Knock, Knock
Can you hear anyone knocking at your door? If you do, it might be Freddie Mac asking about your mortgage. If you don’t, well, you must be in pretty good shape. Apparently, Freddie Mac has launched a proactive campaign to convince borrowers to modify the terms of their loans. Yep, they’re actually physically going door to door. They’re seeing who will participate in the government’s mortgage relief program.
Comment: Have you been contacted? Comment and share your experiences.
They’re hoping that meeting in people’s homes will help peopl
e overcome any difficulties they have regarding the process. And though they’re overwhelmed with the backlog of delinquent applications, they’re desperately trying to keep up.
STRATEGIC DEFAULTS
That’s the latest term being thrown around. Two reports came out yesterday explaining the logic behind intentionally defaulting on your mortgage. Last year 600,000 borrowers defaulted. But who are these people?
What researchers discovered is that borrowers with the highest credit ratings are twice as likely to default as are lower rated borrowers. Does that make any sense? The better your credit, the more likely to default??
Apparently these people decided that the damage to their credit score was better than sticking it out. Once their negative equity equals 50% of their home’s value, a large portion will walk out. However, the numbers are lower than they would be otherwise, due to feelings that a strategic default is immoral.
Comment: Tell me what you think. G ive me a piece of your mind. What would you do in this situation? Take the hit, or walk out? I want to know.
