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Should You Just Walk On Your Mortgage, Ctd: HAMP or Hamper?

Posted on November 30th, 2009 8:53pm by Candy Evans
Filed under Changing market trends in Real Estate, Real Estate, credit crunch, loan remodification, mortgage/refinancing

The Wall Street Journal’s Peter Eavis noted the very same problem I did with the Obama administration’s new found pressure on banks and lenders to speed up remodifications for hurting borrowers by year’s end. That’s 58% of those in the HAMP trial, or 375,000 borrowers. Great for coffee sales: those processors are going to be pulling some all-nighters. Let’s say in the crunch they scoot by some unqualified borrowers. The result will be even more foreclosures and a higher re-default rate, dumping more inventory on the market just about the time spring sales hit.

Hmm. Maybe the best buyer’s season is yet to come.

2 Comments to “Should You Just Walk On Your Mortgage, Ctd: HAMP or Hamper?”

Mrs. Mon E Penny @ December 1st, 2009 at 10:02 am

The Treasury Dept fails to understand that Lenders are cherry picking loan modifications. The number of borrowers who qualify for loan modification is in the millions. It is a race against the clock for foreclosure vs. loan modification.

http://www.associatedcontent.com/article/2402244/are_lenders_cherry_picking_loan_modifications.html?cat=3
ClassicUrbanHomes @ December 1st, 2009 at 10:30 am

The more big picture problem is that this will raise the cost of mortgages for all of us in the future. If the lenders think they are going to get forced to modify a previously existing loan, they will recognize that all future loans will likely have a similar risk. They will price that risk in by requiring some combination of higher rates, higher down payments, less willingness to lend non-conforming loans, etc.