NOTE: Excel link below no longer works. New estimator was substituted and updated; see post HERE.
One aspect of the HASP plan announced this morning is a program that would encourage loan modifications for "subprime" borrowers. General idea is that as part of loan modification lender would modify loan with a TEMPORARY (up to 5 year) reduction in interest rate so that the borrowers payment would be reduced to 38% of their income. Government would then cover the costs necessary to reduce the borrowers payment to 31% of their income.
I have thrown together an Excel calculator that shows how this might work out HERE. (right click it to download and then open the downloaded file).It includes a baseline set of assumptions and then two scenarios where either the borrowers current payment or their income is less. Current version number is .8, I may tweak and update versions as more information becomes available.
If you want to experiment with other examples ONLY change entries in line 1 and 3.
Bottom line: Lender and Government 5 year costs are shown on lines 10 and 11.
If you discover problems with the calculator drop me an email at housepdx@gmail.com
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