So I have a buddy who is hopelessly underwater on a San Marcos 2 br townhouse. He lives there with his wife and two kids and pays his insanely over market mortgage every month, even though he is a prime candidate to walk away. Long story how he got there, but his 1st is at 7% and his 2nd is at 12%, both are interest only, but neither are adjustable. He already dumped a big wad of cash in to get out of his crazy ARM, into the mess described above. We’ve been discussing his options, and he is hesitant to walk, something about morals and integrity and stuff like that. Good for him, I guess.
So he tells me the bank for his 2nd sent him a letter. Its a one time offer, act by late January, and if he pays them roughly 25% of the loan (currently about $80K) in one lump they will forgive the rest of it. So if he can scrounge up ~$20K, he gets out of $80K in debt (more like $190K if he were to pay it over term. He’s double checking that its legit and what the tax consequences would be, but it looks too good to be true. Then he would be down to just one first mtg at a decent rate, something manageable. It would leave him in a position where he could stick, relocate and rent it out, short sale, or walk away, and come out of the whole mess OK.
Obviously the bank looked at the risk profile and is trying to salvage something out of nothing. They don’t have any confidence that he is going to pay it off in full, even though that’s what he’s been doing and intends to do. So while he didn’t even go looking for a loan mod, they came to him and offered him a deal that looks like a little slice of heaven.
Obviously this bank is getting bailed out by the rest of us, and their loss write on this loan is almost surely covered by some damn program.
Anyone questioning the extent to which TPTB are going to keep this market from collapsing again? You don’t need to even ask, they are just forgiving debt out of the goodness of their heart. Bless their souls, eh?
I had a client that got an offer like this a year ago and have heard of others. It’s a de facto principal reduction. I blogged about this a month ago and was attacked by Rt 66 as telling lies. Here’s aother example from a disinterested party.
Once he does this, he could go for a HAMP modification on his 1st which is likely a convential loan. He could probably get below rental cost for the next 5 years.
I had a client that got an offer like this a year ago and have heard of others. It’s a de facto principal reduction. I blogged about this a month ago and was attacked by Rt 66 as telling lies. Here’s aother example from a disinterested party.
Once he does this, he could go for a HAMP modification on his 1st which is likely a convential loan. He could probably get below rental cost for the next 5 years.
I had a client that got an offer like this a year ago and have heard of others. It’s a de facto principal reduction. I blogged about this a month ago and was attacked by Rt 66 as telling lies. Here’s aother example from a disinterested party.
Once he does this, he could go for a HAMP modification on his 1st which is likely a convential loan. He could probably get below rental cost for the next 5 years.
I had a client that got an offer like this a year ago and have heard of others. It’s a de facto principal reduction. I blogged about this a month ago and was attacked by Rt 66 as telling lies. Here’s aother example from a disinterested party.
Once he does this, he could go for a HAMP modification on his 1st which is likely a convential loan. He could probably get below rental cost for the next 5 years.
I had a client that got an offer like this a year ago and have heard of others. It’s a de facto principal reduction. I blogged about this a month ago and was attacked by Rt 66 as telling lies. Here’s aother example from a disinterested party.
Once he does this, he could go for a HAMP modification on his 1st which is likely a convential loan. He could probably get below rental cost for the next 5 years.
