Fannie & Freddie Won’t Pay Down Your Mortgage
They are saying that they prefer to do interest rate reductions and term extensions. My opinion is that you only help those who lost their job or had a real hardship which wouldn’t include a mortgage broker who’s income decreased. All of us who do not receive guaranteed pay need to make sure we spend less and save for a rainy day. I was told when I first got in the business that if you make $200,000 you should spend like you make $50,000. That might be an extreme but I sure which I listened a little better myself. I and many others hopefully will learn from our mistakes.
In order to make the modifications work I feel you need to do a principle reduction. I am not saying that is fair or what should be done but I think it would lower the re-default rate on the modifications dramatically. It’s all psychological.
What’s holding them back is the companies’ mandate to conserve their assets and limit their need for taxpayer-funded cash infusions, experts said. If Fannie and Freddie lower homeowners’ loan balances, they are locking in losses because they have to write down the value of those mortgages. Essentially, that means using tax dollars to pay people’s mortgages.