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Mortgage News Daily combines the expertise of some of the housing industry's leading minds with the power of social media to offer an always lively, constantly evolving web community. MND communicates breaking news, streams video, and provides expert opinion and commentary to a community of interested market professionals and curious consumers.Ironic Twist: Wells Fargo Cuts Borrower Payments. Bets on Housing Recovery
Wells Fargo last week announced it will let some at-risk borrowers pay interest only on their mortgage loans in order to stay current and remain in their homes.
The announcement makes you to stop and think: Wells is gambling on a housing recovery to make up for losses. That sounds very similar to the mid-decade business models of so many lenders who, counting on continuous rises in home values, bet the ranch on interest-only loans. We know how well that went.
So Wells’ action has the feeling of a very ironic twist. But the lender’s new strategy does indeed improve credit quality --- or at least the appearance of it in the short term --- and no doubt will reduce the number of homeowners who might otherwise simply mail in the keys.
It’s a very strange world that we’re muddling through, isn’t it?
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Mortgage News Daily
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YOUR MESSAGE HERE
Ironic Twist: Wells Fargo Cuts Borrower Payments. Bets on Housing Recovery
Wells Fargo last week announced it will let some at-risk borrowers pay interest only on their mortgage loans in order to stay current and remain in their homes.
The announcement makes you to stop and think: Wells is gambling on a housing recovery to make up for losses. That sounds very similar to the mid-decade business models of so many lenders who, counting on continuous rises in home values, bet the ranch on interest-only loans. We know how well that went.
So Wells’ action has the feeling of a very ironic twist. But the lender’s new strategy does indeed improve credit quality --- or at least the appearance of it in the short term --- and no doubt will reduce the number of homeowners who might otherwise simply mail in the keys.
It’s a very strange world that we’re muddling through, isn’t it?
If you would like to opt-out of receiving email forwards from this person please click here to remove your email address.