Fannie & Freddie have started to offer mortgage loan modifications. As of the moment, the loan mod is voluntary. Accepting this ’solution’ means you:
* Acknowledge the full debt regardless of the value of the home
* Waive all rights to fraudulent or predatory lending claims in the future
* Turn your loan into a full recourse loan that could follow you for life even if you choose foreclosure down the road
[[MORE]]* Remain underwater, full-leveraged, renter for the rest of your life (in most cases)
* Will save no money at 38% housing debt-to-income ratio plus all other debts
* May not discharge any of this mortgage debt through any bankruptcy even after foreclosure
If widely accepted by home owners, this will ruin the American consumer and make housing a dead asset class for decades. If you are in a serious negative equity position when signing these forms, as most are, remember that you will:
* Never be able to sell your home
* Never be able to buy a new home
* Never be able to rent your home due to owner occupant provisions
* Be responsible for the full loan amount even if the value of your home keeps dropping for the next 10-years.
The 38% debt-to-income ratio on top of all of your other debt means you will save no money and live hand to mouth to keep this underwater roof over your head.
From: http://mrmortgage.ml-implode.com/2008/12/17/fanniefreddie-come-get-your-loan-mod-pay-for-life/
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