Secretary Paulson persuaded a few mortgage lenders to give delinquent borrowers an extra month to negotiate modification or repayment plans before seeking foreclosure. The FDIC has taken several steps to make it easier for struggling borrowers to repay their mortgages and stay in their homes.
Home financing regulators continue to walk a fine line between protecting the government from losses and helping delinquent homeowners avoid foreclosures. If officials modify too many mortgages or the banks suffer high defaults on modified loans, taxpayers will be stuck with an inflated bill.
Last month, The FDIC began issuing loan modifications by offering 25,000 borrowers from failed mortgage bank, Indy Mac Bank. The loan modifications provided lowered fixed interest rates that were intended to make their mortgage more affordable. It offered to trim interest rates on loans to as little as 3% in some cases, and offered a number of borrowers 40 and 50 years for repayment. Stretching out the amortization of these mortgage payments 10 or 20 years significantly lowers their monthly payment.
"If you do a bunch of mass modifications with borrowers who still can't handle the modified loans for any number of reasons, all you have done is rolled the foreclosure into the future," Mr. Ely said.
Now is the Time to get Into the Real Estate The riskiest home foreclosure investment is the foreclosure. Some of the risk includes the fact that you have no real estate agent to lead you through the process at the auction. You have no escrow and no title report, let alone title insurance, so you have no assurance that there are not other liens or loans on the property. You do not have any inspections by contractors, roofers, pest inspectors, building inspections, well or septic system experts. Read the complete foreclosure article. |
