As their mortgage loan interest rates reset and/or the economy cools, a certain number of owners are going to go into foreclosure, we have to accept that fact.
How to deal with that, is the question.
The fear is, new government regulation will put a freeze on the subprime lending market.
That would be worse than the problem, itself.
Here’s one person’s idea:
My proposal focuses on the major black cloud on the horizon: the large number of subprime ARMs with interest rates that will reset to much higher levels over the next two years. Many of the borrowers will be unable to make the higher payments and won’t have enough equity in their homes to refinance.
I would mandate a three-year extension of the initial rate period of all ARMs that met the following conditions:
1. The first rate reset is scheduled to occur (or did occur) during the period Jan. 1, 2007, through Jan. 1, 2009.
2. The loan is secured by the borrower’s primary residence — no vacation homes or investment properties.
3. The loan had an original balance no more than twice as large as the current FHA maximum in the county in which the property is located. The maximums would thus vary by county from $400,320 to $725,580.
4. The loan had a margin of 4 percent or higher, and a prepayment penalty that extends past the initial rate reset date.
Now, this proposal seems to grant favors to certain people, which I would be against. However, if we think of the larger picture, our economy, and if we think of the smaller picture, people’s homes and their financial futures, it may make sense.
More so than some of the other plans being floated by elected officials, local and otherwise.
Complete story: Unique plan to save ARM borrowers from foreclosure – By Jack Guttentag, Inman News, by way of The Boston Globe
Back to Boston condos for sale homepage
Contact me to find out more about Boston condos for sale or to set up an appointment call/text 617-595-3712.
SEARCH FOR CONDOS FOR SALE AND RENTALS
- Back Bay condos under $550k – $1M
- Beacon Hill condos $550k – $1M
- Charlestown condos $550k – $1M
- Charlestown Navy Yard condos $550k – $1M
- Dorchester condos for sale
- Dorchester Heights condos
- Fenway condos $550k – $1M
- Jamaica Plain condos $550k – $1M
- Leather District condos $550k – $1M
- Midtown downtown condos $1M – $5M
- Seaport District condos 450k – $1M
- South Boston condos $550k – $1M
- South End condos $550k – $1M
- Waterfront condos $550k – $1M
For more information please contact one of our on-call agents at 617-595-3712.