"- Wells Fargo & Co., the bank that gained a portfolio of option adjustable-rate mortgages when it bought Wachovia Corp. last year, cut the principal for delinquent borrowers in some loans by as much as 30 percent."


dbaumer at 09:46 2009-12-10 said:
[size=18:27df78de94]30% was the extreme. Most principal reductions have been in the range of 15% - 20%.

Let's see, loan goes neg am until it reaches 110% - 115% of the original loan amount... Couple that with the amount of interest accrued on the delinquency (let's say 5% - 10% of the orginal balance... voila!

So what Wells is actually doing is forgiving the interest on the loan that has not been paid, NOT true principal reduction. [/size:27df78de94] Permalink

add a comment | go to forum thread