It Depends on What You Mean by “Modify”

On NPR this morning, House Minority Whip Eric Cantor said, “the default rate on mortgages that have been modified thus far is very high”.  This statement caught my attention because, first, I have been saying for quite a while that getting people out of ARMs and into 30-year fixed-rate loans is the best way to prevent foreclosures, and, second, it is intentionally misleading.

Last week I read about two people in south Florida who had their mortgages modified.  One woman’s interest rate dropped 11% when her terms were changed.  Another man saw no change in his monthly payment because the bank added so many fees and penalties.  She kept her house; he went into foreclosure after all.

Rep. Cantor is right that the default rate on modified mortgages is high, but only if your definition of “modified” is very broad:

“It’s becoming more and more clear to us that if you do real modifications the default rate is significantly lower”, said Tom Miller, the attorney general of Iowa, who has led a group of state officials pushing the industry to modify more loans. “They shouldn’t be called modifications if people pay more or approximately the same”.

The facts are that genuine modifications keep 75% of borrowers in their homes, and allow them to stay current.  If the “modifications” Rep. Cantor criticizes fail, it’s because they aren’t modifications at all.

Filed under: Current Events, Politics, Rantings on February 25th, 2009 | No Comments »

Hard Times

Things right now are going very badly for me.  Here is a short list, in no particular order:

  • I have no working toilet in my house.
  • I have several exams and papers due this week.
  • My poor wife has been injured or sick for several weeks and I am powerless to make her feel any better.
  • My email seems to work only around 50% of the time.
  • Cox Cable switched from the national PBS high-definition feed to the local one, and now I don’t get the same programs; other programs I like show at different times; the signal looks much worse; and I will now have to endure the frequent pledge drives, which the national feed doesn’t carry.
  • I still haven’t got my motorized bicycle running.
  • I changed guitar strings a few weeks ago, and now my Telecaster won’t stay in tune with itself.
  • My guitar makes an annoying buzzing sound because the outlet my amplifier is plugged into isn’t grounded.
  • I cannot stop eating Girl Scout Cookies and I feel guilty.
  • I have a million chores to do around the house and very little time to do them.
  • I have to read hundreds of pages for school, and I am not up to the task.
  • I am very tired, and it’s only nine o’clock in the morning.
  • When I am at school, I cannot concentrate on what my professors are saying, because I am thinking about one or more of the above.

Filed under: Health, House, Rantings, School on February 25th, 2009 | 1 Comment »