[fightinJAG]

This is an interesting proposal for stemming the coming tide of foreclosures in non-subprime categories.

Although interest rates are falling, many homeowners who bought in the last five years cannot refinance because lenders (now) require a 80% LTV. When a home has lost 20% of its value, as many have, the owner can forgetabout refi.

Offering a separate loan, as suggested here, might work. Thoughts?

[Snoopers-868th]

People underwater with non-recourse loans have every right to do just what the banks have done:

—Banks do what is good for their balance sheet,

—What business does: What is good for their balance sheet (including laying off employees if necessary)

—Why shouldn’t people who have been responsible not be able to do what is good for their balance sheet and walk away.

I would never refinance and take a recourse loan when I have a non-recourse loan. IMO, the housing market has not hit bottom yet and these people will only lose more money.

There is nothing being offered to help the responsible people, beware of the small print.

[HereInTheHeartland]

“Although interest rates are falling, many homeowners who bought in the last five years cannot refinance because lenders (now) require a 80% LTV. When a home has lost 20% of its value, as many have, the owner can forgetabout refi.’

I do mortgage lending for the largest lender in the country. We can go up to 95% with fairly decent terms with a single loan.
The rate will be higher for being over 80%, but that means instead of getting 4.625% with 20 equity, someone will be paying over 5.000% but on the positive side no PMI.
We have pretty much quit doing second mortgages however.

But being over 100% due to property value declines really doesn't leave a lot of options.

[ldish]

i bought a house that i could afford and paid for it...what could be simpler than that. had to qualify, had to put 20% and never ever got a second morgage on it to play or pay for other things...i guess the value of it goes up and down...still live in it for rent free...the only thing that continues to go up annually are the taxes which i am sure are being pissed away as my ss taxes were for over 30 years...CRA had it easy for people who should be saving for a down payment or renting to get loans they can’t afford and now CRA has robbed my 401k and IRAs...it took me 30 years of saving and maxing out monthly savings....the same amount has been lost in 5 months....that took me 30 years to attain...now that i believe is something to be ENRAGED about...and i am!!!!!!!!!!!

[hunter112]

Offering a separate loan, as suggested here, might work. Thoughts?

The housing bubble popped because unrealistic expectations could not be sustained by the free market, any government sleight-of-hand that artifically props those prices up maintains the unrealistic expectations, at least in part.

House prices have to sink back to free market levels. There's no permanent solution beyond that.

[ExpatGator]

Thoughts?

Kinda like Ted Bundy as a rape crisis counselor.

Kinda like throwing good money after bad.

Kinda like sex in the name of virginity.

[org.whodat]

Not my problem and it's not the governments either.

[org.whodat]

When a home has lost 20% of its value, as many have, the owner can forgetabout refi.

Just why would someone that is already underwater want to refinance??? To what end!!!!