Citigroup To Lower Some Mortgage Payments
By Kurt O'Keefe, Detroit Consumer Attorney on Mar 3, 2009 in Foreclosure News
Struggling Citigroup, having just got its third bite of taxpayer funds, announced it will lower mortgage payments on SOME mortgages.
This is another industry response to the foreclosure crisis, we will see what actually happens.
The mortgages have to be first mortgages, on your residence, you have to be at least 60 days behind, and unemployed.
So far, so good, but, “conforms to government sponsored enterprise limits.” is another condition.
Government sponsored enterprise, or GSE, refers to Fannie Mae and Freddie Mac, which have been taken over as part of the bailout strategy of our leaders.
Those guidelines currently are mortgages up to 80% of the home’s value, which leaves out most of my clients. The Obama housing program has a change to up this to mortgages of up to 105% of the home’s value, which still leaves out most of my clients.
I am skeptical of the other provisions of the Obama plan, in that it pays the same servicers who are part of the mess to do modifications. I fear the modifications will be as bad as the mortgages.
It requires more bureaucracy and taxpayer money, while judicial mortgage modification costs taxpayers nothing, requires no new bureaucracy, as the court system already exists to handle it.
Most of the big mortgage companies announced modification programs last year, to great fanfare, which turned out to be full of sound and fury, signifying nothing, as Shakespeare would say.
Last study I saw said 58% of the ones actually modified were in default again before a year was up.
Real modifications will happen when the bankruptcy code is changed to give the homeowner some leverage.
The bill is up in the House this week, contact your Congresspeople now!
The toll free number will automatically route the caller to the correct congressional representative. The number is: 877-354-4958.
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