Oh Dear God!! Not again

[FactFinder]

If a house is underwater and the borrower defaults, the holder of the paper on that house is going to take a big loss because the market value of the house is much less than the amount owed.

If you lower the monthly mortgage payment for the borrower, you decrease the chances they will default. Therefore, you decrease the chances the banks will take a loss.

It is that simple. But apparently too complicated for simpletons who have an inexplicable need to make shit up.

A person who is 'underwater' on his house is not more likely to pay it off with a lower interset rate/lower payment. He would still be paying more than the house is worth, and his best bet for self is to default and let the bank take the loss.

It's that simple. But apparently too complicated for simpletons who have an inexplicable need to make shit up.

Let's see! It depends whether you have some optimism that the economy may turn around and the house again start increasing in value. If you want to stay stuck in a mindset of oblivion then "forget about it" your house is going to become worthless and you may even have to pay extra for the privilege of staying in your neighborhood in order to subsidize your less than desirable habitat.

 

[FactFinder]

Oh, if you just want to use your your home as a party central credit card then you better start searching elsewhere.

 

[Sunshine]

If a house is underwater and the borrower defaults, the holder of the paper on that house is going to take a big loss because the market value of the house is much less than the amount owed.

If you lower the monthly mortgage payment for the borrower, you decrease the chances they will default. Therefore, you decrease the chances the banks will take a loss.

It is that simple. But apparently too complicated for simpletons who have an inexplicable need to make shit up.

A person who is 'underwater' on his house is not more likely to pay it off with a lower interset rate/lower payment. He would still be paying more than the house is worth, and his best bet for self is to default and let the bank take the loss.

It's that simple. But apparently too complicated for simpletons who have an inexplicable need to make shit up.

Let's see! It depends whether you have some optimism that the economy may turn around and the house again start increasing in value. If you want to stay stuck in a mindset of oblivion then "forget about it" your house is going to become worthless and you may even have to pay extra for the privilege of staying in your neighborhood in order to subsidize your less than desirable habitat.

So you think people who have houses with negative equity should be optimistic. Groovy.

 

[Sunshine]

So, to repeat myself:

The program in the OP is vey simple.

Say you borrowed $300,000 at 7 percent interest. That means your monthly payment is roughly $2300.

Your house is now worth $250,000. Because the house is worth less than what you owe, you have not been able to refinance.

Current interest rates are less than 4 percent.

This program would allow you to refinance at that lower rate.

The monthly payment for $300,000 at 4 percent is $1750.

Your monthly payment would drop by $550.

If your current interest rate is 6 percent, you would see your monthly payment drop by $200.

Either way, this means you are more easily able to make your payments. Which means you are less likely to default.


THIS HAS NOTHING TO DO WITH BUYING A NEW HOUSE OR ORIGINATING MORE LOANS. IT IS ABOUT REFINANCING EXISTING LOANS.

Obiously you've never taken a mortgage. Or studied finance. When you refinance, you ARE taking a new loan. The old one is paid off, and sometimes there are penalties for early payment which people seem to not realize until they go to refinance. When you take a mortgage everything is already prepared, the forms are preprinted. They don't take those same forms and scratch out what's there to put in something new. Refinancing is a NEW loan. The old loan is paid off with it and you start from square one. That is NOT an attractive scenario.

I remember back in the 70s when people thought they had beat the system by finding a house with an 'assumable' loan. The problem there is for the person selling the house. He is still responsible for the loan. So if buyer moves in, trashes the house, and moves out, the original owner is still liable for the loan. A lot of sellers got in trouble in those days.

Chumps. Every damn one of you. You have made up your own definitions to these terms but you don't know jack shit. No wonder people in this country are so gullible.