Could this be TRUE?

badcandy_IHB

badcandy_IHB

New member
(I blame IHB for introducing me to LoanSafe. :p)



http://www.loansafe.org/forum/citi-...-help-center/12462-sale-date-3-days-away.html



In this particular thread, the poster claims that his house is being sold in 3 days, but manages to get a loan mod... thus he stays in the house and the auction is postponed and then canceled. <em>(I wonder if this is what is going on with the trustee sale dates being postponed on short notice thing I've been reading about?)</em>



I never cease to be amazed by the numbers some of these people claim they are being offered for mods... but I have to wonder, is it true?
 
<a href="http://www.loansafe.org/forum/citi-mortgage-citi-financial-homeowner-help-center/12462-sale-date-3-days-away.html">Link</a>
 
[quote author="no_vaseline" date=1247352750]Extend. Pretend. Send.</blockquote>


I like the term economic zombies myself.



<a href="http://www.ritholtz.com/blog/2009/07/how-often-do-loan-mods-fail/">How Often Do Loan Mods Fail?</a>



<em>Mark Hanson of Hanson Advisors (via Barron?s) on why Loan mods are not the answer.



As the tables below show, loan mods seem to lead to subsequent default with distressing regularity.



They illustrate the fundamental flaw in the notion, widely embraced, not least by the Obama administration, that loan modification is salvation for troubled homeowners, beleaguered builders and lenders. Bull, says Mark:



<blockquote>?Loan mods are designed to keep the unpaid principal balances of the lender?s loans intact while re-levering the borrower. Mortgage modifications turn homeowners into underwater, overlevered renters for life, unable to sell, re-buy, refi, shop or save. <strong>They turn homeowners into economic zombies.</strong>?</blockquote>


Consider the tables below: On the left we see the re-default rates of homeowners who were current on their loans when they first defaulted (sounds odd, I know, but these tend to be people who can afford their homes but who subsequently ran into economic problems). The data tells us how many of them have defaulted again 10 months after their loans were modified.



The adjacent table (at right) shows the same thing, only this time with homeowers who were seriously delinquent prior to loan mods. As you would imagine, their re-default rates 10 months after their loans were modified are considerably higher. These are often the people who could barely afford their home (or not at all).</em>



http://www.ritholtz.com/blog/wp-content/uploads/2009/07/loan_-mods-20090710.gif
 
You must log in or register to reply here.
Back
Top