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Old 07-25-2008, 04:38 PM
 
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Just saw a segment on NBC Nightly News about people in DC going to a Mortgage Crisis Seminar. They interviewed a couple hoping to save their home from foreclosure. Their hopes hinged on being able to refinance their mortgage from a 7% fixed to a 3% fixed rate.

Am I missing something?? How is 3% fixed even possible?

Last edited by North_Raleigh_Guy; 07-25-2008 at 04:46 PM..
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Old 07-25-2008, 04:59 PM
 
2,639 posts, read 5,056,610 times
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Quote:
Originally Posted by North_Raleigh_Guy View Post
Just saw a segment on NBC Nightly News about people in DC going to a Mortgage Crisis Seminar. They interviewed a couple hoping to save their home from foreclosure. Their hopes hinged on being able to refinance their mortgage from a 7% fixed to a 3% fixed rate.

Am I missing something?? How is 3% fixed even possible?
Likely using government funding to "subsidize" part of the outstanding and reamortize what the borrower really owes. Either that, or the bank is eating the loss, though I can't imagine that being the case.

It also might be a 7 year fixed term, which could potentially yield a lower percentage.
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Old 07-25-2008, 05:32 PM
 
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Where do I sign up? So much for being responsible...
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Old 07-25-2008, 05:38 PM
 
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Got cash?
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Old 07-25-2008, 07:12 PM
 
Location: Cary, NC
1,036 posts, read 3,627,489 times
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Wow.... I always paid my mortgage on time... I feel like an idiot.

I have a borrower now that wants the same thing. His rate is 6.5% fixed for 30 years, reduced PMI because of the My Community Program. But if we won't refinance him into a lower rate he insists he will badger than bank and stop paying his mortgage until they do. That's the problem with bailouts, the people with good credit are getting penalized for being responsible.

I remember when I bought in 2000, an 8% fixed rate with FHA was an AMAZING deal. If you could not afford the rate, you bought a cheaper home or did not buy until you saved or earned more.
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Old 07-26-2008, 12:17 AM
 
Location: San Diego CA
1,030 posts, read 1,996,187 times
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Quote:
Originally Posted by North_Raleigh_Guy View Post
Just saw a segment on NBC Nightly News about people in DC going to a Mortgage Crisis Seminar. They interviewed a couple hoping to save their home from foreclosure. Their hopes hinged on being able to refinance their mortgage from a 7% fixed to a 3% fixed rate.

Am I missing something?? How is 3% fixed even possible?
This was the Loan Modification Team. Modifying loans in DC. Not refinance.


The website is loansafe.org
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Old 07-26-2008, 04:40 AM
 
Location: San Antonio
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Under loansafe.org there is a very interesting article on loan modifications :
http://www.nytimes.com/2008/07/13/bu...Aqi8EHe2y9%20g
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Old 07-26-2008, 06:33 AM
 
Location: Gainesville, VA
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Yeah, I keep reading these same sort of stories in my local paper... The Washington Post. It makes me so mad that here I am busting my arse for my mortgage and always pay it on time, yet I'm not getting a break? But if my neighbor doesn't pay his mortgage for awhile, he can go and get reduction in their interest rate... lower than mine?
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Old 07-26-2008, 09:06 AM
 
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Here's my take on it.

I'm in the process of buying a home. It's been a long, winding road, evident by my various blog entries, but I think I'm at the finish line...we'll see how effective my agent is. If it works, it's a double boon for me.

Anyway, my current rent payment is close to $1800/month. I pay it diligently, never received even a late notice. That helped prove to the bank that I'm more than capable of handling a $1600 mortgage payment, especially since I would then get a tax break that would free up even more money that right now I'm losing like running water.

I agree with some measure of resolving the issue for those buyers who truly were shafted by the bank. There is some responsibility on the buyer that was absent when they signed the paper, yes. But "stated income", IMO, was just blatantly egregious. For those borrowers, I think a loan modification is in order.

I don't know why the government doesn't just require the banks to (and I know it'll take a lot of manpower, that's part of the punishment) go through each and every account heading towards default, and reach out to offer a refinance...full docs, full underwrite, the whole nine...while the loan is temporarily suspended. If the borrower does not qualify with the terms as they stand, do a loan mod. If there's no way that borrower could possibly own the home (i.e they're on welfare!), bank accepts DIL and lets the borrower walk.
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Old 07-26-2008, 11:15 AM
GLS
 
1,985 posts, read 4,739,430 times
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Quote:
Originally Posted by North_Raleigh_Guy View Post
Just saw a segment on NBC Nightly News about people in DC going to a Mortgage Crisis Seminar. They interviewed a couple hoping to save their home from foreclosure. Their hopes hinged on being able to refinance their mortgage from a 7% fixed to a 3% fixed rate.

Am I missing something?? How is 3% fixed even possible?
With the tax proceeds from people like you and me, who only have access to normal market rates and pay their bills responsibly.
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