This Is What Brian and Ilsa Said To Their Bank
‘Show Me The Note, Motherfucker!’
by Gonzalo Lira
So the week before last, I wrote about Brian and Ilsa, a retired couple in their mid-to-late sixties, living in a house in the Southwest that had – unremarkably – gone underwater.
They had tried to refinance their home mortgage, under the auspices of the HAMP, the Home Affordable Modification Program. HAMP was part of the Financial Stability Act of 2009 – the famed “Stimulus Package.” Under this program, the principal of Brian and Ilsa’s mortgage loan would remain the same – they would not be getting a free ride. (Some readers mistakenly thought that they would. See note at bottom.)
But though the principal of their mortgage loan would remain the same, the period of their mortgage would be extended – and the loan itself would be refinanced with a lowered mortgage rate of 2.75%, from the 6.25% of the original mortgage.
Therefore, their monthly payments would go down roughly 40% – a significant amount for them, especially after their retirement savings had taken a big hit following the Global Financial Crisis. What had been dreadful about Brian and Ilsa’s case was that, though they qualified for HAMP – and indeed, HAMP had contacted them, at least initially – they were given the bureaucratic runaround for several months, before they were finally allowed into the program.