For those who don’t read Dr. Housing Bubble regularly, click here for his most recent examples of how neg-am mortgages are being modified.
One borrower was given interest-only payments for 10 years – with a rate of 3.75% for the first five years! Another borrower got modified onto a 40-year program, which saves about $260 per month on a $500,000 mortgage at 5.5%.
His point was that these loan modders are getting long-term fixed payments that are as much as 20% to 30% below market rents. But it will also frustrate those of us that are hoping for more well-priced inventory coming to market, because these mods have a better chance of sticking.