Quote Originally Posted by John_42 View Post
Sorry my vote goes with the camp that says the banks are not doing this out of the goodness of their hearts; their looking for the quick cash in the processing fees.

But the real enemy appears to be Freddie and Fannie. No one in this thread has brought up the issue of converting mortgages from non-recourse into recourse loans. Unfortunately I have lost my link to an anti-establishment mortgage broker's website, where he describes the new structure of the "loans to save the homeowner" and he was screaming stay away because they often required you to sign the mortgage as a recourse loan (no walking away). In fact he suggested there was a possibility that the loan could follow you even after personal bankruptcy.

This site also makes the same point - http://www.nakedcapitalism.com/2009/...e-125-ltv.html

"First, in most states, a purchase money mortgage is non-recourse, but a refi is. So some borrowers will put themselves in worse shape it they take up this offer.'

Is this the return of indentured servitude?
We have had many threads here warning readers about this since Oct. 2008. For example:

Appalling discovery about US housing policy, Oct. 2008

Big Banks Pull off The Ultimate Bait & Switch, March 2009