The reason this program is so important though is because we know something is in the works over at Treasury to do something like it. We may even get news of that later this week, according to some of my sources.
Wednesday, March 24, 2010
Principal write downs??
Can this week get any worse. First health care, then California throws away 200 million and now news of principal write down plans...... I thought it was just a few homes with old Countrywide loans but now CR indicates more are in the works. I never thought I would see this.
BofA announced a principal reduction plan for certain Countrywide borrowers. CNBC's Diana Olick reports that Treasury might announce a principal reduction program in the next few days: Bank Of America's Mortgage Write Down—Just the Start? The Special Inspector General for TARP criticized HAMP today. The report was critical of the changing goals (no way 3 to 4 million will avoid foreclosure), the performance metrics, the marketing of the program, the low conversion rate to permanent status, and the high risk of re-default. The report notes that Treasury expects between 50% and 66% of temporary modifications will become permanent, and 40% of borrowers in the program will re-default (either while temporary or permanent). Those are horrible numbers.