Comments on: Disabled Vet From Marine Corps. Can’t Get Help From Countrywide

By: Placer County Homes and Land

Placer County Homes and Land — Tue, 04 Dec 2007 05:04:46 +0000

When You Need to Do a Short Sale or Loan Work Out, Who Do You Call? …

I have had numerous home owners contact me lately who owe more on their homes than they are currently worth. Some of these home owners are trying to keep their homes and would like to renegotiate thier loans and others…

By: bork

bork — Mon, 03 Dec 2007 13:56:18 +0000

I for one have a 6.34 30 year fixed loan…why should I keep paying at that rate if all these fools who got caught up in the subprime BS get a bailout, i am being a responsible payer and never refied my home..since purchase in 1993..and i am losing equity everyday….not that i care i work for my money…nothing is free in life folks…nothing..oh and do me a favor…stop with the Subprime stuff…its a credit crunch…not a subprime crunch.

By: Skeptical

Skeptical — Mon, 03 Dec 2007 08:54:45 +0000

I don’t like the vibe I’m picking up from the goverment (Paulson, Schumer, etc.) that I have to pity the distressed homeowner so much that I’m willing to pay for a bailout. I have empathy for what must be an emotionally hard situation (foreclosure), but it was their choice to gamble and gambles often result in losses. I don’t like the vibe I’m picking up from Wall St. that I have to pity the investor so much that Im willing to pay for a bailout. I have empathy for the distressed investor, but this also was a gamble. Borrowers and investors have always have in large part been naive, but there was regulation that helped protect them. With exotic mortgage products and “structured finance” (SIV, CDO) going into bold new areas this decade the regulation was “gamed” for lack of a better term. ***BTW, I have always had a pet peeve with people blindly putting money into managed funds (including and especially retirement) and not asking any questions or doing any monitoring besides rate of return. These fund manager are not good-willed fairy godmothers concerned about your future***

By: Dusty

Dusty — Mon, 03 Dec 2007 07:34:00 +0000

DougInSpokane and Lee have both made excellent points. We are watching a train wreck in slow motion. A government bailout in the form of a rate-freeze would create a cluster F of a whole new order. Like it or not, CDO’s and MBA’s have been leveraged past the point-of-no-return. By freezing rate’s on ARM’s the government will be devaluing the assets underlying the mortgage backed securities. What a stupendous idea, let’s destroy the mortgage back securities market! Also remember that even though home values are precipitously declining, they are still not where they “should” be. A plan to “save” homeowners will only artificially inflate or slow the deflation of the housing price bubble because all of those homes that should be dumped back onto the market as a result of foreclosure will be “saved” and this will only drag out the already long overdue price correction. On top of the moral issue mentioned by Lee in his post. This is a terrible idea and if you think this is just about foreclosures you need your head examined….

By: John in Buffalo

John in Buffalo — Mon, 03 Dec 2007 07:33:58 +0000

NONE OF THIS SHOULD HAVE HAPPANED IN THE FIRST PLACE! Alan Greenspan is an idiot and is the root of the problem.

The housing boom was all manufactured by Greenspan to bail us out of the tech fall out and Sep 11.

It served its purpose for a couple years then took on a life of its own. The gov watched what was going on for years, without ever regulating any of the “exotic mtg products.”

Everyone was in on it: banks, realtors, fed, the whole global economy. GREED.

Fed needed to act 5 yrs ago; it was not rocket science to forsee any of this, but the Fed Gov. decided to sit back and play stupid.

I HAVE BEEN WAITING TO BUY A HOUSE FOR 5 LONG YEARS. What thanks do I get for having a brain? Why should anyone get bailed out, this is a free market set up by the fed.

I don’t see any bail out ever happaning. Too much red tape and too hard to sift through who is going to eventually pay.

REGARDLESS, even if you can pay, why would you pay on a house that you are 150k upside on.

Let it play out – time for millions of middle americans to learn a very hard lesson in economics.

By: Nadreck

Nadreck — Mon, 03 Dec 2007 05:13:02 +0000

There is a simple way to have equity and interest rate relief at the same time.

The interest rate relief is optional for the homeowner. If the homeowner chooses interest relief, then the homeowner loses, to the lender, a certain amount of ownership in the house. I don’t know exactly what the numbers would be, but something like this: if the homeowner chooses to reset to 6%, then the homeowner loses 20% equity in the house. If the homeowner chooses 5%, then the homeowner loses 100% equity in the house (i.e. becomes a renter).

Note that the homeowner can still be held in default if payments are not made at the new level.

______________________________
You can’t focus on blue sky.

By: Lee

Lee — Mon, 03 Dec 2007 01:07:52 +0000

As MarkK wrote December 1st, 2007 at 7:14 pm, this will close down the Credit Markets to the tune of 5 or 10% of current levels.

Those Investors are some big bad man smoking a cigar, more likely they are:

-A Florida Schoolteacher. Her pay comes from the general Fla Fund, which had a run on it this past week. Her pay was met because they borrowed short term to make payroll. When you borrow money to make payroll, you aren’t solvent.

-See all those Micro Credit Loans that give $100 to someone in Jakarta to open a restaurant? Those won’t be bundled, sliced up, marked to market and converted to AAA Tranch Paper, because no one will buy the notes if they can be downgraded by a government via legislative fiat. All of those people won’t get their chance AND those who bought their notes will not be repaid.

-Do you have a Pension? 401K? Ira? Own any investments? Then you lose, too.

-Did you rent and save the past 7 years? What if, Like ME, you could see this was a Ponzi Scheme, and waited to buy? There were 2 or 3 times in the past 2 years I looked ready to jump in, and each time I looked at local income support levels and the home prices simply did not make sense. So I waited.

Why IN HELL, should I pay someone who lied, or misled on their 1033, and have to subsidize THEIR MORTGAGE that they cannot afford?

This penalises the wise at the benefit of the foolish, and penalises savers at the benefit of consumers who recklessly spend themselves into a 6-figure negative net worth.

This is he worst financial blunder by the U.S. Government since Wage-Price freezes or Smoot-Hawley.

By: duh

duh — Sun, 02 Dec 2007 20:59:09 +0000

1. How can anything be done across-the-board if it involves verifying income, appraisals or new appraisals, or any details of the borrowers situation – the work was shoddy or non-existent here when the loan was first made – how is it going to be any better the second time around? Are they going to do a computerized re-computation of the existing loans using the fantasy data that is on the original applications? Income was probably fake, appraisals are 20% lower in the high foreclosure areas, etc.

2. Ditto for those that say that if this comes with any coercion, it will have to freeze the MBS markets even worse than they are now frozen. Even if it is completely voluntary for MBS/CDO holders, it cannot be good for the market for these securities. One good lawsuit might be able to prevent the government from doing this by force.
And it formalizes the fact that the lower traunches are
completely wiped out.

3. Falling prices are a big hammer which is not being addressed – who will to stay in an $800k loan on a
$500k and falling property and for how long regardless
of the payment?

By: citizen-1

citizen-1 — Sun, 02 Dec 2007 19:55:14 +0000

HEY, I THINK I HAVE THE SOLUTION FOR ALL THIS…
LETS MAKE WORLD SAVINGS AKA WACHOVIA BUY ALL OF THE SUB-PRIME MORTGAGES. AS I REMEMBER THEY USED TO ACCEPT BORROWERS WITH 500 FICOS AND PUT THEM INTO NEG-AMS AND START THEM WITH THE 1% INTEREST.
THEY ARE STILL MAKING TONS OF CASH WITH THIS LOANS…. WHO NEEDS THE GOVERNMENT WHEN YOU HAVE BANKS LIKE THIS.

By: Matt

Matt — Sun, 02 Dec 2007 19:34:25 +0000

I knew the Iraq war would be a disaster.
I knew Greenspan’s 1% interest rate would be a disaster.
I know this bailout will have unforeseen consequences
Buy gold. Vote Ron Paul.