Ya think it'll work?
"The Obama administration on Tuesday will launch its most ambitious effort at reducing mortgage balances for homeowners who owe more than their homes are worth. Officials say between 500,000 and 1.5 million so-called underwater loans could be modified through the program . . . Under the new "short refinance" program, banks and other creditors that write down mortgages to less than the value of the property can essentially hand off the reduced loan to the government."
P.S. I thought this video was a funny representation of the economy. Something about the short-lived enthusiasm of the "green shoots" made me think of the analogy.
Sunday, September 5, 2010
Reducing Mortgage Balances
Posted by Harriet at 1:39 AM
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8 comments:
They wouldn't dare do that. It would be political suicide. Stealing from the majority of the populace - the responsible people - and giving de facto tons of cash to a minority of bubble flipping morons is a great way to seal your fate in November.
It is just another in a long string of amateurish policies.
Hmmm, people are underwater on their mortgages... lets give them billions of dollars borrowed against Uncle Sam's checkbook.
(I also love how TARP has turned into the president's own personal slush fund.)
I guess we'll find out tomorrow, Kevin. This story got lost somehow. I saw it posted at the WSJ and somewhere else, but it didn't get picked up by CR.
This is different from the rumor that went out on August 5th about Freddie and Fannie, etc. I think this involves the banks forgiving the loans, not the government. (To put it simply).
Good luck with that.
All-
If this is the program that I think it is the banks would need to forgive some amount of the principal and then the fed would pay give the bank the money for the loan and issue the person a new loan under FHA at current interest rates. I would think banks will be willing to use this program for some of their subprime and option ARM loans, but not prime loans.
This program will decrease loss severity on loans that would default anyway, but obviously it is better for the bank to keep the loan if the person would continue to pay. So it only makes sense to use program for loans you are confident will default.
is this a typical Woodson district below $400K house?
MM-
Probably, Woodson has several really nice areas it draws from and some less expensive areas. Fairfax Station and Mantua will have nicer houses. The condos/townhouses on 236 can be less nice and go for a lot less.
another one from random Labor Day browsing
MM-
Have you started looking at the Woodson area seriously, or was this just a random thing you looked at over the long weekend?
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