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People quit paying on mrtgage- waiting for Gov't help


cap1kid
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I've talked to alot of people who took out home loans in the past two years - a good portion of them are thinking about, or have quit making monthly payments- they truly believe that after the presidential election the house will be paid for- or the interest drastically reduced. I talked to one guy who is upside down to the tune of 50,000- basically he owes 250,000 on a home NOW valued at 200,000 at 6.5% interest- He believes that he can get debt relieve (reduce principle) and refinance the loan at 200,000 at 3% interest based on some govt program. Have you heard of people quit paying waiting for the Govt to intervene?

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No and I don't recommend it.

First, your credit will be shot. Second, there may be some modifications to some loans but not necessarily everyone. Third, my prediction is that for those who truly cannot pay the gateway to relief will be through Chapter 13 bankruptcy. It is likely (again, my opinion only) that section 1322(B)(2) will be modified to allow for mortgage modification and lien stripping on unsecured portions of primary residence loans. Allowing this modification gives relief to people who truly cannot pay the mortgage on the entire loan balance but can afford the lower secured balance for whatever reason while weeding out the opportunistic people who just don't particulary like paying a mortgage on a home that has diminished in value below the loan balance.

The Chapter 13 resolution requires 3-5 year plans for most people where all disposable income goes into the plan. And it means that the credit will be basically shot with no way to build up cash down payments for car purchases etc. That is no fun either, but there has to be some cost paid for the ability to lop off a substantial portion of a home loan and dump credit card debt at a huge discount.

I just don't see any other way out.

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I've talked to alot of people who took out home loans in the past two years - a good portion of them are thinking about, or have quit making monthly payments- they truly believe that after the presidential election the house will be paid for- or the interest drastically reduced. I talked to one guy who is upside down to the tune of 50,000- basically he owes 250,000 on a home NOW valued at 200,000 at 6.5% interest- He believes that he can get debt relieve (reduce principle) and refinance the loan at 200,000 at 3% interest based on some govt program. Have you heard of people quit paying waiting for the Govt to intervene?

This guy that thinks he can get debt relief at 3% and reduce principal after non-payment is in DREAMLAND! Not going to happen in our lifetimes.

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There are many folks out there with unrealistic expectations. There is that woman in a YouTube video who supported our now pres-elect because she believed that he was going to pay her gas bill and her mortgage.

There are going to be many disappointed folks out there.....

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