patrick.net

what happens if the "owners" decide to sell the house down the road? do they get to keep the profit if the price go back up?

The government is paying the banks to do these deals.

This is completely unfair to anybody that rents.

I guess the objective here was not to make homes affordable. The objective was to keep the property taxes high to benefit the states. Bravo. They will have stabilized home prices by doing this.

HousingWatcher says

This is not a bail out. No govt. money is being used.

It might not be a bail-out but rather a result of the bank being bailed out. Now they can afford to lower principles and take a lesser loss. the bank wouldnt be in that position if the bank had not been bailed out. So in a sense, it is government money being used er uh I mean our money.

fil says

I think your right pkennedy so far it seems like most of these programs aren’t really a good deal. I hear that some of the refis just extend the loans. I suppose the bank is always going to try and get their money in one way or another.

Some do reduce monthly payments, but not by much apparently. HAMP seems to have reduced them by only $500 a month on average.

That isn't much wiggle room this day and age before you end up having to default, particularly if you take into account all the extra debt people these days carry.

HousingWatcher says

This is not a bail out. No govt. money is being used.

And so it is official. More bailouts with government money.

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/03/25/financial/f063429D63.DTL

I'm betting many of these loans are multi pronged. I haven't read too much into them, because I'm really not worried about home owners who take this path getting a great deal. I know the banks have been around (hundreds of years in some cases) and will still be around long after everyone here is dead. They're good at what they do.

I'm betting they're reducing the loans just enough to free up a bit of cash so the home owner fees "rich" again. They're dropping just everything just enough to prevent strategic defaulters, and probably a few non strategic defaulters from walking away. They're probably extending these mortgages WAY out there to do this. The home owner will be poorer in the long run from this.

Of course if they were stupid enough to get involved in this, after 30 more years, they'll own a property and hopefully be less likely to drain on society later on in life, when they realize saving $100/year for retirement doesn't work, and that their $3000 in savings isn't going to carry them through retirement :)