Second Mortgage Holders... WAKE UP! Is 50-70% greater than 0-10%??
I am not sure if I want to laugh or cry at these second lien holders? Hmmm lets see wasnt it not too long ago that the attitude was "I will give you access to EVERY dime of equity, on an inflated value at times, sometimes give more than the property is worth" (thanks Irwin Mtg and others) and then complain and act as if in shock when I dont see the money I lent come back in full, especially after a market has made a MAJOR correction???
Give me a break! These lenders are so out of touch they should all thankful and pay bonuses to get back 1/2 of what the balances from their lending at top of market were and be thankful they get that! If a foreclosure or short sale ensues they get little to nothing but when you call them to try to get a small reduction in principle and pay the rest off in full its like you are insulting them??? I guess they like 0-10% back rather than 70-80%.
So to set the record... A borrower has a property worth (in todays market) 250k they have a first mortgage for 220k and a second they owe 60K+. The lender could allow the client to refinance save them money recoup over 1/2 of their amount owed as immediate principle but instead would rather see the borrower lose the home and at time of sale (foreclosure or short) they are happy to get 10% of the amount owed back? REALLY!?!?
Why is it the bank that wasnt interested in getting 50% or more is HAPPY to see 10% at time of loss?
Until we can get a bank to act with integrity this is the sad state of affairs we are going to continue to see. I would love to see this post get some actual attention and see if any call to action... or dare I say "common sense" creep into the execs who make these consistent poor decisions.
Maybe these out of touch second mortgage lenders need to hire the counseling from debt collectors who understand 50% of real money from worthless charged off paper debt is MUCH better than 100% of the uncollected debt!
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