bostonbubble.com

[HousingStorm]

http://housingstorm.com/2009/09/is-it-too-early-to-declare-mortgage-modifications-a-complete-failure/

Inside the OCC and OTS Mortgage Metrics Report (mentioned briefly this morning), is a collection of charts and graphs depicting mortgage re-default rates after loan modifications. To say the least, the information is damning.

Is it too early to declare mortgage modifications a complete failure?

Here is a series of revealing charts:
[/url]

[Renting in Mass]

Those are pretty bad numbers. It seems clear that loan modifications will continue to fail at greater than 50% one year out. And it's getting worse rather than better.

When you say "Our loans don’t need to be modified, they need to be un-done," are you referring to principle reduction?

I'm all for that. I'll buy a house with a mortgage of say 400k, which is 100k more than I can afford. Then the bank will reduce my principle by 100k. That's how it would work, right Or how about the bank just gives me 100k now!

[balor123]

No you have to lie about your income first. If you can prove that you lied, then they'll give you 100k. And, um, while you're at it, would you mind buying a house on the market that's $350k? I'll buy it first, then you buy it from me for $400k then the bank reduces your mortgage to $300k and we each net $50k. Bank gets reimbursed from government. Everybody wins!

[Renting in Mass]

No you have to lie about your income first.

Too true!