http://finance.yahoo.com/news/Fanni...tml?x=0&sec=topStories&pos=main&asset=&ccode= -------------------------------------------------- Enough already!!! Let them go under.
This is bullshit. Let them fail. I'm sick and tired of having to pay the system for other's stupidity.
They say this is to help people stay in their homes, but no really. No one really care about that. They do this to keep the supply of house DOWN. If people have their home foreclosed, they make them leave, and that is another house for the market,(oversupply) BUT if they can make the deal to pay RENT for one more year, this is less house on the market (supply) AND still have some cash coming from the house, AND the bank own that house. So the same people who buy the house, then lose the house, STILL PAY FOR THE HOUSE THE BANK OWN.
p.s. What happen when (SUPPLY) of house is become (LESS) than demand? House price will go UP. Now people who rent that house (pay for the morgage but not own) will no see appeciation (gain) of the house they before own. But the bank will.
Any property owner upside down is better off not paying any mortgage, property taxes, insurance and let them foreclose. No different than trading... cut your losses... The foreclosure process is not expedient and the cash saved actually allows the property owner to take equity out in cash. The home owner can buy another's distressed home for 50 cents on the dollar in the future. There are some interesting property liabilities that transfer to the bank and/or lien holder. Foreclosed properties comes with expenses: legal fees, back and current property taxes, insurance, utilities, assessments etc. Plus a 1 - 2 year foreclosure proceeding. These banks are already sitting on a 25% loss and are forced to pony up additional cash and exposure to liabilities as the owner of the property in two years they have 40% - 50% loan losses plus mark to market accounting... SOL The distressed home owner takes equity out in cash saved each month plus he gets to live rent free. If the home owner stalls it out for 2 years he takes more equity out in saved cash than he could possibly have in the property in 10 years. If you are upside down owing more than your house is worth and your house is going down in value... Stop your losses... Pay no one and pocket the monthly mortgage, insurance, taxes... suck out every cent of equity you can and let them go through the courts. Do not negotiate any settlement, your objective is simply to minimize your loss on a bad investment.
Together, Fannie and Freddie own or guarantee almost 31 million home loans worth about $5.5 trillion. That's about half of all mortgages.