Bail Out Bill ? Loan modifications - Part two

Sec 109 – Reasonable Loan Modifications

Upon any request arising under existing investment contracts, the Secretary shall consent, where appropriate, and considering net present value to the taxpayer, to reasonable requests for loss mitigation measures, including term extensions, rate reductions, principal write downs, increases in the proportion of loans within a trust or other structure allowed to be modified, or removal of other limitation on modifications.

The key word here is “reasonable”.  That does not mean what it would take to get a new loan but a payment  that you can really afford to make.  This would include eating Cup of Noodles and bean burrito's for every meal if needed.  Lenders in the Boise area marketplace will typically drop an adjustable rate mortgage and fix the term to about 5% for 5 years. This is what Countrywide Loan Workout department told me.  Other lenders may differ.  

Posted by DarrinJ at 11/26/2008 2:22:00 AM
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