We need to give away FREE mortgages to MY people!
Where is the free helfcare at?
Posted on 03/01/2011 10:39:31 PM PST by rebel_yell2
Back in March 2009, the Obama administration unveiled the Home Affordable Modification Program, or HAMP, a program for helping delinquent borrowers save their homes from foreclosure - a problem that got worse again in reports released just last week. The goal of HAMP was to “help 3 to 4 million homeowners by 2012.” This phrase should have read “help or hurt” because hurt is exactly what has happened to hundreds of thousands of homeowners who have attempted to use HAMP to save their homes.
How is it possible that a program for providing mortgage modifications could hurt homeowners? To understand this, we need only look at how HAMP has worked - in practice.
(Excerpt) Read more at washingtontimes.com ...
A friends of mine just got her Making Homes Affordable modification program finalized. Her mortgage is $167,000 and she will pay $750 a month for 40 years with a balloon payment at the end of $100,000. They are still in their home but is it worth it? I don’t know.
Since this subject has been brought up, I will say that many people I know in my area have been stuggling because our once bustling area is now depressed. Many of my friends can barely or aren’t making their house payments and some of my friends have lost their homes and are living with friends or renting a little house, living in travel trailers, etc. Most comments I have read on FR about people losing their homes due to foreclosure is that they couldn’t afford a house in the first place, they are irresponsible, or they expect something free from the government. This is not always the case. Every person I know in this situation is a small businessman or woman and the lagging economy has hit our area hard. Just sayin’...
Some people who might be in a position to declare immediate bankruptcy don’t do that, gambling that they will be able to improve their lot soon enough that the bankruptcy filing will not be necessary. HAMP could be one of these attempted steps, and whether that was a bane (by stringing the homeowner along longer before he crashes and burns then walks free in bankruptcy, but with a credit report that now smells like a dead skunk) or a boon, is not known until the future.
I’m from the government and I’m here to help.
Like a Parkinson’s Disease sufferer performing surgery.
Half-Assed Marxist Program ?
Sorry to hear this—I hope their circumstances improve
“......Consider the case of one borrower I know who followed the advice of his servicer to default in order to qualify for a trial modification, as HAMP is only available to delinquent homeowners. This borrower successfully obtained a trial modification that reduced his monthly payment from $2,000 to just $1,200. The trials are supposed to last just three months, but after three months, this borrower was told to continue making the modified payments until a decision could be made on his application for a permanent modification. Eight months passed, with eight timely modified payments made to the servicer, and then the homeowner was notified that the application had been denied because of failure to file required paperwork that had, in fact, been filed but that the servicer had lost repeatedly. ProPublica reports that “losing documents and giving false information” is an almost universal complaint of respondents to its survey.
Worse yet, this homeowner was told that he was responsible not only for the next month’s full mortgage payment of $2,000, but also for the cumulative difference in the trial and full payments for the previous eight months (a total of $6,400), for late fees ($800), for foreclosure fees ($1,900) and for foreclosure attorney fees (1,400), a grand total of $10,500. This borrower, who was never advised of this possible outcome, did not have $10,500 saved up for such a contingency and could not comply. Instead, the servicer initiated foreclosure proceedings, where the situation now stands. Fortunately, this borrower lives in a judicial foreclosure state where the process can take longer. In a statutory foreclosure state like Virginia, the house likely would have been lost already at a sheriff’s sale....”
We need to give away FREE mortgages to MY people!
Where is the free helfcare at?
The article cited that the example had been making his payments of $2,000 on time each month and desired to have them reduced by entering the program to lower them to $1,200 per month. To qualify for the program he was to stop paying his mortgage and go into default.
What’s wrong with this picture?
Seems like they simply wanted $800 per month to buy “stuff” and other goodies since it was obvious that they were able to pay the mortgage in the first place. I would be very interested to see what type (and how many) automobiles they had and what other “goodies” they were paying for on credit.
Of the many things I have done through my life, one of them was a loan officer for a finance company. In that capacity I made “consolidation” loans to people who could not manage their finances in a responsible way. Once the consolidation loan was made the the many payments grouped into one lower monthly payment, they immediately went out and started financing more debt simply because they had some extra money to make new monthly payments.
The problem was that our financial system has created the fact that people don’t ask “how much does it cost” instead, they ask “how much a month is it?”
$750 x 12 = $9,000I don't know where you live but I were them I'd go see a Mobster (Italian) and get a Juice Loan. The 'vig' would be a whole lot less(1).
$9,000 x 40 = $360,000
$360,000 + $100,000 = $460,000$460,000 / $167,000 = 2.7545
2.7545 is = to 27.545% Interest
And if you fall behind with the Wiseguys they only break your leg. These Service Companies ruin your credit for life.
A broken leg is a better deal.
(1) Prime rate, fed funds, COFI, This week
WSJ Prime Rate: 3.25%
Federal Discount Rate: 0.75%
Fed Funds Rate (Current target rate 0-0.25): 0.25%
11th District Cost of Funds: 1.484%
Holy cow, the homeowner is supposed to ditch his credit rating to qualify for this crap? and only to be thrown overboard via missing or erroneous paperwork that’s not his fault?
I managed to get an accelerated veteran’s refi in just the nick of time late last year. (Not my fault that I was downsized 2 years before, now only earning a third of what I used to.) Hung on as long as I could, called intending to dare them to either lower the interest/payment or initiate foreclosure. They actually made the offer, sparing my pride. I can’t imagine purposely missing house payments. Jayzus, I never wanna return to the anxiety I went thru each month.
It is the Obama Rent to Own Plan. he modeled it after the place where is you have no, bad, little or (excellent - Obama added incentive) credit you can get a computer, stereo or many other home appliances and even furniture. The end result is the ballon payment that gets you.
This is not legal. But what do you expect he never intended to help people it was more of fluff and nonsense.
Your math is wrong. When you do a NPV calculation you will find that this is a 5.08% annual interest rate.
(Present value of $167,000, monthly payments of $750 for 480 months with a $100,000 lump sum payment at the end, results in a monthly interest rate of .4234) Multiply by 12 and this is an annual rate of 5.08
You have inadvertently reversed causality here: the current practice is what it is because people think in terms of monthly payments, not the other way around. Markets take people's preferences as given and satisfy them. They don't form those preferences. People's values are formed elsewhere. What is this tenderncy to blame the system?
What on earth does that equality sign mean?
The data you site show that the interest rate is 4.894% .
“site” shoud’ve been “cite,” of course. Sorry.
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