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DeMarco: Principal Reductions May Save FHFA $1.7 Billion

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  • Karen Mountain | | 12 Apr 2012, 10:34 PM Agree 0
    That's a good start - but we need to address the millions of underwater mortgages NOT owned by Fannie and Freddie. Or the ones that are no longer conforming because of the reduction in mortgage amount.

    Until the housing mess is cleared up, the economy will not progress. There is no movement - people can't buy and sell homes, they can't even move to other jobs, if they can't sell their homes. And banks insisting they be 3 months delinquent is crazy! We all need to work on this together!
  • Alicia | | 14 Apr 2012, 09:25 AM Agree 0
    Unfortunately, the banks are only creating more underwater mortgages because it is taking them so long to complete the mortgage modification process. It is taking Chase and Bank of America an average of 2.5 to 3 years to complete a modification. The banks will not take any type of payment during that time because they have started an active foreclosure. By the time the banks get the mods done and add all the back interest, fees, taxes and insurance paid out, most of the mortgages are underwater. I have helped homeowners do modifications and there has not been one that the mortgage is less than 40,0000 over the appraised value. The banks should not be allowed to add all the back interest into the modifications. These people will never be able to sell their homes if they choose to. All of the mods I have seen have increasing interest rates over time.
    The banks are just creating another wave of foreclosures for the future. All mortgage mods should be processed within 3 months. This should be part of the federal mandate for HAMP.
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