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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’...

Some people who might be in a position to declare immediate bankruptcy don’t do that, gambling that they will be able to improve their lot soon enough that the bankruptcy filing will not be necessary. HAMP could be one of these attempted steps, and whether that was a bane (by stringing the homeowner along longer before he crashes and burns then walks free in bankruptcy, but with a credit report that now smells like a dead skunk) or a boon, is not known until the future.

*** friends of mine just got .. modification program finalized. ... mortgage is $167,000 and she will pay $750 a month for 40 years with a balloon payment at the end of $100,000 ***

$750 x 12 = $9,000
$9,000 x 40 = $360,000
$360,000 + $100,000 = $460,000
$460,000 / $167,000 = 2.7545
2.7545 is = to 27.545% Interest

I don't know where you live but I were them I'd go see a Mobster (Italian) and get a Juice Loan. The 'vig' would be a whole lot less₍₁₎.

And if you fall behind with the Wiseguys they only break your leg. These Service Companies ruin your credit for life.

A broken leg is a better deal.

(1) Prime rate, fed funds, COFI, This week
WSJ Prime Rate: 3.25%
Federal Discount Rate: 0.75%
Fed Funds Rate (Current target rate 0-0.25): 0.25%
11th District Cost of Funds: 1.484%