Was just reading the following in my Realtor email news update:
From: Daily Real Estate News – December 9, 2008
Just because their mortgage was modified doesn’t mean that a troubled home owner is out of the woods yet.
More than half of loans modified during the first three months of 2008 were again 30 days delinquent just six months after the terms of the loans were changed, reports John C. Dugan, comptroller of the currency. After eight months, 58 percent of the home owners were delinquent again.
Is anyone surprised? This would be like me showing up at eviction court and telling my tenant “You know what” I’m going to give you a break. Let’s forget the amount you are behind and lower your rent $100/mo. Will that help?” I can promise you I’d be back at eviction court within 6 months, if not sooner.
These mortgage bailouts will be no different. This is not to say I don’t have sympathy for the home owners caught up in this, or the communities that are being racked by foreclosures, but the government’s ham handed bailout efforts seems only to be postponing the default, not preventing it. The buyers who got in over their heads should be the primary recipients of the consequences of their poor decisionmaking, not tax payers at large.
My solution? Let the foreclosures happen and let’s clear the deck of these bad loans and unqualified home owners.
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