Click Here

REALTORŪ Magazine Online: The real estate professional's business support tool.

OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®

Daily Real Estate News  |  September 10, 2010  |   Expert Proposes Rewarding Good Borrowers
At least one mortgage financing expert thinks that the government ought to consider rewarding people who are in financially sound shape and who want to continue to pay their underwater mortgages on time.

Keith Gumbinger, a vice president at the HSH Associates mortgage-consulting firm, told Fortune magazine that he wants the federal government to issue what he calls, “value gap coverage.”

It would work this way: You bought a home for $350,000 in July 2006 with 100 percent financing at 6.8 percent. Now the property is worth $280,000, but your mortgage balance is $334,000. You can’t refinance because you are underwater, but willing and able to pay. In Gumbinger’s scenario, you’d get a new $280,000 mortgage at 4.7 percent. The government would guarantee the remaining $54,000, on which you’d pay 4.7 percent interest to the current mortgage holder. This reduces your payments by $6,700 a year – about 25 percent. No mortgage lender has to take a write down.

You can read the specifics of his Gumbinger’s plan here.

Source: Fortune, Allan Sloan (09/07/2010)

Browse all of today's news
E-mail this page to a friend
Give us feedback

Search news
Launch my search
 
Subscribe to news
Subscribe to News
Daily and weekly real estate news, trends, NAR press releases, convention coverage, plus exclusive features and columns.

RSS Feed
Get the Daily Real Estate News delivered straight to your desktop or news aggregator. (New to RSS? Learn the basics here.)
 
 
SHARE YOUR INSIGHTS
How did you sell it?
Tell us how you overcame hurdles to sell a challenging or very unique listing!