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Big banks and the feds are working to throw an $80 billion lifeline to companies holding bad loans. But no one seems interested in rescuing families who need just a little help.
By Jim JubakBanks to customers: Drop dead!!
Nobody in the financial industry is saying that in so many words. But their actions speak volumes. While bankers have plenty of time to negotiate the terms of an $80 billion fund to rescue their own mortgage portfolios, customers are getting a busy signal if they want to fix a problem mortgage before it explodes into foreclosure or bankruptcy.
According to a Moody's (MCO, news, msgs) survey of the mortgage companies that service about 80% of all subprime mortgages, lenders have eased terms on just 1% of the subprime mortgage loans that reset to higher interest rates in January, April and July of this year. That's a huge problem, again according to Moody's, because data indicate that between 5% and 15% of subprime loans that are current before they reset will go into default after reset they if they are not modified. "
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