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Politics : Formerly About Advanced Micro Devices

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From: bentway	12/23/2008 11:58:00 AM
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Fannie/Freddie - Come Get Your Loan Mod & Pay For Life mrmortgage.ml-implode.com Posted on December 17th, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage's Personal Opinions/Research The Fonie & Fraudie loan mod push is on. They are pushing some of the highly leveraged exotic loan programs ever created. These loan mods make Pay Option ARMs look conservative. Why in the world do they think they are helping people by locking them into long-term upside down financing that is orders of magnitude more exotic than the loan on which they are currently in default. These mods are even more aggressive than the FDIC’s (IndyMac). * Mr Mortgage: Actual IndyMac (Exotic) Loan Modification (54) Posted on December 3, 2008 2:13 PM This is an absolute disaster. I have written volumes on these terrible loan modifications and now this great experiment finally begins. The story below should make you cringe if you are a homeowner or someone looking to buy or sell. If this is widely accepted, the implications are unknowable. Coming to mind right away is permanent loss of a large portion of the US consumer base due to the massive leverage this program requires. Wide scale new loan defaults also come to mind as I foresee home owners looking for relief due to macro economic worries that may not really need. This will not end well. Home owners! Accepting this ’solution’ means you: * acknowledge the full debt regardless of the value of the home; * waive all rights to fraudulent or predatory lending claims in the future; * turn your loan into a full recourse loan that could follow you for life even if you choose foreclosure down the road; * remain underwater, full-leveraged, renter for the rest of your life (in most cases); * will save no money at 38% housing debt-to-income ratio plus all other debts; * may not discharge any of this mortgage debt through any bankruptcy even after foreclosure; If widely accepted by home owners, this will ruin the American consumer and make housing a dead asset class for decades. If you are in a serious negative equity position when signing these forms, as most are, remember that you will: * never be able to sell your home * never be able to buy a new home * never be able to rent your home due to owner occupant provisions * be responsible for the full loan amount even if the value of your home keeps dropping for the next 10-years. The 38% debt-to-income ratio on top of all of your other debt means you will save no money and live hand to mouth to keep this underwater roof over your head. For those of you who do not care about being underwater in your home but only wanted a lower payment, this is your green light to default. Your new terms are outlined below. In my opinion, many of those who qualify for this plan would be better to walk away, which is precisely the reason they rolled this out. Please, please consult your financial adviser before doing anything of this sort.

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