NEW HOPE FOR UNDERWATER MORTGAGES
Globe Newswire reported on July 25, 2011, that an innovative approach to "fixing" delinquent mortgages had been announced by Ocwen Financial. Ocwen is a mortgage service provider.
They are going to offer a program designed to help underwater homeowners by forgiving part of their debt and bringing their mortgages current.
- The program allows the resetting of the mortgage to 95% of the current market value. This gives the homeowner an instant equity position.
- The deficit amount is forgiven in stages over a 3 year period as long as the homeowner stays current on the new lower mortgage payment.
- If the homeowner sells the property they agree to participate with Ocwen and share appreciation at the rate of 75/25. 75% to the homeowner and 25% to Ocwen. The investors at Ocwen are banking on our real estate market taking an upswing and restoring some of its lost value.
Homes which might otherwise fall to foreclosure are going to be saved. Investors who would receive pennies on the dollar are now going to receive a larger return on their investment. If equity grows through the revival of the real estate market, and the home is sold at a profit, the investors share in that appreciation. It's a win win for the homeowner, the market and the investors.
- This is the kind of proactive "real" solution we need to turn around our housing markets and our economy.
You can read the full article here: Solution for Underwater Mortgages
The solution to our economic and housing disaster in this country has to come from the private sector. Government has been a dismal failure at managing "Make Your Home Affordable", or any other placebos they have offered.
- Our country was built and thrived for generations on the backbone of small business and innovative solutions to challenging problems.
While this new initiative is not available in every state it is a business model which should be seriously followed.
This innovative model should serve as a beacon to our lawmakers in Washington. A sane and sound approach to getting things back on track. We don't need more regulation. That's all Washington seems to do is debate and regulate. We need private enterprise to pitch in unfettered by cumbersome governmental hoops, to grow and restore our economy.
Opinions expressed here are solely the opinion of the author and not endorsed by any other organization of Brokerage.