Originally posted by Samueul:
Originally posted by MattyX:
[b]It's a measure to help the borrowers AND the lenders. It's better for the economy if the housing market is not flooded with foreclosures. It's better for the banks to not have to sell houses because they'd rather sit back and collect mortgage payments. They'd probably lose lots of money on any sales they did manage to close, anyway. Its better for borrowers because they can keep their homes.
I don't see a downside to this as long as it is a stopgap measure and not a permanent "solution." Lotsa folks hate to see anyone else get a good deal. It doesn't affect you, so quit hatin.
I haven't heard any such details. I doubt the lenders would agree to freeze the rates only of the borrowers who miss payments. I think that the criteria would be different- borrowers with credit ratings below X, or debt-to-income ratio Y:Z, regardless of their respective histories. A loan doesn't become "subprime" because people miss payments.
So Burg's rate might freeze, or he may have the option, depending on the particulars.
Organdonor, why are you lucky that "it was a cash sale"? Were you planning on lending to your home's purchaser?
FWIW there have been lots of predatory lending practices over the past decade. Without unscrupulous lending this whole problem never happens.
edit to add::
According to The Wall Street Journal, you qualify for a rate freeze if:
* You took out a subprime adjustable-rate mortgage between Jan. 1, 2005, and July 1, 2007.
* Your first rate reset occurs between Jan. 1, 2008, and July 1, 2010.
* Your loan has been packed into a security and resold. You do not qualify if the bank holds your loan.
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