DISQUS

Blown Mortgage: BofA to modify 265,000 Countrywide loans

  • Paul Hiller · 1 year ago
    "We will continue to work with distressed borrowers to match the customer's repayment ability with the appropriate loss mitigation option, including loan modifications, forbearances, repayment plans, lower rates and principal reductions," McGee said. "

    Talk about burying the lead. The money shot here is the words at the end of McGees' sentence. Lower rates and "principal reductions".
    This is the first time I have seen a lender quoted using those words. If he is serious this is huge. The problem for nearly all the borrowers in trouble is the size of the debt, not the rate. If B of A gives people a short refi it will be a game changer.
  • morganb · 1 year ago
    Great find and great point Paul! I wonder if B of A will be elaborating on
    any of these options publicly. The first wind of a short refi would indeed
    put the finance world on it's head. Thanks for sharing!
  • ann · 1 year ago
    The question I have is what types of loans are going to be modified? Teaser ARMS? MTA's? Also how do you modify? Based on True income when it was a liar loan? Principal Reductions in a declining market..does that mean that a year from now when the price goes down another 10% are those borrowers going to expect more? What about the average Joe next door, who isn't a "troubled" borrower and now has a principal balance of $300K..while his neighbor had 50K forgiven and now has principal balance of $250K?

    Seems to me there is no end in sight...
  • Paul Hiller · 1 year ago
    Ann is right. When we go down that road there is no end in sight. That is why I was so shocked by what McGee said. The banks just went to all the trouble of killing the cramdowns that congress was proposing. Now B of A opens the door to doing them voluntarily. I am sorry that no one in the press has picked this up and pressed him on it. I expect he will backpedal.
  • morganb · 1 year ago
    I think a follow up article and some outreach to regular blownmortgage
    readers who are members of the press is in order tonight!
    morgan