The banks prefer empty homes

[Donnachaidh]

http://socialistworker.org/2011/08/03/banks-prefer-empty-homes

LUZ SMEDBRON--a disabled mother of three and an American citizen originally from Ecuador--along with about a dozen housing rights advocates, stood together on Smedbons' porch in Addison, Ill., on July 29. With protest signs in hand, they chanted, "The people united, will never be defeated!"

As DuPage County sheriffs moved in, protesters stood their ground. As news cameras arrived on the scene, the officers slunk back to their patrol cars, looking confused and embarrassed. They radioed for reinforcements.

"The banks did not work with me, they would not give me a reasonable modification. They prefer to have houses empty and people homeless," said Luz Smedbron.

Wells Fargo, the bank Luz had been paying $3,000 a month to for the last five years, has demanded proof of $6,000 in monthly income to even consider modifying Luz's loan. Her disability checks fell well short of the modification requirements.

More at the link --

[RB TexLa]

1. With 6000 of monthly income the 31% housing cost would be $1,860

that's a cut of 38%. If she can't afford 62% of what she agreed to pay, perhaps she should look at other housing. I'd love to have a house that costs $25,000 a month for $15,500 but if I can't show that I can afford to pay the $15k, why would someone give that to me?

[Walk away]

2. the way modifications work is that they increase the interest on the back end

Usually it's low for 5 years and then goes goes up for the remainder of the mortgage. Several years of mortgage payments are added to the end. A thirty yr mortgage can end up a fourty yr one. The last ten years pays off the front end reductions.