Ok. Let me get this straight.
Wells Fargo & Co., the second-biggest U.S. home lender is offering to cut mortgage balances for some of Wachovia Corporation customers by 20 percent.
So if I have a $500,000 mortgage I can get my mortgage balance reduced to $300,000. I'm in. Well, probably not.
While the terms are still a bit sketchy this is coming in response to the pressure to modify loans due to rising default levels. You have to be in default to get the 20 percent free lunch.
Wells Fargo’s pilot program aimed at Wachovia borrowers is part of a plan announced on Jan. 26 to help avoid “preventable foreclosures.” As many as 478,000 Wachovia customers have access to the wider program and those who are in or at risk of foreclosure have until Feb. 28 to contact the bank. Customers may also win reduced interest rates and extensions of up to 40 years.
Well what about people that have been making their payments for say the last ten years? No free lunch?
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