Tidewater Real Estate Blog

September 14th, 2010 4:20 PM
New Program Aimed to Keep Owners Paying
As strategic defaults rise, Loan Value Group, headed by Howard “Howie" Hubler, a mortgage trader who was deeply involved in Wall Street losses three years ago, is offering banks a way to resolve the problem.

The program involves the investors structuring a reward for borrowers, usually 10 percent of the loan balance, payable when the loan is paid off. While the reward won’t give the borrower positive equity, it could give him a reason to keep paying.

The plan is paid for by whomever owns the loan. So far, three hedge funds have signed up. Loan Value Group tells investors that the program isn’t affected by accounting rules that otherwise would require a modified mortgage to be written down.

Borrowers pay nothing to participate and participation doesn’t affect their credit scores.

Posted by Brad Nichols on September 14th, 2010 4:20 PMPost a Comment (0)

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