Got to love them banks.
They get bailed out, and farm out the mortgage-mod grunt work to criminals, liars, and thieves (former <spit> mortgage brokers). How’s that working out?
In March, about 10% were actually finalized.
1/10 of one percent of all ‘mortage workouts’ actually see a reduction in principle.
Dr. Housing Bubble does an excellent job of bringing this part of the Grandest Boondoggle of Them All into sharper focus with each post. Folks, the Alt-A and option ARM tsunami is out in the middle of the Pacific and be assured, it is heading this way.
I’m not in favor of reducing principal per se, but when banks got such generous bailout terms that came right off the table (we’re in this mess together, like it or not). Shouldn’t the banks be encouraged to pass the savings on to the bailer-outers, i.e. underwater home-renters homedebtors?
That would work out similarly to the way the funding passed right through the golden goose of AIG- which shat out of their anus BILLIONS into the waiting mouths of Goldman Sucks.
BTW, a ‘workout’ completely favors the bank. If a workout is ever ‘successful’ (YMMV), it guarantees a life of indentured servitude. Term extensions, a short-term extension of the teaser rate, and small principal deferral are the main methods being used to bind the homedebtor slave.
Workouts are simply buying time, kicking the can down the road… and eventually today’s workouts fall permanently into the default column too.
You’re really better off walking away.
Debtors are the slaves to the world.