Comments on: 25% of Borrowers Who Received Mortgage Payment Reductions Fell Behind Again http://allfinancialmatters.com/2009/06/30/25-of-borrowers-who-received-mortgage-payment-reductions-fell-behind-again/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Fri, 20 Nov 2009 19:56:44 -0800 http://wordpress.org/?v=abc hourly 1 By: Diasdiem http://allfinancialmatters.com/2009/06/30/25-of-borrowers-who-received-mortgage-payment-reductions-fell-behind-again/comment-page-1/#comment-428183 Diasdiem Wed, 01 Jul 2009 14:19:10 +0000 http://allfinancialmatters.com/?p=3586#comment-428183 I would think the only real way of gauging the success or failure would be in estimating approximately how many of those 75% would have been able to pay their mortgages without a reduction and how many wouldn't. If most of them would have been able to catch up and pay, then there really wasn't much point. If they would have all defaulted and gone into foreclosure, then at least this way people are keeping their homes, mortgages are being paid off, banks are making money back, and the debt is less toxic. I would think the only real way of gauging the success or failure would be in estimating approximately how many of those 75% would have been able to pay their mortgages without a reduction and how many wouldn't. If most of them would have been able to catch up and pay, then there really wasn't much point. If they would have all defaulted and gone into foreclosure, then at least this way people are keeping their homes, mortgages are being paid off, banks are making money back, and the debt is less toxic.

]]> By: Lynn http://allfinancialmatters.com/2009/06/30/25-of-borrowers-who-received-mortgage-payment-reductions-fell-behind-again/comment-page-1/#comment-428074 Lynn Wed, 01 Jul 2009 01:21:46 +0000 http://allfinancialmatters.com/?p=3586#comment-428074 My SIL is the perfect example. She had an ARM that reset and she couldn't afford the payments. No let me rephrase that. She chose not to make it a priority and decided not to pay it. So, she was a couple months late and then Countrywide decided that it would change it to a lower interest rate to help her out. Well, guess what. She fell behind again even at the lower rate. She makes 65K and her mortgage payment is less than $1K. Unfortunately she talks about it like its no big deal but we'll see what happens now since she has decided to sell the house. Does she seriously think she is going to get a mortgage? Why would anyone give her money? She needs to learn a lesson and if not being able to get another mortgage will teach her than then so be it. My SIL is the perfect example. She had an ARM that reset and she couldn't afford the payments. No let me rephrase that. She chose not to make it a priority and decided not to pay it. So, she was a couple months late and then Countrywide decided that it would change it to a lower interest rate to help her out. Well, guess what. She fell behind again even at the lower rate. She makes 65K and her mortgage payment is less than $1K. Unfortunately she talks about it like its no big deal but we'll see what happens now since she has decided to sell the house. Does she seriously think she is going to get a mortgage? Why would anyone give her money? She needs to learn a lesson and if not being able to get another mortgage will teach her than then so be it.

]]> By: JLP http://allfinancialmatters.com/2009/06/30/25-of-borrowers-who-received-mortgage-payment-reductions-fell-behind-again/comment-page-1/#comment-428038 JLP Tue, 30 Jun 2009 20:42:10 +0000 http://allfinancialmatters.com/?p=3586#comment-428038 Russ, I'm not excusing the horrendous practices of more than a few mortgage brokers who used the excuse of, "Oh well, if I don't do this they'll only go down the street to some other mortgage broker..." My point of this post is that the bailouts had limited success because they "helped" people who really couldn't afford the house in the first place. They only prolonged the inevitable. Russ,

I'm not excusing the horrendous practices of more than a few mortgage brokers who used the excuse of, "Oh well, if I don't do this they'll only go down the street to some other mortgage broker…"

My point of this post is that the bailouts had limited success because they "helped" people who really couldn't afford the house in the first place. They only prolonged the inevitable.

]]> By: Russ http://allfinancialmatters.com/2009/06/30/25-of-borrowers-who-received-mortgage-payment-reductions-fell-behind-again/comment-page-1/#comment-428034 Russ Tue, 30 Jun 2009 20:33:35 +0000 http://allfinancialmatters.com/?p=3586#comment-428034 That statistic isn't surprising. Most people fall behind on their mortgage or go into foreclosure due to divorce, medical, or layoffs. The media would have you believe it is those evil banks and mortgage brokers and their predatory loans though. Continued problems paying the mortgage even after the mortgage had been modified is directly related to the fact that these borrowers are in trouble due to curtailment of income. No money coming in or savings? Can't pay the mortgage. It really is that simple. That statistic isn't surprising. Most people fall behind on their mortgage or go into foreclosure due to divorce, medical, or layoffs. The media would have you believe it is those evil banks and mortgage brokers and their predatory loans though. Continued problems paying the mortgage even after the mortgage had been modified is directly related to the fact that these borrowers are in trouble due to curtailment of income. No money coming in or savings? Can't pay the mortgage. It really is that simple.

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