The worse your credit record, the lower your rate … (that's not a typo)

Well, Team O announced their mortgage foreclosure plan.

Folks who have — or soon will default on their mortgage commitments will get their loans repriced at 2%, lengthened to 40 years, and then have their loan balance reduced, if necessary, to cram the defaulters down to payments (P&I, insurance, taxes) equal to 31% of their income.

If you’re sitting with pristine credit, banks MIGHT give you 5% to 6% for 30 years with a 10% downpayment.

Default, you get 2%; credit worthy, you get 5%.

Who in the world thinks that’s fair ?

Gov’t fact sheet:
http://blogs.wsj.com/economics/2009/03/04/treasury-loan-modification-guidelines/

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One Response to “The worse your credit record, the lower your rate … (that's not a typo)”

  1. SMH Says:

    The fact that the US economy was brought to its knees by irresponsible mortgage recipients is so absurd, it’s almost beyond words.

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