Why Loan Mods Alone May Not Solve Borrower’s Problems
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It’s not just the house loan that is taking a toll on borrowers, but the car loans, credit card balances and college loans. Typical homeowners getting loan relief under the President’s initiatives spent 44.8 percent of their pretax income on housing prior to loan modification, but when other monthly debt payments were added they were spending 77.5 percent of pretax income.
After loan modification, consumers were spending 31 percent of their monthly pretax income on housing, but still a combined 61.3 percent of income on debt payments. Wall Street Journal Article