Sociable

Wednesday, July 6, 2011

Obama administration pressures banks to reduce mortgage principal

As it notes in the article the principal reductions usually results in strategic default.  I don't think lenders will want to do this.
The Obama administration is putting more pressure on banks to help underwater borrowers by reducing the principal on current home loans.
"We are continuing work with the issuers of the mortgage, the bank or service company to convince them to work with homeowners who are paying to see if they can modify the loan and possibly lower principal so that they are not burdened by these huge debts," President Obama said during the Twitter town hall meeting Wednesday.
With national home prices falling 33% from the peak before the housing crisis, many borrowers are now left with properties worth less than the amount owed on the mortgage.
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