This is just as tragic as folks losing their homes. The big players who orchestrated this congame will persist while the local and smaller fish (who also most likely got duped into lending more than an assets true value) will go under.

JayMan, I do hear what you’re saying, but the difference is that when the banks run to the government they actually DO get bailed out. The honest home owner is in trouble and asks for help to save their most valuable asset and they merely get a crooked smirk as if to say – You must be kidding right? I’m all for Capitalism, that’s why I live here. But, I’m also for a level playing field and that’s also supposed to be why I live here. Big banks are given a free ticket to do just about anything they want with little to no consequence. Is that a level playing field?

Government “help” does not neccesarily mean Uncle Sam writes people a check to pay off their mortgage. It can mean a lot of things like, for instance, making banks stay foreclosure proceedings for a 24 month period, but also requiring a minimum payment be made in the interum from the homeowner. Something like this would give REAL time for things such as re-training for another career, the time to find a job in that new career, time for consumers and RE markets to possibly shake off some of the cobwebs a bit, etc.. There are many ways a government can help out its tax paying constituancy without writing them a blank check.

Thus far, the government has not done one REAL thing to help even a single homeowner trapped in this mess in any meaningful manner. I suspect they’ll choose to sit this one out too and let the cards fall where they may. This is because helping out the American homeowner (mortgage holder) would mean angering that big bank and their shark lobbiests who single-handedly financed their political campaigns to get them elected.

This is referred to as a ~ Quid pro quo ~

You’ve hit the nail on the head. There’s no ‘bank’ to deal with, they’ve all become loan servicers and artificially pumped up prices to get ‘transaction fees’ on handling these sums of money that all pay a percentage. Why do you think the markets with the most boom have the most bust? More SPIFF money per transaction = less work, more profit. If the servicer wants to make changes to the notes they would have to absorb the loan back onto their books and truly become a ‘bank’ again.

Problem is; they know they’ve been doing some shady stuff and want to keep these accounts in the servicing office. I’ve said this before and I’ll say it again. I’m not in the business and probably don’t have a great understanding of how all this works but at this point it doesn’t matter whether you’re sub-prime, prime, put 0% down, or put 20% down – if you entered the housing market in the last 5 – 7 years there’s a huge chance that today you are trapped in your loan – whether your particular loan was predatory in nature or not. Like it or not, as saavy as you are, or aren’t, you were paying an inflated price due to all of the other hocus pocus that was going on around you – whether or not you were a contributor.

Do you think their aren’t honest banks that don’t even peddle sub-prime products and actually keep their mortgage loans on their own books? I’m sure there are, my guess is they’re probably not so happy about this mess either.

After reading some of your responses on the website I am curious. Sometimes you are on a foul-mouthed rant that no one can understand and then sometimes your sentences are well put together and offer a cogent stream of thought. I think you are a poser who just likes to cuss online….

“Dave” bought their house with a standard 30 year fixed mortgage. The problem arose when he lost his job in the consturction industry, drained every dime of his savings account paying the mortgage and property taxes, then is forced to try to pull some money out of HIS house. But wait, he can not do this because the housing prices in our neighborhood have dropped by 25%. Does he still have equity? He sure does but, it’s only 15% equity left because of this ridiculous bank created downturn. 4 banks now tell “Dave” sorry but you don’t qualify because of your lack of reserves, lack of home value, and lack of equity lack in your home (LTV). Still there are people on this blog claiming it’s the stupid idiot people who got into the risky loans who are paying. No it’s not “geniuses”, it’s now affecting everyone.

Let us explore just some of the ways the government is “helping” out the American people shall we?

-Giving everyone an $800 check to help stimulate the economy. Yeah, for about 1 week maybe.

-Getting banks to lock in the rates of a defaulting person’s ARM to “help” them out. Now who does that benifit when the interest rate gets locked in when the interest rates around you are falling to levels not seen in several years? Evey heard of a yield spread premium people? Lock it in at a higher rate and the bank pockets the difference between the locked rate and the market rate. Now, the loan is worth a lot more to the bank as well as the next buyer of that loan. It works the same way with a bank that it does with a broker folks.

-Staying foreclosures by up to 90 days does what exactely? Is the housing market going to rebound in the next 3 months or something? So, the home owner has time to do what, go get that additional education they need to re-train for another field and then go out and find that perfect job that nobody else is applying for and, in turn, then get caught up on all of their back payments, interest, and late fees now? Uh huh.

-A day ago it’s announced that the government has just taken out a huge amount of the financial safety cap requirements so Fannie Mae can have access to more money thereby making it far more likey that the entity will fail and need what….more tax payer money to BAIL THEM OUT.

-Banks getting 75 BILLION so far in federal monies to stave-off insolvancy. Bernanke said today that they will undoubtably need much much more in coming quarters. What? Last I checked it was some of you people in this blog that didn’t want the government getting involved in business because it’s Socialistic. If they can’t keep their own damn heads above water then why the hell do they get BAILED OUT?! Now who does this “help” exactely?

Many of you are taking the stance that it’s the poor little banks that are losing because of all of the foreclosures. No, no, no my naive friends. If that’s what you believe then you are obviously not privvy to how this game works. They make more money on the loan than the amount of the loan itself. Sometimes multiples more due to “securitization”.

This is how it works (in a simplified nutshell) – Any 30-year mortgage has nearly that same amount of interest profit as the amnount of the loan itself. Well, this is only part of what makes them so valuable. The banks make money on the interest charged, on the fees charged, they make money by selling the loans over and over again, they make money by being allowed by the government to simulaniously package up the loans up and sell them to wallstreet in a “securitized” packages (the ultimate scam of all time), they get more money out of those “securitized” packages because they have them rated AAA by rating agencies that only get paid for a good rating. The rating agency, by shere luck of the bank (uh huh), get paid by the very bank whose “securitized” package they rate! Don’t believe me? Don’t take my word for it, look it up. Now, the goverment allows the banks to take these “securitized” packages of loans OFF their books so the bank’s stock looks 100% better and more profitable than they would with the loans ON the books. This way investors like you and me (well, no me) will continue to purchase their crappy bank stocks thinking it’s a great investment. It’s said that fully 25% of the AAA rated “securitized” packages of loans have defaulted. Too late though, the money has already been made. Investors lose and the American people lose. The banks have already made more money on each loan than the loan amount itself and, because of this “legal” scam scenario, often as much as 3 to 4 times more than the amount of the loan itself. Poor little bankie wankies.

They’ve already made their money in every government given scam of a way possible down to the last dime, and then they get to take back the house of “Dave” and his family that had nothing to do with any of this BS.

Not angy Irishchick, just stunned.

I was in complete disagreement with the judges reasoning which is (paraphase) Home appreciation is a basis by which the state can determine whether or not a mtg loan is “fair” and whether or not the borrower is obligated to repay the loan.

This has NOTHING to do with predatory lending, misrep, or fraud on the lenders part. Remember folks, some people are destined to rent.

I was in complete disagreement with the judges reasoning which is (paraphase) Home appreciation is a basis by which the state can determine whether or not a mtg loan is “fair” and whether or not the borrower is obligated to repay the loan.

This has NOTHING to do with predatory lending, misrep, or fraud on the lenders part. Remember folks, some people are destined to rent.