Here's part of an article from July 15 says that a lot of people getting their mortgages revamped, meaning the terms changed to make them easier to pay, has NOT worked:
Roughly 25% of the mortgage modifications Citigroup (C: 38.38 -1.64%) completed through its own private programs redefaulted over the past two years, the bank's Chief Financial Officer John Gerspach said Friday.
Over the past nine quarters, the bank converted $5.7 billion in a trial modification into permanent status. More than three-quarters of these went through the government's Home Affordable Modification Program. Redefault rates on these HAMP workouts totaled less than 15%.
I guess this means you ought to only borrow what you think you can repay easily. Too many people got "no principal for 3 yrs" loans at the top of what they could pay when only interest payments, so when 3 yrs kicked in and principal also was added to the loan, they couldn't afford the payments. I thought these were silly loans while being made, and so happy our local banks weren't foolish enough to make these loans. That's why Amarillo hasn't had the number of foreclosures the rest of the country.
Would like to know what you think, comment please.
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