Posted on 01/27/2010 3:53:32 AM PST by TigerLikesRooster
Rising Redefaults Could Prompt More Principal Reductions
By: Carrie Bay 01/26/2010
Despite the income verifications and trial modification periods being carried out by mortgage servicers, modified loans continue to redefault at extremely high rates. The debt ratings agency DBRS estimates that more than half of all restructured mortgages are at least two months delinquent or fall into foreclosure again within six months of modification.
As a result, DBRS expects modifications that forgive mortgage debt to become the preferred loss mitigation strategy for many servicers during 2010, according to notes released Monday by the Toronto-based agency’s New York office.
(Excerpt) Read more at dsnews.com ...
P!
Carried to the lodical end, one would never have to make a house payment. This will not end well
This is crazy. What about those of us who aren’t default or redefaulting on our mortgages? WE NEVER GET A BREAK.
The administrations claim to help the middle class is exposed for what it really is - a redistribution of wealth from the middle class to the entitlement class.
So a bunch of people lose jobs, can’t afford to make mortgage payments, and decide that they’ll just restructure the debt to make it manageable. Yet, no one inquires as to the debtor’s ability to make payments.
Thus, mortgage restructures go tango uniform.
*sigh* I’m a mere 30 years old, and I could run a bank better than these idiots.
We live under Obamao regime. He will continue to do this as long as he is in power.
That usually means cancellation of all or part of the debt.
*sigh* I’m a mere 30 years old, and I could run a bank better than these idiots.
Actually, the bankers are doing a pretty good job of playing the hand that was dealt them by this administration. Obama, Bernake and Paulson have threatened the banks with takeover, while keeping interest rates at basically zero, and complained about them not lending to small businesses while forcing them to make bad real estate loans.
The banks have been countering by taking the interest free money from the Federal Reserve and buying U.S. Treasury notes for a higher yield rather than risking it in an economy the administration seems determined to destroy. The banks are basically laundering the money back through the Treasury Department rather than risk it in an uncertain economy. Yet, they are profiting handsomely from this operation with a minimum of risk.
When they are forced to make bad mortgage loans they pass the responsibility on to Fannie Mae or Freddie Mac while still making a nice commission for making the loan. A win-win for the banks.
Was that Obama's plan or an unintended consequence?
Personally, I think it was a plan. There are rarely unintended consequences in liberal policies, they only use that as an excuse.
He keeps his financial fat cats happy while redistributing wealth from the upper and middle classes to the failed class. He makes sure the failed class stays failed, or is even increased, by destroying the economy with these same policies.
Why? To transform our economy from free enterprise to a centrally controlled one. I call it Communism but that term is out of favor at the moment so call it what you will. Keep in mind that Obama was raised and mentored by Communists and keeps himself surrounded by them until today.
However, human nature favors free enterprise and it always finds a way around government regulations like water seeking its own level through the path of least resistance.
If your house is underwater and this comes to pass I bet a lot of people like you are going to intentionally default to get a better deal. If you have equity in your home, basically your SOL.
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