OT-What a loan modification with principal reduction really looks like

[sdrealtor]

No metaphor for my friend. He was out of work and the 2% rate on the trial rate kept him going. He kept current on the 2nd which is only about $100 per month. He’s back to work and his home is saved. The bank never took a loss and down the road should get all money back. They reduced the interest income they got but after several years will be getting what are now current rates my friend could not have refi’d into because he had no equity.

BTW, he has a roomate in his house and has for years. He has owned the house since 1999 and had to pull out about $200K to settle his divorce. He has never lived extravagently or atm’d himself for personal enjoyment. To the contrary most people would consider him a bit of a sad sack. He was completely truthful in everything he did with them and dsiclosed his situation income/ assets/expenses accurately. He piled up some credit card debt which he will be able to get caught up on also.

To me this looks like a win-win and a system that is working at least for some deserving folks.

[SD Realtor]

No the metaphor was meant for the uber bears who think, thought, continue to hope that the tsunami cannot be stopped. There are those believers that the govt will not go down with the ship. In reality the system has been forever changed and that the tsunami can indeed be diverted, reduced, or whatever you want to call it. There are plenty of people who can get workouts and mods, and will be able to maintain home ownership for quite awhile because of them. There are some who will default again. As long as the system can keep whittling down the numbers it will work. Walkways and jingle mail will happen as well but the system has shown resiliency and will let those people live for free until the system decides to deal with them individually.

What is quite interesting is the deal on the rates these people are getting in light of potential drastic interest rate hikes we can and will likely see in upcoming years. If you are saying Joe Buyer buys a home in 05, gets a loan mod in 09 or 10, has a 4.75 cap and in 2014 we are at 12% rates, he is doing pretty well. Screw it if he has to give his profits up if he sells. He is probably pretty darn happy.

Also I am quite skeptical of the ability of the banks to track owner occupancy as well.

I guess we will see!

[SD Realtor]

No the metaphor was meant for the uber bears who think, thought, continue to hope that the tsunami cannot be stopped. There are those believers that the govt will not go down with the ship. In reality the system has been forever changed and that the tsunami can indeed be diverted, reduced, or whatever you want to call it. There are plenty of people who can get workouts and mods, and will be able to maintain home ownership for quite awhile because of them. There are some who will default again. As long as the system can keep whittling down the numbers it will work. Walkways and jingle mail will happen as well but the system has shown resiliency and will let those people live for free until the system decides to deal with them individually.

What is quite interesting is the deal on the rates these people are getting in light of potential drastic interest rate hikes we can and will likely see in upcoming years. If you are saying Joe Buyer buys a home in 05, gets a loan mod in 09 or 10, has a 4.75 cap and in 2014 we are at 12% rates, he is doing pretty well. Screw it if he has to give his profits up if he sells. He is probably pretty darn happy.

Also I am quite skeptical of the ability of the banks to track owner occupancy as well.

I guess we will see!

[SD Realtor]

No the metaphor was meant for the uber bears who think, thought, continue to hope that the tsunami cannot be stopped. There are those believers that the govt will not go down with the ship. In reality the system has been forever changed and that the tsunami can indeed be diverted, reduced, or whatever you want to call it. There are plenty of people who can get workouts and mods, and will be able to maintain home ownership for quite awhile because of them. There are some who will default again. As long as the system can keep whittling down the numbers it will work. Walkways and jingle mail will happen as well but the system has shown resiliency and will let those people live for free until the system decides to deal with them individually.

What is quite interesting is the deal on the rates these people are getting in light of potential drastic interest rate hikes we can and will likely see in upcoming years. If you are saying Joe Buyer buys a home in 05, gets a loan mod in 09 or 10, has a 4.75 cap and in 2014 we are at 12% rates, he is doing pretty well. Screw it if he has to give his profits up if he sells. He is probably pretty darn happy.

Also I am quite skeptical of the ability of the banks to track owner occupancy as well.

I guess we will see!

[SD Realtor]

No the metaphor was meant for the uber bears who think, thought, continue to hope that the tsunami cannot be stopped. There are those believers that the govt will not go down with the ship. In reality the system has been forever changed and that the tsunami can indeed be diverted, reduced, or whatever you want to call it. There are plenty of people who can get workouts and mods, and will be able to maintain home ownership for quite awhile because of them. There are some who will default again. As long as the system can keep whittling down the numbers it will work. Walkways and jingle mail will happen as well but the system has shown resiliency and will let those people live for free until the system decides to deal with them individually.

What is quite interesting is the deal on the rates these people are getting in light of potential drastic interest rate hikes we can and will likely see in upcoming years. If you are saying Joe Buyer buys a home in 05, gets a loan mod in 09 or 10, has a 4.75 cap and in 2014 we are at 12% rates, he is doing pretty well. Screw it if he has to give his profits up if he sells. He is probably pretty darn happy.

Also I am quite skeptical of the ability of the banks to track owner occupancy as well.

I guess we will see!

[SD Realtor]

No the metaphor was meant for the uber bears who think, thought, continue to hope that the tsunami cannot be stopped. There are those believers that the govt will not go down with the ship. In reality the system has been forever changed and that the tsunami can indeed be diverted, reduced, or whatever you want to call it. There are plenty of people who can get workouts and mods, and will be able to maintain home ownership for quite awhile because of them. There are some who will default again. As long as the system can keep whittling down the numbers it will work. Walkways and jingle mail will happen as well but the system has shown resiliency and will let those people live for free until the system decides to deal with them individually.

What is quite interesting is the deal on the rates these people are getting in light of potential drastic interest rate hikes we can and will likely see in upcoming years. If you are saying Joe Buyer buys a home in 05, gets a loan mod in 09 or 10, has a 4.75 cap and in 2014 we are at 12% rates, he is doing pretty well. Screw it if he has to give his profits up if he sells. He is probably pretty darn happy.

Also I am quite skeptical of the ability of the banks to track owner occupancy as well.

I guess we will see!

[CA renter]

[quote=SD Realtor]What is quite interesting is the deal on the rates these people are getting in light of potential drastic interest rate hikes we can and will likely see in upcoming years. If you are saying Joe Buyer buys a home in 05, gets a loan mod in 09 or 10, has a 4.75 cap and in 2014 we are at 12% rates, he is doing pretty well. Screw it if he has to give his profits up if he sells. He is probably pretty darn happy.

Also I am quite skeptical of the ability of the banks to track owner occupancy as well.

I guess we will see![/quote]

IMHO, this is exactly why the private mortgage market doesn’t exist. With all the money printing going on — and the insecurities regarding fiat currencies — only a fool would accept fixed rates for 30 years at sub-6%, and this is for borrowers who’ve already shown a propensity for default/financial distress. Is it any wonder we (the taxpayers) are backing up all this nonsense?

BTW, as an uber-bear, I’ve always conceded that there was a possibility my thesis (deflation) would turn out wrong. There has always been a very good argument on both sides of the inflation/deflation debate (I’ve always believed there would be a currency crisis, just that there would be a period of major deflation just before it — much more deflation than what we saw in 2008). We all just have to take a gamble and choose sides; they’ve left us no choice.

[CA renter]

[quote=SD Realtor]What is quite interesting is the deal on the rates these people are getting in light of potential drastic interest rate hikes we can and will likely see in upcoming years. If you are saying Joe Buyer buys a home in 05, gets a loan mod in 09 or 10, has a 4.75 cap and in 2014 we are at 12% rates, he is doing pretty well. Screw it if he has to give his profits up if he sells. He is probably pretty darn happy.

Also I am quite skeptical of the ability of the banks to track owner occupancy as well.

I guess we will see![/quote]

IMHO, this is exactly why the private mortgage market doesn’t exist. With all the money printing going on — and the insecurities regarding fiat currencies — only a fool would accept fixed rates for 30 years at sub-6%, and this is for borrowers who’ve already shown a propensity for default/financial distress. Is it any wonder we (the taxpayers) are backing up all this nonsense?

BTW, as an uber-bear, I’ve always conceded that there was a possibility my thesis (deflation) would turn out wrong. There has always been a very good argument on both sides of the inflation/deflation debate (I’ve always believed there would be a currency crisis, just that there would be a period of major deflation just before it — much more deflation than what we saw in 2008). We all just have to take a gamble and choose sides; they’ve left us no choice.

[CA renter]

[quote=SD Realtor]What is quite interesting is the deal on the rates these people are getting in light of potential drastic interest rate hikes we can and will likely see in upcoming years. If you are saying Joe Buyer buys a home in 05, gets a loan mod in 09 or 10, has a 4.75 cap and in 2014 we are at 12% rates, he is doing pretty well. Screw it if he has to give his profits up if he sells. He is probably pretty darn happy.

Also I am quite skeptical of the ability of the banks to track owner occupancy as well.

I guess we will see![/quote]

IMHO, this is exactly why the private mortgage market doesn’t exist. With all the money printing going on — and the insecurities regarding fiat currencies — only a fool would accept fixed rates for 30 years at sub-6%, and this is for borrowers who’ve already shown a propensity for default/financial distress. Is it any wonder we (the taxpayers) are backing up all this nonsense?

BTW, as an uber-bear, I’ve always conceded that there was a possibility my thesis (deflation) would turn out wrong. There has always been a very good argument on both sides of the inflation/deflation debate (I’ve always believed there would be a currency crisis, just that there would be a period of major deflation just before it — much more deflation than what we saw in 2008). We all just have to take a gamble and choose sides; they’ve left us no choice.

[CA renter]

[quote=SD Realtor]What is quite interesting is the deal on the rates these people are getting in light of potential drastic interest rate hikes we can and will likely see in upcoming years. If you are saying Joe Buyer buys a home in 05, gets a loan mod in 09 or 10, has a 4.75 cap and in 2014 we are at 12% rates, he is doing pretty well. Screw it if he has to give his profits up if he sells. He is probably pretty darn happy.

Also I am quite skeptical of the ability of the banks to track owner occupancy as well.

I guess we will see![/quote]

IMHO, this is exactly why the private mortgage market doesn’t exist. With all the money printing going on — and the insecurities regarding fiat currencies — only a fool would accept fixed rates for 30 years at sub-6%, and this is for borrowers who’ve already shown a propensity for default/financial distress. Is it any wonder we (the taxpayers) are backing up all this nonsense?

BTW, as an uber-bear, I’ve always conceded that there was a possibility my thesis (deflation) would turn out wrong. There has always been a very good argument on both sides of the inflation/deflation debate (I’ve always believed there would be a currency crisis, just that there would be a period of major deflation just before it — much more deflation than what we saw in 2008). We all just have to take a gamble and choose sides; they’ve left us no choice.

[CA renter]

[quote=SD Realtor]What is quite interesting is the deal on the rates these people are getting in light of potential drastic interest rate hikes we can and will likely see in upcoming years. If you are saying Joe Buyer buys a home in 05, gets a loan mod in 09 or 10, has a 4.75 cap and in 2014 we are at 12% rates, he is doing pretty well. Screw it if he has to give his profits up if he sells. He is probably pretty darn happy.

Also I am quite skeptical of the ability of the banks to track owner occupancy as well.

I guess we will see![/quote]

IMHO, this is exactly why the private mortgage market doesn’t exist. With all the money printing going on — and the insecurities regarding fiat currencies — only a fool would accept fixed rates for 30 years at sub-6%, and this is for borrowers who’ve already shown a propensity for default/financial distress. Is it any wonder we (the taxpayers) are backing up all this nonsense?

BTW, as an uber-bear, I’ve always conceded that there was a possibility my thesis (deflation) would turn out wrong. There has always been a very good argument on both sides of the inflation/deflation debate (I’ve always believed there would be a currency crisis, just that there would be a period of major deflation just before it — much more deflation than what we saw in 2008). We all just have to take a gamble and choose sides; they’ve left us no choice.

[pemeliza]

“We all just have to take a gamble and choose sides; they’ve left us no choice.”

Well spoken CAR.

[pemeliza]

“We all just have to take a gamble and choose sides; they’ve left us no choice.”

Well spoken CAR.

[pemeliza]

“We all just have to take a gamble and choose sides; they’ve left us no choice.”

Well spoken CAR.

[pemeliza]

“We all just have to take a gamble and choose sides; they’ve left us no choice.”

Well spoken CAR.

[Author]

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