My in-laws currently have an interest rate of 7%. They would like to take advantage of today's lower interest rates, and yet, they refinanced in '05, taking money out for a remodel when their property value was nearly a million dollars. They owe approximately $800K, but current value is estimated at $700K. They are struggling to make the higher payment and they are asking themselves "WHY?"
Doesn't it make sense for banks to have a desk-top modification program for folks who want to stay in their homes, but don't have the LTV's to refinance?
If the market dictates the value of homes, why can't the banks make rate adjustments to help keep home ownership a viable option for the many who are otherwise choosing to walk away? This should make far more dollars and sense for the bank's investors than a short sale or foreclosure, shouldn't it? If not, why?
Thanks for weighing in.
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