Mr. Van Ack writes a newsletter on Housing and has been right on the mark for 20 years… he is saying what i have been saying for months, this is a Government induced foreclosure crisis today - bad public policy = home defaults: “a Federal program began earlier this year which is designed to keep homeowners on the verge of foreclosure in their homes and help them gain lower monthly payments in the process. Since a homeowner needs to be at least two monthly payments behind or already in foreclosure to qualify for the Federal mortgage relief program, we have wondered if perhaps a growing number of people have intentionally missed payments in order to qualify. Now we are beginning to hear hints that some banks are telling homeowners that are having trouble making their monthly payments to intentionally skip a few so they can qualify for lower payments via the Federal program. We may find out during the coming twelve months that some of the scare talk regarding foreclosures that so filled the media during late 2009 was partly a reflection of these intentional late payments. That would be good news.”
Yes. I have seen this first hand. Borrowers who have never missed a payment, and would have never missed a payment are taking a couple months off paying to get a loan modification, based on STUPID government rules that require a loan be moved to the ‘work out department’ within a bank to get a lower rate.
Yes. The Government’s poor public policy is adding to this crisis.
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