Re negotiating mortgages 101

[SoCalDem]

what happens in this scenario: (my friend's sorry debacle)

she bought a 99K house in 1988 with $27K down...

then she met "him"

she admits her complictity, so her poor judgement is not the issue here..

they re-fied for 150K a few years down the line

then took equity loans out as often as he thought they should, and now the house is "financed for 275K" and is probably only really worth about 150K..

they "profited" every time they took cash out, so making them a new "affordable" mortgage does not really seem all that fair to people who got a mortages, left the equity in it, and have been paying their mortgage for decades..

To me, it's a case of taking the equity now or taking it later..either way, you end up moving..

there are millions of people just like them.. "bailing them all out" does not seem to me, to solve the "problem"

[Raven]

1. It will not solve the problem. Usually, in these situations you do

what is called a "workout". The bank and the borrower sit down and figure out how everyone can come out reasonably whole. This may mean a longer payout of the mortgage. If John McCain buys upsidedown mortgages, he's going to leave the taxpayers holding the bag.