The 5/1 Interest Only ARM Returns

[sdrealtor]

Before the lynch mob gets any further out of hand, all the mods I have seen and heard about are for primary residences not rental properties.

The mod example I provided was for my friends 10+ yr primary residence not a rental property. I said he could rent it out not that he would. Its his home and he will stay there though he has and may take in a roomate. The modification is allowing him a couple years to get back on his feet and he is well on his way. In the end after a few years of interest rate subsidy he will eventually have to pay back the entire principal of the loan. It was a good deal for all as they do a NPV calculation to make sure of that. If it wasnt the lender wouldnt have done it.

HAMP modifications are for 5 years at a low start rate increasing 1% per year until reaching the current market today they are qualifying under.

[sdrealtor]

Last and biggest problem with the Dutch123 post before you fire up the lynch mob. What about taxes on the house of at least $500 and insurance $100, maintenance certainly not $0 and then through in a one month vacancy and OOOOPPPSSS there goes the $800 differential and its a loss. Oh yeah there is also the problem of telling the Mrs. that they are moving out of the 4BR/3BA 2300 suburban tract home and squeezing the family of 4 into a 600 sq ft urban studio apratment for the $800 rent.

That post is nonsense….

[sdrealtor]

Last and biggest problem with the Dutch123 post before you fire up the lynch mob. What about taxes on the house of at least $500 and insurance $100, maintenance certainly not $0 and then through in a one month vacancy and OOOOPPPSSS there goes the $800 differential and its a loss. Oh yeah there is also the problem of telling the Mrs. that they are moving out of the 4BR/3BA 2300 suburban tract home and squeezing the family of 4 into a 600 sq ft urban studio apratment for the $800 rent.

That post is nonsense….

[sdrealtor]

Last and biggest problem with the Dutch123 post before you fire up the lynch mob. What about taxes on the house of at least $500 and insurance $100, maintenance certainly not $0 and then through in a one month vacancy and OOOOPPPSSS there goes the $800 differential and its a loss. Oh yeah there is also the problem of telling the Mrs. that they are moving out of the 4BR/3BA 2300 suburban tract home and squeezing the family of 4 into a 600 sq ft urban studio apratment for the $800 rent.

That post is nonsense….

[sdrealtor]

Last and biggest problem with the Dutch123 post before you fire up the lynch mob. What about taxes on the house of at least $500 and insurance $100, maintenance certainly not $0 and then through in a one month vacancy and OOOOPPPSSS there goes the $800 differential and its a loss. Oh yeah there is also the problem of telling the Mrs. that they are moving out of the 4BR/3BA 2300 suburban tract home and squeezing the family of 4 into a 600 sq ft urban studio apratment for the $800 rent.

That post is nonsense….

[sdrealtor]

Last and biggest problem with the Dutch123 post before you fire up the lynch mob. What about taxes on the house of at least $500 and insurance $100, maintenance certainly not $0 and then through in a one month vacancy and OOOOPPPSSS there goes the $800 differential and its a loss. Oh yeah there is also the problem of telling the Mrs. that they are moving out of the 4BR/3BA 2300 suburban tract home and squeezing the family of 4 into a 600 sq ft urban studio apratment for the $800 rent.

That post is nonsense….

[CA renter]

[quote=sdrealtor]Before the lynch mob gets any further out of hand, all the mods I have seen and heard about are for primary residences not rental properties.

The mod example I provided was for my friends 10+ yr primary residence not a rental property. I said he could rent it out not that he would. Its his home and he will stay there though he has and may take in a roomate. The modification is allowing him a couple years to get back on his feet and he is well on his way. In the end after a few years of interest rate subsidy he will eventually have to pay back the entire principal of the loan. It was a good deal for all as they do a NPV calculation to make sure of that. If it wasnt the lender wouldnt have done it.

HAMP modifications are for 5 years at a low start rate increasing 1% per year until reaching the current market today they are qualifying under.[/quote]

I wasn’t sure if it was you or not (hence the ?), but somebody here told us about someone with mutiple rentals that are now all cashflow positive. I’ve also seen posts on other blogs with the same types of stories.

You’ve got to admit, sdr, it would be difficult not to be frustrated if you were in the same shoes as JP and I. Your perspective is different, so you don’t mind the games as much. For us, it stinks! 🙁

[CA renter]

[quote=sdrealtor]Before the lynch mob gets any further out of hand, all the mods I have seen and heard about are for primary residences not rental properties.

The mod example I provided was for my friends 10+ yr primary residence not a rental property. I said he could rent it out not that he would. Its his home and he will stay there though he has and may take in a roomate. The modification is allowing him a couple years to get back on his feet and he is well on his way. In the end after a few years of interest rate subsidy he will eventually have to pay back the entire principal of the loan. It was a good deal for all as they do a NPV calculation to make sure of that. If it wasnt the lender wouldnt have done it.

HAMP modifications are for 5 years at a low start rate increasing 1% per year until reaching the current market today they are qualifying under.[/quote]

I wasn’t sure if it was you or not (hence the ?), but somebody here told us about someone with mutiple rentals that are now all cashflow positive. I’ve also seen posts on other blogs with the same types of stories.

You’ve got to admit, sdr, it would be difficult not to be frustrated if you were in the same shoes as JP and I. Your perspective is different, so you don’t mind the games as much. For us, it stinks! 🙁

[CA renter]

[quote=sdrealtor]Before the lynch mob gets any further out of hand, all the mods I have seen and heard about are for primary residences not rental properties.

The mod example I provided was for my friends 10+ yr primary residence not a rental property. I said he could rent it out not that he would. Its his home and he will stay there though he has and may take in a roomate. The modification is allowing him a couple years to get back on his feet and he is well on his way. In the end after a few years of interest rate subsidy he will eventually have to pay back the entire principal of the loan. It was a good deal for all as they do a NPV calculation to make sure of that. If it wasnt the lender wouldnt have done it.

HAMP modifications are for 5 years at a low start rate increasing 1% per year until reaching the current market today they are qualifying under.[/quote]

I wasn’t sure if it was you or not (hence the ?), but somebody here told us about someone with mutiple rentals that are now all cashflow positive. I’ve also seen posts on other blogs with the same types of stories.

You’ve got to admit, sdr, it would be difficult not to be frustrated if you were in the same shoes as JP and I. Your perspective is different, so you don’t mind the games as much. For us, it stinks! 🙁

[CA renter]

[quote=sdrealtor]Before the lynch mob gets any further out of hand, all the mods I have seen and heard about are for primary residences not rental properties.

The mod example I provided was for my friends 10+ yr primary residence not a rental property. I said he could rent it out not that he would. Its his home and he will stay there though he has and may take in a roomate. The modification is allowing him a couple years to get back on his feet and he is well on his way. In the end after a few years of interest rate subsidy he will eventually have to pay back the entire principal of the loan. It was a good deal for all as they do a NPV calculation to make sure of that. If it wasnt the lender wouldnt have done it.

HAMP modifications are for 5 years at a low start rate increasing 1% per year until reaching the current market today they are qualifying under.[/quote]

I wasn’t sure if it was you or not (hence the ?), but somebody here told us about someone with mutiple rentals that are now all cashflow positive. I’ve also seen posts on other blogs with the same types of stories.

You’ve got to admit, sdr, it would be difficult not to be frustrated if you were in the same shoes as JP and I. Your perspective is different, so you don’t mind the games as much. For us, it stinks! 🙁

[CA renter]

[quote=sdrealtor]Before the lynch mob gets any further out of hand, all the mods I have seen and heard about are for primary residences not rental properties.

The mod example I provided was for my friends 10+ yr primary residence not a rental property. I said he could rent it out not that he would. Its his home and he will stay there though he has and may take in a roomate. The modification is allowing him a couple years to get back on his feet and he is well on his way. In the end after a few years of interest rate subsidy he will eventually have to pay back the entire principal of the loan. It was a good deal for all as they do a NPV calculation to make sure of that. If it wasnt the lender wouldnt have done it.

HAMP modifications are for 5 years at a low start rate increasing 1% per year until reaching the current market today they are qualifying under.[/quote]

I wasn’t sure if it was you or not (hence the ?), but somebody here told us about someone with mutiple rentals that are now all cashflow positive. I’ve also seen posts on other blogs with the same types of stories.

You’ve got to admit, sdr, it would be difficult not to be frustrated if you were in the same shoes as JP and I. Your perspective is different, so you don’t mind the games as much. For us, it stinks! 🙁

[Arraya]

I spoke with a BK lawyer doings mods, a while back, and he said that he was doing rentals and cash flowing them depending in the circumstances. Basically, you would have to prove a “hardship” beyond just financial mismanagement, which is loosely defined.

It’s all irrelevant if further declines via deflation are in the cards and they get stuck with a recourse loan and possible loss of income. It could very well end up being a trap and do very little for maintaining price levels.

As an aside, they also did forensic mortgage audits(which the use as leverage in negotiating new terms) and found that over half of all documents had some sort of violation.

[Arraya]

I spoke with a BK lawyer doings mods, a while back, and he said that he was doing rentals and cash flowing them depending in the circumstances. Basically, you would have to prove a “hardship” beyond just financial mismanagement, which is loosely defined.

It’s all irrelevant if further declines via deflation are in the cards and they get stuck with a recourse loan and possible loss of income. It could very well end up being a trap and do very little for maintaining price levels.

As an aside, they also did forensic mortgage audits(which the use as leverage in negotiating new terms) and found that over half of all documents had some sort of violation.

[Arraya]

I spoke with a BK lawyer doings mods, a while back, and he said that he was doing rentals and cash flowing them depending in the circumstances. Basically, you would have to prove a “hardship” beyond just financial mismanagement, which is loosely defined.

It’s all irrelevant if further declines via deflation are in the cards and they get stuck with a recourse loan and possible loss of income. It could very well end up being a trap and do very little for maintaining price levels.

As an aside, they also did forensic mortgage audits(which the use as leverage in negotiating new terms) and found that over half of all documents had some sort of violation.

[Arraya]

I spoke with a BK lawyer doings mods, a while back, and he said that he was doing rentals and cash flowing them depending in the circumstances. Basically, you would have to prove a “hardship” beyond just financial mismanagement, which is loosely defined.

It’s all irrelevant if further declines via deflation are in the cards and they get stuck with a recourse loan and possible loss of income. It could very well end up being a trap and do very little for maintaining price levels.

As an aside, they also did forensic mortgage audits(which the use as leverage in negotiating new terms) and found that over half of all documents had some sort of violation.

[Author]

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