So they rig the payement to get them to stay, only lose a little a month on the lost interest for the 300k, and down the road they will recover more than the 200k, maybe get all their money back, a little chip in from the govmt, like 15k towards the interest (not sure what hope4homeowners pays the lender these days).

The riddle is, they are not on a path to ownership, at then end of this loan they don’t own the home. What do you call money tht you pay that does not go towards eventual ownership, equity and you will not partake in the appreciation? Hint: it rhymes with DENT!

However if their new payment is on par with current rents and they do get to deduct their payment, it makes sense to stay as opposed to walk away as long as they can do it and they have no chance at buying one accross the street anytime soon, which would allow them to rest their basis.

So don’t get mad at other peoples mods, if saw the actual terms, if it were an actual loan you could get when buying, you wouldn’t want it, just like you didn’t want a neg am, I/O, option arm special.

[temeculaguy]

[quote=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!)[/quote]

larger sfr’s don’t usually get to the same multiplier as smaller ones and condos, but I do agree it won’t fetch 2500 in rent, murrietta didn’t have many places in the bubble where 2500 sq rented for 2500, 2500 is a tough rental price point here because at that rate, you can buy anything. My 3300 sq fter in a better location is probably worth just around 2k rent, doubtful it would fetch 2200 or 2300, but a 1500 sq ft house will fetch 1500, it’s just the way it is, there is a cap on rent in a way.

Your buddy better check the tax credit rules, the income restrictions almost put 500k houses out of range. 75k for a single, 150k for a couple, since you can only borrow around 3x income, if he’s single and wants 500, he makes too much for the credit, if he’s married it’s gonna be close. Very few people in so cal qualify for the credit, in order to qual for the loan your income needs to be higher than they allow.

[temeculaguy]

[quote=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!)[/quote]

larger sfr’s don’t usually get to the same multiplier as smaller ones and condos, but I do agree it won’t fetch 2500 in rent, murrietta didn’t have many places in the bubble where 2500 sq rented for 2500, 2500 is a tough rental price point here because at that rate, you can buy anything. My 3300 sq fter in a better location is probably worth just around 2k rent, doubtful it would fetch 2200 or 2300, but a 1500 sq ft house will fetch 1500, it’s just the way it is, there is a cap on rent in a way.

Your buddy better check the tax credit rules, the income restrictions almost put 500k houses out of range. 75k for a single, 150k for a couple, since you can only borrow around 3x income, if he’s single and wants 500, he makes too much for the credit, if he’s married it’s gonna be close. Very few people in so cal qualify for the credit, in order to qual for the loan your income needs to be higher than they allow.

[temeculaguy]

[quote=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!)[/quote]

larger sfr’s don’t usually get to the same multiplier as smaller ones and condos, but I do agree it won’t fetch 2500 in rent, murrietta didn’t have many places in the bubble where 2500 sq rented for 2500, 2500 is a tough rental price point here because at that rate, you can buy anything. My 3300 sq fter in a better location is probably worth just around 2k rent, doubtful it would fetch 2200 or 2300, but a 1500 sq ft house will fetch 1500, it’s just the way it is, there is a cap on rent in a way.

Your buddy better check the tax credit rules, the income restrictions almost put 500k houses out of range. 75k for a single, 150k for a couple, since you can only borrow around 3x income, if he’s single and wants 500, he makes too much for the credit, if he’s married it’s gonna be close. Very few people in so cal qualify for the credit, in order to qual for the loan your income needs to be higher than they allow.

[temeculaguy]

[quote=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!)[/quote]

larger sfr’s don’t usually get to the same multiplier as smaller ones and condos, but I do agree it won’t fetch 2500 in rent, murrietta didn’t have many places in the bubble where 2500 sq rented for 2500, 2500 is a tough rental price point here because at that rate, you can buy anything. My 3300 sq fter in a better location is probably worth just around 2k rent, doubtful it would fetch 2200 or 2300, but a 1500 sq ft house will fetch 1500, it’s just the way it is, there is a cap on rent in a way.

Your buddy better check the tax credit rules, the income restrictions almost put 500k houses out of range. 75k for a single, 150k for a couple, since you can only borrow around 3x income, if he’s single and wants 500, he makes too much for the credit, if he’s married it’s gonna be close. Very few people in so cal qualify for the credit, in order to qual for the loan your income needs to be higher than they allow.

[Author]

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