While I'm sitting here doing FHA loans in Sylmar, Loan in Van Nuys and Loans in California, I read the news and found myself pondering over whether or not this will work  What would motivate a lender to take a 40 to 60% hit just to clear the books?  Maybe that is the answer, just to clear the books.

The bill states that FHA could insure loan for borrowers that had a loan close between 1/2005 and 6/2007.  It states that bad credit and a demonstration that one can not currently pay their mortgage are acceptable risks. The current lender would have to agree to the write down on the current mortgage so that the delinquent mortgage would be paid of in full.  Their are restrictions on the borrower about reborowing for a few yeas and the prepayment penalty is loss of equity for the first year and a joint equity split with FHA for four additional years.  I think the FHA is going to have to hire a lot of landlords to keep up.

What do you think?