Sorry those aren't the right lyrics...insert proper word and you catch my drift...
Today, I want to dive into the FACTS that the Government has provided about its brilliant idea to meddle in the Loan Modification market for delinquent homeowner’s. After all, I’m pretty sure that these borrowers were delinquent for a good reason in the first place. Putting faith in these delinquents is kind of like taking King Henry the 8th’s word that he would be faithful the 2nd, 3rd, & 4th time around….minimum wage can’t support a half a million dollar mcmansion.…but who am I to try and tell the Gov't this, afterall, I also don't spend all day trying to fit a square peg in a round hole either....
Here is a quick rundown: (Through end of July...Data the Gov't has Provided)
- A total of over 1.2 million households have applied for this Government sponsored loan modification program.
- 630,000 households have been dropped by the program due to non-payments, not filling out paperwork, etc….50% drop-outs...looking good already!
- 438,000 households are currently in the Trial phase of the modification program….not real relevant…let’s move onto the success stories.
- 421,000 households have successfully completed the trial phase and become permanent loan modifications…that’s 35% of all who started…now here’s the good stuff….
- 15% of these PERMANENT loan modifications have made it 6 months after they became permanent....let me reiterate 15%! It gets better….
- And of the 15% that made it 6 months….1/5th of them have defaulted AGAIN over the course of the next 3 months….check please!
Simply put, I don’t think many of us would continue to get paid by our employer’s with a success rate of 12%….maybe hitting .120 as a pitcher is in the Big Leagues is acceptable, but as a Government, please don’t propagate the success your having with these Loan modifications when that simply isn’t true.
This process has just delayed the inevitable...prices are heading lower and the gov't can't do anything to stave it off this time...I can't promise you they won't continue trying to stick that square peg in that round hole though...
Hopefully I have some Seinfeld fans out there...Put in the famous words of Jerry Seinfeld looking at George Costanza while lying face-down on the floor with his pants down…”And you want to be my latex salesman???”
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