It will depend on how the lender reports to credit bureau. Let me modify my statement: people may not get-off scot-free because it will depend on how they report it.

If the first and second lien holder is the same there is a good chance that it will be a negative report to credit bureau on second. Lenders will get their pound of flesh.

If the lien holders are different who knows. Lender/investor gets its money and that is all they care about.

we really need the original details at this point....but here goes:

1. they are allowing people to do this before even being late on one payment

2. they are paying off the loan holder, so there is no "write off" or bad discharge

So, those two things imply there would be no "bad mark" on the person's credit report. I've yet to see anything..even a lowering of 10 points (of course shopping at Walmart or using your credit card at bars will lower your score!)

I understand why you are assuming and saying what you are saying and obviously one would think you to be correct..
but so far in every analysis I have read, I see ways out so there would be nothing in the person's credit file to generate a negative report...
the fact their debt went down $40k, $80k just like that actually would raise their credit score.

You don't need a bankruptcy to have marks against credit. Lenders and other creditors are constantly reporting to credit bureaus info such late payments, defaults and how loan is paid off.

Credit card companies are doing it now with debt settlements. Credit bureaus will indicate how a loan was settled: paid in full, release thru bankruptcy, negotiated/settled, etc. This will impact peoples' credit scores.
People will not get off scot-free.

that's not how I'm reading it....it's not in bankruptcy or elsewhere but before any bankruptcy...
it's a means test before even missing a payment as I am reading in-between the lines. and that means test is basically does your debt surrounding owning a home > 31% of your total income?

If it was in bankruptcy it would be somewhat different I think.

I have my LOC check book out now. Whoopee! I don't really like my house anyway.

They won't deal with these issues of methods to labor arbitrage U.S. workers.

That's what I see. They are even trying to block enforcement of any kind to hire legal workers.

Where I live, the unemployment rate is over 10%, yet if I go to any of the shipyard areas, construction, even Burger King and McDonalds....all of these companies have a sea of illegal workers....

Will these various companies even consider a U.S. worker, an unemployed teenager, a middle aged woman? Not in a million years....it's like "all U.S. citizens need not apply" might as well be written on their doors.

It's beyond stupid and when will this shit end and they start looking at labor supply reality and do something?

Even worse, any attempts to put a domestic workforce first is hit with the most inane special interest B.S. I have ever seen.

I mean literally they are trying to claim that not allowing foreign guest workers to take American jobs is "discrimination". Can you believe that? Now the United States is "discriminatory" unless we allow the entire globe to take U.S. jobs?

It's just turned the original intent of diversity and discrimination into a mockery of the terms.

Millions of federal and state jobs are offshore outsourced, these are paid for with taxpayer dollars....
but the mention of doing a temporary freeze right now to employ U.S. workers with taxpayer money (that already exists, that would not expand the deficit) never even came up as a possibility.

They import 1.5 million foreign guest workers and literally we are hearing about "discrimination" because there was a token appeal that maybe jobs in the United States should first go to U.S. workers.

Does the U.S. consider a temporary freeze on these programs or reforming them to stop labor arbitrage? Of course not!

They will not acknowledge how the China trade agreement especially created a mass exodus of U.S. manufacturing and jobs to China and that in 2000 corporations could not labor arbitrage fast enough.

Don't even breath a word of this today in the press.

We heard a token "stop corporate tax incentives to offshore outsource jobs" but when the wage ratio is 100:1, 12:1, even 5:1, well, corporations are going to continue to wage arbitrage unless the government steps in with other policy.

Man I dig a well punctuated rant. Bravo!!

It has always been about class warfare.

With Pension Funds over-valued, the American Baby Boomer will not be able to afford to retire. So now we have yet another reason to stop the H-1B visa program!

According to Wiktionary:

Etymology
First used in reference to the Asian Financial Crisis of 1997, possibly coined by the economist Edward Kane.

And, yeah, there are an awful lot of similarities to that situation and how it was handled, to our present day circumstances.

Fundamentally though, the concept of "money as debt", which is our current system, is doomed to failure since it depends upon everlasting and continuous growth. The Greenspan/Bush monetary expansion and credit bubble just accelerated the inevitable. This is the harsh reality that no government official wants to admit or perhaps feels they can be allowed to admit. Sooner or later though, it will become evident a paradigm shift is necessary. We have reached, if not surpassed, the limits to growth.