One of the more notable replies on CR's blog tonight:
The freeze cannot work. Let me try a couple of scenarios here.
1. Mr. Freeze stops a reset on a mortgage that is neg-am, or interest only. Unless the loan is rewritten such that the teaser rate is calculated as THE rate and is fully ammortized, then when the defrost button is pushed on the giant microwave in the sky, the reset will cause the freshly thawed meat (homedebtors) heart attacks.
2. If it locks rates on a subslime ARM, and the house isn't upside down, then why wouldn't the homedebtor get a fixed thirty refi...fear of fraud allegations? And if that is the case, jingle mail is the only option.
If it locks rates on those that are upside down, given that rents are lower than there mortgage and other asundries, why not jingle mail?
This completely ignores the fact that the actual owners of these mortgages will sue the servicer's in droves. Anyone who thinks Congang can alter contract terms after the fact is a bit daft. There's a whole lot of case law, and statuatory and Con law, and contract law, about bills of attainder and "changing the rules after the fact".
You can slap some wings on this pig, but when you push it off a cliff it's going to do a Wile E. Coyote.
Cheers,
Misean | 12.05.07 - 8:18 pm | #
I love the "giant microwave" scenario at the end of the deep freeze, except I envision the homedebtor exploding like a microwaved gerbil when it's turned on..... |
