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Us - Big Banks Easing Terms On Loans Deemed As Risks

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http://www.nytimes.com/2011/07/03/business/03loans.html?_r=1&ref=business

As millions of Americans struggle in foreclosure with little hope of relief, big banks are going to borrowers who are not even in default and cutting their debt or easing the mortgage terms, sometimes with no questions asked.

Two of the nation’s biggest lenders, JPMorgan Chase and Bank of America, are quietly modifying loans for tens of thousands of borrowers who have not asked for help but whom the banks deem to be at special risk.

Rula Giosmas is one of the beneficiaries. Last year she received a letter from Chase saying it was cutting in half the amount she owed on her condominium.

Ms. Giosmas, who lives in Miami, was not in default on her $300,000 loan. She did not understand why she would receive this gift — although she wasted no time in taking it.

Banks are proactively overhauling loans for borrowers like Ms. Giosmas who have so-called pay option adjustable rate mortgages, which were popular in the wild late stages of the housing boom but which banks now view as potentially troublesome.

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“I used to say every day, ‘Why doesn’t anyone get rewarded for doing the right thing and paying their bills on time?’ ” said Ms. Giosmas, who is an acupuncturist and real estate investor. “And I got rewarded.”

Are the banks doing this to limit lawsuits?

I wonder what's in the small print if you agree to this?

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http://www.zerohedge.com/article/banks-commence-wholesale-unsolicited-mortgage-forgiveness

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Next up: everyone in America stops paying their mortgage, or demands a 50% haircut on existing debt, now that the example has been made. And in the meantime, banks will somehow continue to keep the mortgages, which they have now cut by up to half, at par on their books following some brand new, thoroughly senseless announcement by the FASB which says banks can mark anything to whatever price they chose in perpetuity. Because otherwise, the TBTF lenders will suddenly find themselves in a massive deficiency on their Tier 1 capital, also known as completely insolvent.

......

Not surprisingly, this will be the same rhetorical question posed next by everyone who still has a mortgage, and not only by those, roughly 28% of all, who are underwater on their mortgage. Which means that wholesale mortgage reduction for everyone in America is next on the docket. Which also means that the "rent" component of personal income is about to surge from the current $50 billion annualized to well into the triple-digits, or about 1-2% of GDP, just enough to offset recession yet again.

Zerohedge take on this.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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