Posts Tagged ‘bank’
Aline van Duyn of FT.com wrote a great article that explains a few things about mortgage modifications. I quote part of van Duyn’s article below. But that is not the real shocker. While approximately 35 percent of people are struggling with mortgages, what really drives me wild is what happens when the neighbor gets $100,00 knocked off of the mortage balance while others in the neighborhood keep paying on time like they should.
Today, about 80 percent of the $1.8 trillion in troubled mortgage loans belong to investors, according to Deutsche Bank. The rest are considered “whole loans,” held by banks or government-run mortgage giants Fannie Mae and Freddie Mac. Some people might not feel sorry for the investors, but others think investors were mislead about the safety of such loans. Either way, why are mortgage companies reluctant to help troubled homeowners? The fault lies with investors. It is a simple matter of contract law.
One out of every five Americans no owes more on their home than it is worth, according to research involving JPMorgan Chase’s decision to temporarily halt foreclosures. While that certainly is good news for many, it is not good news for investors and banks. “Prime mortgages, especially where there are pay-option ARMs involved, (are) becoming a broader issue,” said Charles Scharf, head of retail financial services at JPMorgan.
This was submitted by a reader: LONDON (AP) – The British government injected an unprecedented 37 billion pounds ($63 billion) into some of the country’s leading banks Monday to avoid a full-scale collapse of the sector.