2 replies to this topic

[Rogerdodger]

But only for "troubled" borrowers!

"Some troubled borrowers will escape with refinanced loans as low as 5.25 percent."

Subprime bailouts: Chump check
Responsible loan payers are crying foul about the breaks that delinquent borrowers are getting.
By Les Christie, CNNMoney.com staff writer
November 5 2007: 1:22 PM EST
NEW YORK (CNNMoney.com) -- Not everyone is happy about mortgage lenders' latest efforts to help troubled borrowers.

Take Teresa Nelson. Instead of going for an adjustable rate mortgage with its lure of low initial rates, she opted for the security of a 30-year fixed at 7.10 percent for a house she bought in Pinellas Park, Fla. in December, 2005.
"I was well aware of what an ARM meant, and was staying far away from those snake-oil pipe-dream promises," Nelson said. "I also wasn't shopping for a short-term, big payoff investment - I was looking for my home, until I retire."

But many delinquent subprime borrowers who went for low teaser rates that shot up to unaffordable levels are now paying lower rates than Nelson as part of a new round of foreclosure prevention packages. And she doesn't like it.
For example, one subprime borrower had a riskier hybrid adjustable rate mortgage (ARM) with a rate of just under 7 percent that was going to reset in December to 10.5 percent. But last month, as part of a new bailout plan from Countrywide Financial, the lender gave him a rate reduction to 5 percent on his loan, saving him hundreds of dollars a month.

Nelson feels cheated and has little sympathy for people who she believes weren't as careful as she was. "Everybody was seeing dollar signs," she said, "and let their greed get the better of them. So, no. No bail-out, no assistance with my tax dollars. Not one red cent."

She's not alone. Last month, many CNNMoney.com readers expressed outrage to bailouts - whether they involved tax dollars or not - after Countrywide announced good deals for bad loans.

[OEXCHAOS]

I wonder if I can get a refinance at that rate? I'm looking at 5.99% right now for a 30 yr. Fixed. No points. That's the best I've seen in a while. You'd think Citywide would cut a tougher deal. Maybe take a piece of the action on the back end with a balloon payment at sale or something... Mark

[Cirrus]

If you really work it you can find 5.75 for a 30 yr fixed with a solid personal balance sheet and outstanding credit. You may have to pay as much as a point.