If we just reset all default home mortgages to 100yrs/ 5% could we avoid the bailout?
Some restrictions would have to apply to pass the mortgage along like take off 20 yrs for every pass on to prevent flipping or a buy down of 5yrs cash up front each time it is moved to a buyer.
8. The government agency would buy the bundles and then
deal with the homeowners directly. I think the current proposal permits a solution of that sort in some cases and to some extent. Individual homeowners get notices when they are being foreclosed. Another possibility is that they be invited to contact an agency of the federal government or a subcontractor of the government to discuss refinancing.
At 5% interest the difference in payments between a 30 year and a 100 year is only about a $1.17 per month total difference per $1k borrowed. It doesn't really help since you're not paying much on the principal anyway the first few years of a 30 year loan. All it does is guarantee people will basically be renting from the government. I know the Repukes would love that, so why are you suggesting that?
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