I read an article on CNN Online that talks about the mortgage modifications that IndyMac and BofA are doing - if you have a mortgage with either you should read the article, you may be able to get help on your mortgage payment. Here is a portion of the article; read the full article at http://money.cnn.com/2008/10/24/real_estate/indymac_solution/index.htm?postversion=2008102416
One failed bank gets the housing fix right
When the FDIC seized mortgage giant IndyMac it was one of the biggest bank failures ever. Now the troubled lender just may lead us out of the housing mess.
By Amanda Gengler, Money Magazine writer
"Under IndyMac's program, the lender modifies a loan so that the borrower's new mortgage payment, including insurance and taxes, eats up no more than 38% of their pre-tax income. This percentage, known as a debt to income ratio, topped 50% for some loans during the boom.
To achieve this lower payment, IndyMac can lower the interest rate, extend the life of the loan to, say, 30 or 40 years, defer some principal to the final years of the loan, or a use a combination of these strategies.
IndyMac is also trying to simplify the process for borrowers. It is overnighting loan forms to eligible customers with a signature required upon receipt. "It doesn't show up with your regular mail, coupons and junk mail, because the key is getting the consumer to open it," said FDIC spokesman David Barr.
The papers clearly spell out a borrower's new loan terms, including the interest rate and monthly payments over the life of the loan. The borrower simply signs and returns the documents with the first lower monthly payment.
B of A follows suit
Bank of America (BAC, Fortune 500) launched a similarly systematic program earlier in October. That program, scheduled to start in December, came as part of a settlement with state attorney general offices that sued Countrywide, which B of A recently acquired, for predatory lending practices. It's expected to help 400,000 troubled borrowers and is actually slightly more aggressive than IndyMac's plan.
B of A will use a 34% debt-to-income ratio to calculate the affordable monthly payment for its customers, and may also write down the principal balance of some negative amortizing loans. IndyMac will not forgive debt, but instead will add principal to the final years of a loan if necessary.
Additionally, IndyMac's program is now being applied to many delinquent loans owned by Freddie Mac (FRE, Fortune 500), Fannie Mae (FNM, Fortune 500) and other investors, Bair said in her testimony Thursday."
Showing posts with label real estate. Show all posts
Showing posts with label real estate. Show all posts
9/26/2008
Why Do I Feel Like We're at Odds With Our Roots?
My husband has an uncanny way of being right, even when he's being annoying! Now he's not right about everything all the time, but he looks at the world in a very different way than I do.
He didn't understand the stock market crazy days...to him the fundamentals just didn't support what was going on. Same with the real estate boom...he kept saying to me it just can't keep going like it is.
So now he is saying too many people are making money from nothing, i.e., affiliate marketing on the internet, etc., where people are making money on referring people to other people who actually have a product to sell. He just shakes his head and says it doesn't make any sense. You work for money, you don't just shuffle things around and make money off of someone else's product, it just doesn't make sense.
And interestingly I know someone who makes a lot of money doing that, but he admits that it's short-lived. As soon as they figure out they can do it for themselves he's shut off and he has to go and recreate the model elsewhere.
My husband's not a big fan of the internet overall...but when he talks about something not making sense I do (finally!) take notice. He has been right more often than he's been wrong. So he's given me more to think about. Some will tell you the internet makes everything possible, there is no limit. But then I think about my friend who keeps having to recreate his model and I wonder how many times he really can do that.
A day's wage for a day's work. "Any necessary work that pays an honest wage carries its own honor and dignity." -- W. Kelly Griffith
Comments anyone?
He didn't understand the stock market crazy days...to him the fundamentals just didn't support what was going on. Same with the real estate boom...he kept saying to me it just can't keep going like it is.
So now he is saying too many people are making money from nothing, i.e., affiliate marketing on the internet, etc., where people are making money on referring people to other people who actually have a product to sell. He just shakes his head and says it doesn't make any sense. You work for money, you don't just shuffle things around and make money off of someone else's product, it just doesn't make sense.
And interestingly I know someone who makes a lot of money doing that, but he admits that it's short-lived. As soon as they figure out they can do it for themselves he's shut off and he has to go and recreate the model elsewhere.
My husband's not a big fan of the internet overall...but when he talks about something not making sense I do (finally!) take notice. He has been right more often than he's been wrong. So he's given me more to think about. Some will tell you the internet makes everything possible, there is no limit. But then I think about my friend who keeps having to recreate his model and I wonder how many times he really can do that.
A day's wage for a day's work. "Any necessary work that pays an honest wage carries its own honor and dignity." -- W. Kelly Griffith
Comments anyone?
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