Homeowners struggling to make ends meet are quickly finding it nearly impossible to get a new low rate mortgage. For those that are facing foreclosure, a refinance to a low rate mortgage may be all that is keeping them from foreclosure. Until availability of low rate mortgages returns, it is quite possible that the housing market will continue to see more foreclosures on a regular basis. Experts are hoping that change is in the air, but it could take months to arrive for the average consumer.
“These are loans that are very hard to restructure because you look at the original loan documents and there is nothing there,” said Chris Mayer, real estate professor at Columbia Business School.
“The perception in the market is, ‘Good luck, Sheila. Let’s see what you can do with the loans’,” said Guy Cecala, publisher of Inside Mortgage Finance. “IndyMac has probably already done as much as they could with those loans.”
“We are committed to working with those borrowers to seek long-term and sustainable modifications,” said Andrew Gray, an FDIC spokesman. “It’s a benefit to both the borrower and lender to have these borrowers stay in their homes.”
Related reading: Low Rate Mortgages
Comment on this article