At least one mortgage financing expert thinks that the government ought to consider rewarding people who are in financially sound shape and who want to continue to pay their underwater mortgages on time.
Keith Gumbinger, a vice president at the HSH Associates mortgage-consulting firm, told Fortune magazine that he wants the federal government to issue what he calls, "value gap coverage."
It would work this way: You bought a home for $350,000 in July 2006 with 100 percent financing at 6.8 percent. Now the property is worth $280,000, but your mortgage balance is $334,000. You can't refinance because you are underwater, but willing and able to pay. In Gumbinger's scenario, you'd get a new $280,000 mortgage at 4.7 percent. The government would guarantee the remaining $54,000, on which you'd pay 4.7 percent interest to the current mortgage holder. This reduces your payments by $6,700 a year - about 25 percent. No mortgage lender has to take a write down.
Interesting idea huh?
What are your thoughts...I'd like to know.
If you are interested in owning property on Maui - more specifically, Kihei or Wailea (areas I focus on) please contact me for a list of Maui's Best Buys!
Aloha,
Jeff
Jeff Graves I Realtor®(S) I Coldwell Banker Island Properties
(808.633.1292 (Cell)
JeffGraves@ClearWire.net
Coldwell Banker Island Properties
34 Wailea Gateway Place, A-207
Wailea, Maui, Hawaii 96753
Source: Fortune, Allan Sloan (09/07/2010)
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