ERASED: $150,000 on a $300,000 Loan by CHASE! And she WASN'T Behind on her Payments!
Unbelievable! Did you read this article http://www.nytimes.com/2011/07/03/business/03loans.html?_r=3 from the New York Times? A woman in Miami was offered from Chase, unsolicited, to erase $150,000 off her $300,000 mortgage . . . and she wasn't even in default!
A friend of mine has been trying for two years to modify his Chase mortgage and was turned down twice. He is finally in the 'Trial Period of 3 months' which has lasted now for over 6 months. He has no indication of when his loan may be formally modified so that he may move on with his life. However, there is no 'forgiveness' of any of the principle balance, like in the story from the New York Times.
Why would Chase and other big banks offer deals like this 'unsolicited' to people who are not in default on their mortgage when others have been turned down once, twice or even three times? Here are some ideas. I'd like to hear yours.
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The lower loan values create more attractive LTV's for these loans thus making them more attractive as a 'saleable product' in the secondary market.
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The loans seem to specifically be the 'Option ARM's' that are the object of many lawsuits from homeowners to the Banks. Maybe this will thwart additional lawsuits from mortgage holders who are not currently behind yet hold onto these risky loans?
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The values are so upside down to what is owed on the home that this may be a REVERSE Stragegic Default. The Bank is stepping up and strategically reducing mortgage holders liens so that when times get tougher it's harder for them to walk away from their home.
What do you think? Has this happened to anyone you know? It sure would be nice to have a quarter of all homeowners across the Country back in a situation where they are no longer faced with Negative Equity. What a gift!
Thanks for your feedback.
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