Mortgage modification - 2% interest rate 30 year fixed
One of my acquaintances just got his mortgage modified. Through some non profit organisation, somewhere in Chicago south side church, he managed to squeeze a 30 year fixed home loan, 2% interest rate for life. Some mortgage modification, considering that he had 5.5% 3-year adjustable loan before. His payment now is under $1,200 a month. That is on $320,000 home loan.
The dude has been unemployed for almost 6 months and this mortgage modification plan only allows no more than 30% or so for principal and interest mortgage payment. So they took his wife monthly income and may be his unemployment, and come up with the dollar amount they should not exceed. Hence the 2% interest rate.
So what is the big deal? This fella used to sell hard core subprime home loans for at least 4 years pulling close to $200,000 a year in commissions. He would have 3 or 4 closings a month, with $5,000 to $6,000 per deal on average. Now he is broke, with his wife supporting him literally. He could not even get a personal banker job in a local bank, because it required Series 6 Financial Examination which he failed. So call this mortgage modification a Poetic Justice Reversed, but he, who used to push 9% or 10% interest rates to unqualified borrowers, is sitting nicely on 2% interest rate which will last for the life of the loan.
Mon Jul 26, 2010 09:07AM | Copyright: www.bad-credit-advisor.com | More in Mortgage | Comments (0)
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