Are interest rate reductions enough to save homeowners from losing their homes? A reduction in a homeowner's interest rate will result in lower mortgage payments but it doesn't solve the problem of a homeowner's loan balance being higher than his or her property value.
Banks should reduce principal balances to give homeowners an incentive to stay in their properties because if homeowners don't stay, the banks will eventually have to short sale their properties anyway which means they are going to get less than the loan balances owed to them. Why not give homeowners that break in the first place?
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General Business & Real Estate
Thursday, January 28, 2010
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