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A friends of mine just got her Making Homes Affordable modification program finalized. Her mortgage is $167,000 and she will pay $750 a month for 40 years with a balloon payment at the end of $100,000. They are still in their home but is it worth it? I don’t know.

Since this subject has been brought up, I will say that many people I know in my area have been stuggling because our once bustling area is now depressed. Many of my friends can barely or aren’t making their house payments and some of my friends have lost their homes and are living with friends or renting a little house, living in travel trailers, etc. Most comments I have read on FR about people losing their homes due to foreclosure is that they couldn’t afford a house in the first place, they are irresponsible, or they expect something free from the government. This is not always the case. Every person I know in this situation is a small businessman or woman and the lagging economy has hit our area hard. Just sayin’...

“......Consider the case of one borrower I know who followed the advice of his servicer to default in order to qualify for a trial modification, as HAMP is only available to delinquent homeowners. This borrower successfully obtained a trial modification that reduced his monthly payment from $2,000 to just $1,200. The trials are supposed to last just three months, but after three months, this borrower was told to continue making the modified payments until a decision could be made on his application for a permanent modification. Eight months passed, with eight timely modified payments made to the servicer, and then the homeowner was notified that the application had been denied because of failure to file required paperwork that had, in fact, been filed but that the servicer had lost repeatedly. ProPublica reports that “losing documents and giving false information” is an almost universal complaint of respondents to its survey.

Worse yet, this homeowner was told that he was responsible not only for the next month’s full mortgage payment of $2,000, but also for the cumulative difference in the trial and full payments for the previous eight months (a total of $6,400), for late fees ($800), for foreclosure fees ($1,900) and for foreclosure attorney fees (1,400), a grand total of $10,500. This borrower, who was never advised of this possible outcome, did not have $10,500 saved up for such a contingency and could not comply. Instead, the servicer initiated foreclosure proceedings, where the situation now stands. Fortunately, this borrower lives in a judicial foreclosure state where the process can take longer. In a statutory foreclosure state like Virginia, the house likely would have been lost already at a sheriff’s sale....”

The article cited that the example had been making his payments of $2,000 on time each month and desired to have them reduced by entering the program to lower them to $1,200 per month. To qualify for the program he was to stop paying his mortgage and go into default.

What’s wrong with this picture?

Seems like they simply wanted $800 per month to buy “stuff” and other goodies since it was obvious that they were able to pay the mortgage in the first place. I would be very interested to see what type (and how many) automobiles they had and what other “goodies” they were paying for on credit.

Of the many things I have done through my life, one of them was a loan officer for a finance company. In that capacity I made “consolidation” loans to people who could not manage their finances in a responsible way. Once the consolidation loan was made the the many payments grouped into one lower monthly payment, they immediately went out and started financing more debt simply because they had some extra money to make new monthly payments.

The problem was that our financial system has created the fact that people don’t ask “how much does it cost” instead, they ask “how much a month is it?”

Holy cow, the homeowner is supposed to ditch his credit rating to qualify for this crap? and only to be thrown overboard via missing or erroneous paperwork that’s not his fault?

I managed to get an accelerated veteran’s refi in just the nick of time late last year. (Not my fault that I was downsized 2 years before, now only earning a third of what I used to.) Hung on as long as I could, called intending to dare them to either lower the interest/payment or initiate foreclosure. They actually made the offer, sparing my pride. I can’t imagine purposely missing house payments. Jayzus, I never wanna return to the anxiety I went thru each month.

It is the Obama Rent to Own Plan. he modeled it after the place where is you have no, bad, little or (excellent - Obama added incentive) credit you can get a computer, stereo or many other home appliances and even furniture. The end result is the ballon payment that gets you.

This is not legal. But what do you expect he never intended to help people it was more of fluff and nonsense.