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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Chispas who wrote (83750)	8/24/2008 11:41:05 PM
From: Sr K	Read Replies (2) of 116555

>>these people have a much easier way of getting out of the problem. They can simply hand the house keys - and the assured losses - back to their mortgage and home equity lenders << Only fools would do that or recommend that. It's the same principle as when you have a fixed rate loan and rates drop. When the borrower has no equity, if the lender wants to keep the "deal," he has to meet the current market, or you can force the mortgagee to "realize the loss" unless he agrees to a mortgage modification. With a good lawyer or negotiator, in today's market you can get a modification in rate and a reduction in principal in a combination that is better for a lender than a foreclosure and better for the mortgagor than just walking away. If you like where you live, and you know what you are doing, you can stay there under terms that reflect the current market. As a sweetener, anyone with a low doc or no doc loan that was so because of time pressure to close (they are not all liar loans), should offer full docs as part of the modification. It's all part of buying and selling debt.

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