Realtor coaching students….changes coming soon to a troubled housing market near you….
Expect to see a national 90 day foreclosure moratorium starting soon. The thinking behind this is that by delaying foreclosure proceedings the banks and homeowners will have added time to negotiated a loan modification. Understand that most loan modifications offer these 3 ’solutions’
1) Reduce the interest rate. Thus, lower payment.
2) Rework the actual mortgage. Adjustable rate mortgage becomes a fixed rate etc.
3) In some VERY VERY rare cases…reduction of the actual outstanding principle amount of the mortgage (s).
Does this get at the true heart of the problem? Isn’t the real problem the simple fact that millions of homes are ‘under water’ whereby the sellers simply owe more on the homes than they are worth?
This WSJ story discuesses possible additional options for using the TARP. Seesm that a mortgage modification program will be announced soon:
The report addresses the issue of trying to slow the record levels of foreclosures. “In particular, Treasury will continue efforts to ensure loan modifications are sustainable,” said the report. A separate Treasury report detailing minutes of an Oct. 13 meeting of members of the Financial Stability Oversight Board suggested the Treasury is focusing on how to address ailing mortgages.
…
[T]he Treasury, the Federal Deposit Insurance Corp. and other government agencies are said to be close to announcing a government program to address residential foreclosures at the root of the crisis.
Meanwhile, in California, Governor Schwarzenegger is seeking a 90 day delay on foreclosures - from Bloomberg: Schwarzenegger Seeks to Save Homeowners With Foreclosure Delay
California Governor Arnold Schwarzenegger proposed a 90-day stay on home foreclosures in California … Schwarzenegger said he will ask lawmakers to consider delaying foreclosures when he orders them into a special session tomorrow to deal with the state’s ballooning budget deficit.
{ 0 comments… add one now }