Posted on 05/27/2009 8:26:16 PM PDT by FromLori
Modifying nontraditional mortgages will succeed for many people, but most such modifications will end up in default within a year, a major ratings company predicts.
The Fitch Ratings study examined subprime mortgages, jumbo loans and little-documented home loans that Wall Street bundled up to back mortgage bonds from 2005 through 2007. Those were the last years of the housing frenzy before delinquencies skyrocketed, home prices plummeted and investors' appetite for such "private-label" securities evaporated.
Mortgage modifications may not stem foreclosures, Fed economists say
Fitch based its projection partly on "shrinking disposable income, escalating job losses and possibly some deceptive practices on the part of the borrowers themselves," the New York company said.
The estimate comes as lenders and regulators, along with the Obama administration's $75-billion Making Home Affordable program, step up efforts to get mortgage terms modified to stem soaring foreclosures.
"Loan modifications hold clear value for many homeowners provided the modified payments are sustainable, but more often than not, reducing the home payments to an affordable level may not be enough to rescue borrowers who are overextended on other credit and expenses," said Diane Pendley, a managing director at Fitch.
The study said borrowers who are current on their loans are angry that others who took on too much debt and missed payments are benefiting from lowered interest rates, extended repayment terms and other modifications. There is also evidence that some able borrowers are choosing not to honor their obligations, the study said.
(Excerpt) Read more at latimes.com ...
Ya think?
Let me get this straight. If I choose to pay my loan, I get nothing and I have to help pay your's. If you choose not to pay, they'll keep giving you my money indefinitely. I can see how, just maybe, there could be some people, especially the kind of people who lied to get the loan they could not afford in the first place, who might possibly, under the current political regime, abuse this policy. Yep, it could happen.
By the time all of this madness is over with, the amount of money spent trying to ‘fix it’ would probably have been enough to pay off every mortgage in America for households making under the magical $250,000 income level.
Instead, we have trillions wasted, and little to show for it if anything...
You sound like a mean-spirited conservative. Maybe even a racist, huh?
What is your problem??? You left our homophobe and bigot!
Man, Lori, all the bad news traces back to you.
Rinse. Lather. Repeat.
Don’t shoot the messenger for telling you real world news the communist news networks do not seem to widely share lol
Actually the total outstanding mortgages in the USA are about $4T. Obama has already committed close to $10T between the various programs and the lending/TARP/TANF etc. that the Fed is involved in.
So, he could have paid off every mortgage AND every credit card for every american family? Then taxed us all at 50 percent? Gee, I think I would have preferred that than having to struggle with all the debt, shrinking job markets and being taxed at 50 percent in the long run (when free healthcare for all kicks in).
I said it then, and I say it now, it would have been better giving it to us instead of banks, automakers, acorn, and investors since we are all going to pay for it anyway.
LOL. Sorry...I forgot to add 'sarcasm'.
It's our damn money to begin with!
Sadly, it is Chinas money, we just borrowed it and have to pay it back, with interest! At least we could have had the benefit of the money had they just paid off everyones mortgage and credit card debt. One big consolidation loan. We then could have begun spending a bit, and businesses could have begun the difficult task of gearing up some for a consumer with a few bucks in their pockets. We could have begun saving money, folks would not be in forclosure, and the banks would have all gotten their money back and been solvent. The money would have gone through us to them instead of directly to them, and both sides would have benefited. Same with the credit card companies, money through us, to them. Would have been exactly the same result, but with a better outcome for the little folks who are going to pay for it anyway. Now its too late, and the money is gone, so are the jobs, companies, and chance to fix it, but we still gotta pay for it. They really are brain dead on the hill.
"Out", not "our" ... I assume you got it, being a bigoted, homophobe like me and all...
You left out pervert and wife beater.
That was never proven in a court of law...
LOL, Ok, I won’t. Just try to keep your spirits up.
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