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Old 03-25-2012, 02:42 PM
 
Location: Salem, OR
15,539 posts, read 40,308,808 times
Reputation: 17422

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Quote:
Originally Posted by Ted Bear View Post
I have not delved into the details of this program, but my gut tells me there is a reason why B Of A is doing this, and it might not (probably isn't) to help the homeowner.

I am B of A, and you have chosen to not make your mortgage payments, but i know you have a 'good' property, and have 'income'.

So i take over your house, and you pay me rent for a period of time, which covers my carrying costs.

As B of A, i only elect to do this where the likelihood of a pop in housing prices will rise above what you currently owe me on the mortgage.

So, if Bo of A is correct, i take you out of your house at the bottom of the market; you pay me carrying costs in the form of rent, which also helps to reduce the mortgage loan hit i take when i forgive the mortgage.

Then, my prediction that the market has bottomed comes true in three years, i kick you out, and sell the property for a gain?

Isn't this what all of the talking heads have been asking for? How do i get into single family residency investment, without the hassle of finding tennants for each of the properties.

I guess i am just being nefarious, but i have NEVER seen B of A do anything which wasn't for the immediate and direct benefit of B of A.
Of course it isn't to help the homeowner. This is strictly a financial move by B of A. They have many people that are strategically defaulting and they have MERS issues with the Countrywide loans. The Deed-in-lieu resolves some of that problem, depending on state laws.

Think about it.

You are going to strategically default. BofA determines that you can pay market rent, which in most cases will be substantially less than your mortgage. You get all your debt written off with no deficiency judgements. You get to stay in your house for three years. Why not do it? At that point you are really close to being able to purchase a house again so you rent for a year or so then buy again. If an investor buys the property, you might even get to stay in the house until you are eligible to buy again. Sheesh...you might even be able to buy your own house back.
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Old 03-27-2012, 10:27 AM
 
Location: 3rd Rock fts
762 posts, read 1,097,458 times
Reputation: 304
As 1 poster already said; this could work out. I think the BANKS are ripe for some minor capitulation—they have a cash flow/asset problem! As long as the Gov't can stand their ground (don't give away too much) it can/may work out.

The Gov't over-protection (moral hazard) of the marginal homeowner has to end as well. There’s some suppositional talk/links here: //www.city-data.com/forum/forec...eclosures.html that relates to cash flow & house deflation concerns.

I wonder what took them so long? The Gov’t could not get the TBTF Banks to chance their name(s).
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