Wednesday, December 31, 2008
Stunning, But Not Surprising
Attempts to loosen terms on hundreds of thousands of delinquent home loans may be hindered by so- called piggyback second mortgages that gained popularity during the U.S. housing boom, Federal Reserve researchers said.What a shock!! Next, they'll do a study on whether lower interest rates cause mortgages to be more affordable, and solemnly conclude that it doesn't work for negative amortization mortgages that recast. It's times like these when Tanta's loss bites the hardest. I can only imagine her eloquent sputterings on this, um, research.
Most of the piggyback loans, often used in place of down payments or mortgage insurance, are held by lenders different from the holders of the home loans, making it more difficult to secure approval needed for modifications, according to the study published in the December Federal Reserve Bulletin.
I did my study on the topic long ago, and here's a link to my presentation of results.