“Sand State” Re-default Rates Over 50% - Administration Advertises Mortgage Modifications!

Confounded Interest ^ | 07/01/2012 | Anthony B. Sanders

[whitedog57]

As I discussed at the American Action Forum with Douglas Holtz-Eakin, Jared Bernstein and Jason Gold, there are 14 Administration mortgage modification programs (including the Attorneys General Settlement). And the Administration keeps insisting on MORE programs such as principal reductions and HARP 2.0 Supersized!

The Administration is even ADVERTISING their refinancing programs.

Of course, the last line is absolutely false. SOMEONE pays for loan modifications and principal reductions and those people are investors such as banks, Fannie Mae, Freddie Mac, pension funds (yes, even Clark Griswold will have to pay for Cousin Eddie’s loan modification and principal reduction).

In order to claim that it won’t cost taxpayers a cent is the assumption that since Fannie Mae the government is already on the hooks for Fannie Mae and Freddie Mac losses, it won’t cost taxpayers any ADDITIONAL money. But even this assumption is false. We still want FHFA, Fannie Mae and Freddie Mac to reduce taxpayer exposure to losses and principal reductions would clearly cost taxpayers billions.

Before any more government mortgage modification programs are added, we need to look at the success rate thus far.

According to Transunion, over 50% of modified mortgage re-defaulted within 18 months. Nevada, Arizona and Florida exceeded 60% within 18 months.

So, should the Administration and Congress continue in their manic quest to force lenders/servicers to modify loans? Of course not. These programs were poorly thought out and executed and it would be best if they simply ceased.

Remember, the Administration also told us that Obamacare would REDUCE medical costs. And that we can keep our healthcare plan if we like it.

[whitedog57]

Good point by this economist. Obama lied about Obamacare and is lying about mortgage modifications too.

[faithhopecharity]

Yes. and the administration is using our tax money to actually advertise all sorts of giveaways... mortgage discounts, food stamps, free cell phones, birth control, you name it. We get to pay for it and we get to promote it, too, so the program costs will go even higher.
now the administration is actually using our tax money to advertise all the virtues (so called) of Obumacare..extolling this and that and every other kind of promised free medical service, test, and treatment.
But of course all the administration has to do is print (or borrow) a few more Trillions of $$$$. So, there will be no problem at all in signing up EveryBody onto the dole.
Problem solved.
(and re-election assured)

[longtermmemmory]

The ONLY way for any modification to work is principle forgivness. There are no significant routine principle forgivness.

The prices were inflated and were NEVER worth the amounts appraised. Banks HAVE to take a loss.