Underwater misunderstanding

**canuck** · March-08-10, 01:50 PM

Remember when fish used to be wrapped in newspaper, think how the news smelled. This, fresh from the Atlantic today:

http://www.theatlantic.com/business/...t-sales/37168/

**Baselinepunk** · March-08-10, 03:12 PM

The difference in price regarding a short sale is counted as income for the buyer and they have to pay taxes on the amount. Not a good plan for the Feds, or buyers.

**iheartthed** · March-08-10, 03:50 PM

Short of forcing banks to rewrite mortgages, they should have been planning to do this a year ago. Economics trumps all, including shame, and it does not make mathematical sense for a good amount of people who are underwater to keep paying on their mortgages, whether they can afford to or not. For many, it would take more than 7 years [[the amount of time that a default would stay on your record) to pay down the amount that they are underwater, and that's assuming that 1) housing prices don't take any more sharp declines, and 2) no catastrophic events pop up where you would need to take out a loan for some type of repair/maintenance [[not that you would even be able to get a loan for such things considering you couldn't use the home as collateral since it is underwater). This is probably the best way to stabilize the housing market.

**Baselinepunk** · March-08-10, 03:57 PM

The Feds do have a mortgage plan helping with mortgages:

http://makinghomeaffordable.gov/index.html

**Thames** · March-08-10, 04:28 PM

Originally Posted by Baselinepunk

The Feds do have a mortgage plan helping with mortgages:

http://makinghomeaffordable.gov/index.html

That program is a joke.

My mortgage was sold to citi mortgage after Lasalle was sold and now I'm stuck with them.

I tried to get refinancing through HARP. No banks were interested in refinancing my mortgage. They were only willing to refinance for existing customers.

Once I finally got citi to talk to me, they wouldn't lower my interest rate by even 1%. 3/4, that was it, and they wanted to charge me over $4000 for that.

My interest rate isn't horrible but there are rates in the 4's right now and I was hoping to get to even just 5 with HARP.

**iheartthed** · March-08-10, 05:43 PM

Originally Posted by Baselinepunk

The Feds do have a mortgage plan helping with mortgages:

http://makinghomeaffordable.gov/index.html

Well, first that program is only for people with demonstrable financial hardship. And even people who can demonstrate that much will often get turned down for mortgage modification. Second, it does nothing for people for which they don't have an economic hardship other than that continuing to pay on their underwater mortgage does not make mathematical sense. And those are the people who might cause another housing crisis if enough of them walk away from their homes. So if the government can organize this short sale program as a stop-gap to prevent a large scale mortgage default trend then that would be in mostly everyones best interest.

**Thames** · March-08-10, 06:44 PM

The modification program is designed for people who are having financial hardship.

The refinancing program is designed for people who are current on their mortgage, but can't take advantage of lower interest rates due to the decreased value of their home. Financial hardship is not a requirement for refinancing. In fact, if you've been late on your payment in the last 12 months, you do not qualify for refinancing.