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Are Loan Modifications The New Refinance?

Reblogger
Real Estate Agent with McCall Montgomery Real Estate

THIS IS A REALLY GREAT POST AND I AM GLAD I AM ABLE TO REBLOG IT FOR ALL OF THE OTHER RAIN MAKERS OUT THERE.  KEEP THEM COMING BECAUSE THEY DO HELP GIVE GOOD INSIGHT.

Original content by Karen Fiddler, Broker/Owner BRE# 01494165

 

I'm expecting controversy on this post....you can't see me, but I'm writing this fully "braced."

I am not passing judgment on this....but I've been hearing about some great loan modifications at unbelievable interest rates. The interesting thing is that the people getting them probably don't really NEED help to stay in their homes.

This week I was at a Christmas party with friends and ended up talking with a group of people who were all getting loan modifications. They were openly talking about "beating the system" and the great rates they had achieved....or hoped to. Apparently this is a trend in some of our neighborhoods.

The people I talked to were employed and solvent, but had higher debt ratios than lenders like and bad home values....were either upside down or close to even. They could not get a traditional refinance at an A+ interest rate. These "savvy" people were using the loan modification process to get 4%-ish interest rates on jumbo loans that they could not get on the regular market. Sure....they are sacrificing their credit scores, and they knew it. But one said "everyone's FICOs are taking a hit, so we are probably still better risks." Maybe that's true.

The best I heard was a 2% fixed rate for 5 years, then gradually getting to a 4.75% for the life of the loan....for a $950,000 loan amount and a property value of $750,000. That's a great refi!!!

I wonder how many of the success stories we hear claimed by banks are these refi-loan mods? And as one of my friends said "hey, a couple years ago the game was no-doc loans, now the game is loan mods....so we play the game in front of us." Wow....

 

Karen Fiddler
Broker/Associate
The Fiddler Realty Team/eVantage Real Estate
Lic # 01494165

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Posted by

Carri "Mac" Brown- REALTOR

www.mccallmontgomery.com

www.carribrown.com

www.ouragentswin.com

 

Comments (1)

Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

Hi Carri....just popped by to thank you for the reblog. I appreciate it.

Dec 28, 2010 03:21 AM