Posted on 09/26/2007 11:34:52 AM PDT by Hydroshock
NEW YORK (CNNMoney.com) -- The bullhorn message from the government to mortgage lenders has been: Bend. Do what you can to help struggling homeowners.
The message to troubled homeowners has been: Call your lender. You may be able to work something out.
Despite the persistent blare, there is not a whole lotta "loan modifying" going on yet.
A survey by Moody's found that most loan servicers this year had modified only about 1 percent of their adjustable-rate mortgages (ARMs) that had reset to higher rates by the end of July.
At the Consumer Credit Counseling Service (CCCS) of San Francisco, which has been working with borrowers referred by lenders, a loan modification is the rare exception rather than the rule.
In a modification, a loan servicer could, for instance, freeze the loan's intro rate for 24 months or perhaps fix the introductory rate for the remainder of the loan.
But based on what the credit counselors have seen from lenders' responses, "if a borrower is behind because of the rate hike, in general that is not enough of a reason to modify the loan. The borrower needs to have a reason (e.g., losing one's income or a medical crisis) and proof they can make the modified payment," said Erica J. Sandberg, CCCS of San Francisco's financial education and communications advisor.
(Excerpt) Read more at money.cnn.com ...
Despite the (expected) whining of CNN this is good news indeed!
At least for now there is no banker bailout. But I look for the congress to either do some sort of bail out or push really hard for one next year. There is an election after all.
If the loan companies like American Mortgage have to go out of business, write of the loans on the homes and tell the people they are payed off. If you do this one time, other companies will watch what they are doing.
It’s the stupid @ss government that encouraged lenders to make these idiot loans to begin with.
Yep.
The latest lame-brained proposal from the Democrats is to allow modification of mortgages in bankruptcy. This essentially would turned secured loans into unsecured debt. Nobody will be stupid enough to continue originating or buying mortgages after that.
Only about 1 percent--hmmmmmmm.
Perhaps the subprime "crisis" is partisan politics to get dims into he White House, as only roughly .5% of so-called subprimes are in trouble, according to the unreported actual data
The bulk of the loans have not yet reset.
the last number that I saw was 1 out of every 510 households was in foreclosure...I suspect that one out of 510 folks wouldn’t pay their house note anyway; sub-prime or not.
Some cities are being vaporized by foreclosures.
Stockton, California: 1 in 27 households is in Foreclosure
Detroit, Michigan: 1 in 29 households is in Foreclosure
Las Vegas, Nevada: 1 in 31 households is in Foreclosure
San Bernardino, California: 1 in 33 households is in Foreclosure
Sacramento, California: 1 in 36 households is in Foreclosure
Denver, Colorado: 1 in 42 households is in Foreclosure
Miami, Florida: 1 in 46 households is in Foreclosure
These are MAJOR US cities being gutted by foreclosed properties and the rates will only skyrocket as the peak in subprime foreclosures are set to run through the end of this year and well into the winter.
How about when Stockton and Detroit have 1 in every 10 homes in a foreclosure. If you think housing prices haven’t cashed yet, just wait for it...
And some cities may take 20 years to recover. No, I kid you not. Most will laugh uncontrollably at the idea of 20 years of depressed home values. Laugh away.
http://money.cnn.com/2007/08/14/real_estate/California_cities_lead_foreclosure/index.htm
Detroit has been on the decline for decades. The fact that people STAY in the Detroit metro area is unfathomable to me.
Twenty years ago was a good time to leave.
I was born and raised in Michigan in the out-lying suburbs. I LOVE Michigan. But wild horses couldn’t drag me back there.
Last one out, turn out the lights.
"Smoke and mirrors" is another term for "a cover-up," and this mass of stories on subprime and foreclosures is nothing more or less than a political cover-up of Pres. Bush's fantastic handling of the American economy.
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