This blog was started a little over 8 months ago with one purpose. To promote massive loan modifications. My blog was actually the only website on the internet that disseminated information about loan modifications to the media and to consumers.
8 months ago, a loan modification was like a white elephant. Rare, never talked about and rarely will you ever see one with your own eyes.
Times have changed and since then it has been all the rage in the media. The day I saw President Bush on TV talking about loan modifications, I knew that I made one of the best decisions of my life to start these websites and since then, the popularity of the “loan modification” has grown in leaps and bounds.
Today it has gone a step further and a step in a direction that I have been calling for the last 3 months.
“Reducing the rate of preventable foreclosures would promote economic stability for households, neighborhoods and the nation as a whole,” Bernanke said. “Although lenders and servicers have scaled up their efforts and adopted a wider variety of loss-mitigation techniques, more can, and should be, done,” the Fed chief said.
One of the suggestions Bernanke made was for mortgage and other financial companies to reduce the amount of the loan to provide relief to a struggling owner. “Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure,” Bernanke said.
The facts are that thousands of Americans are saying, “Take this house and shove it, I aint paying you no more!” Their walking in droves from their homes that are more than under water. Hell, their sitting at the bottom of the ocean and Countrywide would have to hire Jacques Cousteau in their loss mitigation department for deep sea expeditions to contact borrowers in the deep sea housing wreckages that sit on the ocean’s floor.
More from Fox:
With low or negative equity in their home, a stressed borrower has less ability — because there is no home equity to tap — and less financial incentive to try to remain in the home, he said.
Bernanke acknowledged this idea might be a tough sell to lenders. Lenders, he said, are reluctant to write down principal. “They said that if they were to write down the principal and house prices were to fall further, they could feel pressured to write down principal again,” Bernanke said.
Still, Bernanke suggested such longer-term permanent solutions may work better than shorter-term and temporary ones, where the distressed homeowner could find himself in trouble again. “When the mortgage is `under water’ a reduction in principal may increase the expected payoff by reducing the risk of default and foreclosure,” he said.
To date, permanent home mortgage modifications that have occurred have typically involved a reduction in the interest rate, while reductions of the principal balance of the loan have been quite rare, he said.
“Measures that lead to a sustainable outcome are to be preferred to temporary palliatives, which may only put off foreclosure and perhaps increase its ultimate costs,” Bernanke said
Lenders last year were on pace to initiate roughly 1.5 million home foreclosure proceedings, up from an average of fewer than 1 million new foreclosures in the preceding two years, the Fed chief said. More than one half of the foreclosures started in 2007 were on subprime loans givens to borrowers with blemished credit histories or low incomes.
The housing collapse dragged down home values, especially clobbering these subprime borrowers. Many were left with mortgages that exceeded the value of their homes. They were further socked by low introductory rates on their adjustable mortgages resetting to higher rates, making their monthly payments difficult or impossible to afford. Problems in the credit markets have made refinancing a mortgage harder.
My prediction is that in the next 2 years that in order to keep people from walking from their homes, that we will see significant balance reductions during the loan modification process. I suspect in California we will see $100k-$300k reductions in the near future.
That is the only way to mitigate further damage to the housing market!
{ 33 comments… read them below or add one }
While I agree with most of what you say, and it is true that the Fed is failing to address the reality of the situation, you simply cannot place all the blame on the lenders and wall street. Borrowers lied about their income and signed on the doted line for a loan that they knew would adjust in 2 years. What ever happened to people taking responsibility for themselves. Why is it up to the government to bail people out of stupid decisions. This is the result. A bailout now will simply worsen the problem. Let the market play out, and the prices correct.
We wonder who the heck is running the Treasury while Paulson is out playing with his banker buddies.
Robb,
So your advice is to let an out of control, fraudulently, speculative market just natuarally correct? Common sense tells me that this is bad idea and you may want to take some hints from this blog post.
When the Chairman of the FED and our US Treasurey Secretary makes remarks like the ones above, you better be worried, just a bit.
Mark my words. Massive principle reductions will happen soon, very soon and en masse. The other choice is 3 million homeowners walking and 3 million vacant homes.
That is just not good business sense and that is now what this is coming down to. Not that the homeowner screwed up and let them suffer.
It comes down to what is best for the banks and the economy. 3 million vacant homes or 3 million principle reductions to keep people from walking?
Sorry boys and girls, the pedulum has swung and it looks like homeowners now may be in charge of this dog and pony show.
It is about time the fed finally addresses the real issue….the fact that we are being faced with a complete failure of the financial system. It would help tremendously if the tres would comfort the investors and let them know that the govt will not let the fannie mae stuff go belly up.
A big part of the issue is perception that all and any mortgage securities are risky…this results in the market not buying anything related to mortgages….even fannie mae which is the most secured return beside govt bonds. We are in an enviroment that is now hysetrical and self fulfilling.
When lenders/investors eliminated the a paper programs that many of the folks who had to finance into the 2/28 and 3/27 programs initially then the result is no option for these poeple. The a paper programs meant to reduce the payment and rate for those refinancing out of subprime were eliminated. Now there are no outlets for these homeowners except to beg the lenders to modify the current loan or face foreclosure.
It is just sick to see the market turn their backs on good borrowers because of hysetrial. The current trend is very bleak and it will take either a big lender to offer the a paper programs eliminated or the govt stepping in to take these securities.
subprime was supposed to be for those who had a temporary situation and were able to refinance into a paper or alt-a paper when they had increased their scores and improved their financial condition in the 2-3 year period.
Now the products for these people are gone and there is currently only 2 alternatives- modify or foreclosure.
the govt needs to step up and put some confidence in the market- they allowed this debacle and now is the time to correct this before we expierence a complete collaspe of the financial system.
I bought my home with a fixed rate and pay my payments on time. No problem. However, if lender starts reducing loan balances, I want mine reduced. If not, here comes a huge class-action lawsuit. Bet on it!
You Know,
At some point the real-estate market and mortgage market has to fold in on itself. People used to buy a home as a place to live and raise their children. That is not what happens any longer. I believe this is one of the reasons the whole thing is happening. Salaries are not going up enough to support a market like this. Only very few are going to be able to afford homes as it is. It is a false value elevation to appease the greed of a few, and leaves the masses out in the cold.
Everyone wants a home of their own, and in many communities, it is difficult to even rent. In my own, very few apartment complexes, and those that exist are ghetto like. Very few rental homes, and those that become available are snapped right up. The locals do not want to rent. They do not want to risk their houses becoming “ghetto like” as the apartments I mentioned. They are very cautious.
So, everyone can keep buying, trying to get the value of the houses up, then selling, and doing this cycle over and over again. You will get rich I guess. But, it can’t continue unless there are buyers out there. Buyers who can afford these inflated prices. Then these investors are going to cry foul, asking for help bailing out.
No one can ever have enough. Our greed over rides the practical.
Yes, after many, many, many attemps to have Indy Mac call me back
regarding a short sale I will be not paying this joke of a lender. Faxes, letters, phone calls to them with no response as I’ve continued to make pmts. I bet I’ll hear from them after the 15th of the month.
In the meantime I will be consulting with the bankruptcy attorney regarding surrendering this “black hole” that I’ve been dumping money into. I wanted to do a short sale to reimburse tne 2nd lender as much as possible; they don’t/can’t call me back so they can have the whole enchilada to eat.
This is supply and demand guys, if you owe 400,000 on a 200,000 piece of property you are walking. THE MORTGAGE SERVICERS CANNOT RENEGOTIATE A RATE AND BALANCE THAT THE INVESTOR BOUGHT. The wake-up call here is there is no reason to stay. The government is going to nationalize (have to, only ones with any money, ours….)the mortgage business and next time values fall from supply and demand, THE IRS WILL OWN YOU, THERE WILL BE NO WALKING AWAY…………..this is the D train on the tracks guys, there is no reason to keep these houses that are the collateral for all this toxic crap, about 38% of all investments and I didn’t believe that number either but look what is happening, IT IS EVERYWHERE, IT WAS THE ONLY INVESTMENT PLACE TO BE AND EVERYONE WENT THERE, 50% REDUCTION IN THE PRICE OF THE COLLATERAL, THIS IS BRAIN DEAD DEPRESSION, THERE IS NO FIX FOR THIS MESS……….STOCK AND HOUSING TANKING TOGETHER, WE ARE WATCHING HISTORY GUYS……………….
I think loan modifications are the answer. But only when there is a principal reduction included that makes sense. This could prevent A LOT of foreclosures.
you hit it on the head- only it is supply and demand of the backed securities themselves….
As was said the govt is going to have to buy a good deal of mortgage backed securities (MBS) for there to be confidence restored in the market and to have any chance of any type of recovery….you would think the fed would learn from the 30’s. When you see a greater than 1.50% spread on MBS from the treasury yield it is based off…you do not have a serious issue but close to a complete collapse of the security itself.
A main issue is that investors are not even buying the fannie mae backed stuff unless marked down to 65-70 cents on the dollar and even then at this point the investors are scarce except bond grave dancers who eat this trade all day.
Rates should be in the mid 5% range and we keep pushing towards 7%.
We have the perfect storm for a complete collapse-
distrust in even the well performing fannie mae MBS (mainly due to fear).
home-buyers on the sideline waiting for home values/prices to hit bottom
evaporation of the quality A-paper mortgage products for those who were in need to refi out of their subprime or teaser rate program (elimination of almost all of the A- and Alt-A programs may have had the single greatest influence on the increase in foreclosure rates initially.- If you throw a person in the middle of the ocean with out a life jacket then they will eventually drown)
Govt’s inability to fully understand and the recognition of the response required Aug-Sep 07 (severe intervention was required immediatley)
we will see a bail out of some type because we are smack in the middle of a historic financial crisis that requires the intervention to the degree we have never seen. You keep hearing Bernake “hint” about the different methods on the table. It will be hard to nationalize the industry but you will most likley not ever see a 620 fico no-doc 100% investor program again.
The downfall was not suprime itself (the performace rates on the owner occ stuff is fairly inline with historical data we just have more numbers because there are more people)
what is out of line and traumatic to the system is much of the investor speculation junk (90-100% investor stated, no doc , sign here if you have a heartbeat crud)
our fate was sealed when these type of programs were offered and pushed into the market. We saw a sig increase in the values when these products hit the market and boy not only were builders falling over themselves to set up a mortgage department to offer this junk but just about any bozo who could plug a sign on the corner.
Moral Hazard?? If there is not some intervention very soon we are going to see explicit examples of what moral hazard really means.
This “too little, too late” offering may not be the most welcome of thoughts to add to a discussion on pending economic meltdown but here goes. I know we all adore our credit cards, credit scores and byzantine financial labyrinths of debt instrument shell games, BUT…..for anyone who remembers that the US Constitution is “the supreme Law of the Land” (Art. 6, Para. 2, clause 2), consider the following: (Don’t take my word for it either. Consult, the Constitution yourself, google an article written by Alan Greenspan in 1966 called “Gold and Economic Freedom”- and YouTube a documentary called “Money As Debt”)
THE CONSTITUTION
1) only provides for CREDIT for the government, overseen by Congress and the
Treasury of the United States of America (Art 1, Sec. 8, clause 2);
2) it only permits money in the form of gold or silver coinage (Art. 1, Sections 8 & 10),
which inherently means that paper money must be backed by it;
3) it does not permit our government to create a central bank “credit card” for itself
(Federal Reserve Act, Dec. 1913), nor use that credit card as a device to artificially
but no less unsustainably support the now institutionalized, private-sector, pyramid
scheme known as fractional reserve banking.
RESULTS OF CONSTITUTIONAL NON-COMPLIANCE:
1) Large-scale, industrialized warfare is impossible without central banks, ours or other
nations’; it can’t be funded.
*WWI began seven months after the Federal Reserve Act was passed; we became
the allies leading funder/supplier of wartime supplies; our private-sector
industries would not have retooled their peace time factories for war purposes
without the promise of payment from government (enter debt-based
government investment/subsidies).
*None of the 20th century’s major wars could have been funded without
debt-based money’s capacity to artificially fund them.
*The Manhattan Project (nuclear warfare) wouldn’t have happened without WWII.
2) Inflation is the natural marketplace’s way of saying that the supply of money
exceeds the marketplace’s sweat equity demand for it. Money only needs to be
created to match the sweat equity growth of the marketplace.
*Inflation caused by the spending needed to produce war supplies and to fund
our military deployments means our soldiers are sent overseas to fight/die as a
result of unconstitutional government policies while we at home work harder
and harder to pay our bills and, oh yeah, pay off our houses.
*Inflation means we have less time, energy and money to spend on our families,
personal business, hobbies, involvement in our communities, educating
ourselves, staying up on current events, keeping an eye on our elected
officials, etc.
*Money problems are a leading cause of divorce
*Our kids are deprived of our input in the day to day happenings of their lives
so they get what they think they need from other sources, e.g. the media,
music, equally uninformed friends, etc.
*As all these problems compound themselves and so we escape into our
national pastimes, e.g. armchair sports, video games, gambling, substance
abuse, spending money as a pacifier, etc.
Adherence to the Constitution could have and still can prevent all this if we use it. Of course, they don’t teach it in school any more though so we don’t know that our passive contempt for it equates to a passive contempt for ourselves and our kids. Oregon has a law (ORS 336.057) that’s been in effect since 1923, pertaining to instruction on the Constitution. They don’t enforce this law, but it IS the LAW. This law requires public schools to provide five full years of Constitutional studies, minimum, no discretion.
If we all had this much opportunity to review, discuss and understand the original intent of our supreme law, we wouldn’t be so dismissive of quaint, “antiquated” notions like metal backed money, which by the way, is the reason why the dollar became the international standard to begin with and why its divorce from this standard is causing it to fall off the table, right along with our national sovereignty and republican form of government. Run rabbits run.
reducing principle amounts? Massive principle reductions? WTF?!
Idiot!
When the Chairman of the FED and our US Treasurey Secretary makes remarks like the ones above, you better be worried, just a bit.
Eff ‘em, let it crash.
Rob,
“…you simply cannot place all the blame on the lenders and wall street. Borrowers lied about their income and signed on the doted line for a loan that they knew would adjust in 2 years.”
You’re right about not placing all the blame on just one group. Every person who let their greed/pride get in the way or just let their guard down can take a slice. But you have to have a little sympathy for the poor schmuck who really wanted to improve the lot of his family and fell into the trap set by the “big boys”.
Many of these people were just not intelligent enough or had the resources to figure out the long term game devised by the likes of “Sir” Alan Greenspan and were brought up trusting what the government had to sell. Now, they’ve been hung out to dry in the winds of history.
And I think my credit card debt should be wiped out, then I can purchase the 52 in. LCD TV I want and thereby stimulate the economy.
There should be LOTS of foreclosures, the price of houses should drop back to prebubble levels, and lenders and borrowers should suffer the consequences of their foolish, ignorant speculation.
Let’s all face reality. The federal reserve is helpless and won’t be able to fix this mess. The only thing they can do is to continue to pour money into a failed banking system and devalue the dollar. So as they continue to crush the dollar watch long term interest rates continue to rise.
All of those helpless homeowners who wanted a piece of the american dream now have a piece of the american nightmare.
A housing crisis!
A banking system crisis!
A Countrywide Crisis. Now that makes sense. Watch as countrywide falls and Bank of America backs out of the deal.
Countrywide has 26 Billion in pay option arms that cannot be refinanced because of the back end interest causing the borrower to owe more than the home is worth. Thank you Tan face for adding more misery to a devistating situation.
Who is the fed fooling? Just keep printing money and bailing out our failed banking system. This situation is going to get much worse as foreclosures continue to rise. We are only in the second inning of the game and the other team is leading 20 to nothing.
Who will throw a lifeline to Thornberg Mortgage Company? The company is close to the end.
FHA loan limits have now been increased at least until the end of 2008. The government is trying to do a behind the scenes tax payer bailout. It won’t work because you need equity to refinance. No equity then no refinance.
I cannot believe the comment the previous ‘Proud Home Owner’ made. Either the person is living in some kind of HOLE or obviously has NO understaning of anything known as BASIC COMMON SENSE. If there were LOTS of foreclosures, and everyone would suffer the consequences of their foolish, ignorant speculation, it is also VERY likely that our national economy will FAIL (thanks to people running our country and where they’ve brought us) and this so-called ‘Proud Home Owner’ could lose their job and may not, in fact, be a ‘Proud Home Owner’.
God, what barrel do they get these people out of?!!!!!!!
ok, so didn’t get on the bandwagon when it was taking off, even though I had informal offers for “liar’s loans”. I was responsible. I waited. I’ve been saving my down payment. I have no debt. My wife and I and our one year old are now getting ready to buy with a full 20% down payment.
And you want to give my tax dollars (remember, I rent, I don’t get the mortgage tax deduction) to someone who got in way over their heads, and also took out a HELOC? You’ve got to be kidding me!!! Oh, it’s just the bank’s money? Ya, like they’re a charity!
This is supposed to be a free market capitalist economy here.
No, it’s not going to be pretty. In fact it’s going to be very ugly, but this country got itself into this mess, and the longer we put off the pain, the worse it’s going to be. I know your foreclosure is going to affect my life in very negative ways. I’m not THAT selfish. But we can’t solve this by wishing it away!
the market needs some confidence placed into the system…..this is easily done when the govt buys quality backed mortgage paper…..and would say some statement that they will not allow fannie mae/freddie mac go bust. there is mistrust in even the good mortgages and this is a very bad thing becuase if there are no investors to buy the quality paper then rates will continue to go up and it will close to impossible to get a mortgage.
Thornburg is a perfect example of the hysteria that is playing out in the secondary market. …..thornburg only has high quality mortgage paper and this is not only a fact but proven when you see pimco buying a few hundred million dollars of this paper because it is trading close to 70 cents on the dollar. The major players are buying this stuff because it is on fire sale..
what is happening to thornburg should be the govt’s glaring cue to step in and buy some of the high quality mortgage paper to inject trust back into the high quality end of the mortgage market…..this action would payoff in 2 ways-
1-it will help to get investors back buying a paper mortgages which will cause rates to move down where they should be at this point.. mid 5%
2- the investment in this paper would return a tremendous amount and this return could then be used to offset the cost of whatever program that is going to be required to assist all the troubled homeowners.
if there is not some assistance to the market then the home you are saving for to buy may be cheaper than a year ago however you will pay very dearly in the rate that is offered to you. It is all tied together…there is more to it than just some foolish ignorant speculation, agreed there was a lot of that going on but remember that builders were allowing people to buy as many homes as they could sign a contract for…it was the lender guidlines that actually prevented some speculators from buying more.
the fact almost all confidence has eroded in the mortgage market means fewer buyers of that paper right now which means a higher yield is required to tempt the buyers…hence your rate will be higher than it should be when you attempt to get financing. It is critical we get some type of assistance to the market…. like yesterday or there may not be a mortgage market to provide financing to you and the others doing it the “responsible” way.
quick question-
do you have any credit cards that you ever used? Did you state your income from your w2 or the front page of your tax return under the AGI? Did you make sure to list your income after deductions?
if you happened to list your w2 income and you take any deductions then you basically have the oldest type of liar loan there is- credit card financing….and talk about predatory lending…..the credit card companies have been getting away with this type of behavior for so many years it makes the mortgage scamers look like petty theives.
The all idea is that if the government and banks don’t do anything soon, as lower the rate and the banks keep it at low rate too, banks will make some money and help the homeowners, at the same time the lenders and loss mitigation, loan modification with the approval as soon as possible (as Right Now) from servicers and banks to write the second and/or first to the actual market based on the current appraisal and modify that loan for the borrowers, many borrowers they want to stay at their home but government, lenders, don’t see the big picture here, they prefer to foreclosure their homes and write them out of their books to get more money out of the government, tax write off, etc. ( from our paid taxes)and not helping the borrowers, how many billions and billions of dollars from Investors and lenders lost and the government pumping billions of dollars into the market to keep it the flow, and thousand and thousand of borrowers walking away from their homes because the banks don’t listing they go around and around like nothing is happening? wait until your situation shift to your side then is when you will be crying for HELP! what the banks are waiting for?? just write the loans down and take them out of your books or re-write them! and help the borrowers, the investors lost their money already!, did you waiting for WHAT!?? HELP THE BORROWERS! AND KEEP THEM IN THEIR HOME SO LONG THEY CAN MAKE THE PAYMENTS AND IF NOT FIND A BUYER FOR THAT HOME and look for a home for that particular borrower that you previously foreclosure from another borrower, the banks got so many foreclosure homes in their books and more are coming!!!many short sales and banks are not answeering soon enought to save the borrowers, you guys are foreclosing homes just because you want, but many homeowners are calling you and you guys turn your back on them! NO EQUITY NO HOME! WAKE UP, Smell the low earnings( at least you guys making something, better than losing more, and help the Borrowers! So Many people lost their jobs because many business closed their doors! due to many people are trying to save money and not buying almost nothing, just the basic items and products, just look at the discount stores, like something cents , xxx mart,xxxget, xxxwill, (cheap)stores, their sales are up, because people are looking for basic items at lowest price, I would like to see Mr. xxxzilo and the other Ceo’s shopping in those stores, give the money back to the borrowers, who need help! you guys don’t reserve those millions, don’t matter what excuse you have! pulling more money out of the Federal Banks! and selling your stocks! give me a break, who is behind in all this mess?? you wonder who!$$$$
this is just something out of my chest, I just let it out, keep the economy healthy, keep our jobs, our Proud, our Families & Kids together and our Country! KEEP USA ALIVE AND STRONG!!! Let the World Know How USA can turn it’s Country Around in no time!
if any misspelling, please! just look into the meaning of this massage.
Thank you,
@gatorbait
“the fact almost all confidence has eroded in the mortgage market means fewer buyers of that paper right now which means a higher yield is required to tempt the buyers”
I’ve seen the same argument the other way. If banks are forced to forgive (either principle or rate) they’ll make up the difference with higher rates on new loans.
Rates are going up no matter what happens. Do I wait a year to see if prices drop another 20%, and risk paying another 5% in interest? Somewhere in between? Will we get the double digit rates of the 80s? Who knows.
I don’t think the market is going to turn around any time soon, and it’s going to be flat for a good long while. I’m not in a hurry. And a lot of people are going to lose their homes. And that’s sad. And a lot of people are going to lose their houses. And frankly, that’s not so sad.
http://www.signonsandiego.com/news/business/calbreath/20080309-9999-1b9dean.html
“When you goof around with a contract, you get away from the stability that investors count upon,” said T.J. Knowles, a mortgage broker at CalBrokers in San Diego. “Who in the world would invest in mortgages if they know the bank might rewrite the terms? And then banks will get more restrictive in their lending because they won’t know which investors will buy them.”
Oh, but gee, I didn’t know my house value could go DOWN!!! Real estate ALWAYS goes up, right?
As for that credit card question:
“quick question-
do you have any credit cards that you ever used? Did you state your income from your w2 or the front page of your tax return under the AGI? Did you make sure to list your income after deductions?”
Forgetting me, because I’m abnormal (don’t carry any credit card debt, never have. pay in full every month) there are two differences: Credit card debt is generally at most in the 10s of 1000s, not 100s of 1000s. Credit card companies string consumers along, and keep making money. Mortgage lenders lent money that people had no way of paying back short of winning the lottery, or refinancing out. They’re both thieves, but the mortgage lenders were dumb thieves.
Geez’s, It is not just people that got loans they could not repay, where do you live????
We lost jobs, J-O-B-S!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
We had a job when we got this loan, one week later he lost his job. Regerstered with five temp services and out of unemployment killed us. HELLO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Geez!!!!!!!!!!!!!! People lose jobs every freaking day! It’s still the number one reason people lose their homes. It’s also why they tell you to have six months to 1 year living expenses in the bank before you commit to buying the house. It also does not relieve you of the obligation to pay your debts.
HELLO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
THESE ARE ALL GOOD EXAMPLES!!!AND FACTS!!!
THE FUNNEST THING OF ALL IS I WOULD LIKE TO FIND THE REALTOR’S
BUILDERS AND OF COURSE”STRAW BUYERS” WHO WE HAVE NOT EVEN POINTED THE FINGERS AT YET!!!!!!!!!!!
WHO CREATED THE WHOLE THING “AND OF COURSE THE FEDS”
NUMBER ONE MOST IMPORTANT FACT!!!FALSE VALUE OF HOMES ACROSS THE BOARD!!
WHEN HAVE WE EVER SEEN IN HISTORY YOUR HOME GOING UP 20% TO 50% PLUS A YEAR
HISTORICAL FACT 3% TO 10% 10 IN A GREAT MARKET!!!
SO HOW IN THE HELL DID WALLSTREET EVEN BACK THE PORTFOLIO ON WALL STREET….
BAD LENDERS AND GOOD LENDERS OUT THERE IN THE GAME!!!!!
BUT DOESN’T A HOME HAVE TO START FROM A VALUE INDICATOR TO EVEN VALIDATE THAT A HOME LOAN CAN EVEN MEET GUIDELINES PRESENTED FROM THE BANK?????
THIS IS A MYSTERY ON HOW THIS WHOLE BS WAS EVEN CREATED!!!
1999,2000 AND 2001 WE WERE HEADING INTO THIS DIRECTION!!!!!!!!!!!!!!!! USA WE LOST OUR ECONOMIC POWER PERIOD!!!QUESTION PEOPLE WHAT DO WE EVEN MANUFACTURE ANYMORE??
LAST I CHECKED, EVERYTHING WE BUY AND OWN MADE OVERSEAS…
THANK YOU PRESIDENT NIXON AND THE THANK YOU PEOPLE OF THE UNITED STATES OF AMERICA FOR NOT SUPPORTING USA MADE PRODUCTS!!!!!!
BUT WHAT IT GETS WORSE THE MOST TERRIBLE USA EVENT IN HISTORY
SEPT 11TH 2001……….. WHY DID WE WAIT 2 YEARS TO RE-ACT????
GO TO WAR FOR OIL ETC AND MASK AN ECONOMIC NIGHTMARE THAT WAS BREWING!!!!
WE ARM OTHER COUNTRIES NO WHERE THE LEADERS ARE BUT YET WE CANNOT CAPTURE????HUMMMM FISHY
WE ARE VERY IGNORANT PEOPLE THE GOVERNMENT ONCE AGAIN HAS SHAMMED US AS THEY DID IN IN THE EARLY 90′S “DESERT STORM!!
THEN RECESSION
THEY GAVE MONEY AWAY TO TO HELP AN ALREADY FALLING ECONOMY!!!!!!!!!!!! SAME TIME.. LOWERED RATES TO PAY EVERYONES CREDIT CARDS THAN PEOPLE LOST HOMES THAN AS WELL
THIS TIME THEY LETS BUILDERS AND REALTORS AND LENDERS CREATE A FAKE FAKE FAKE HOUSING RUSH!!!!!!!!!!!!!!!!!!!
MAYBE THEY SHOULD OFF OPENED UP ALL THE OLD GOLDMINES HERE IN CALIFORNIA AND HAD US ALL PROSPECT!!!!!!!!!!!!!AGAIN SINCE WE ALL CAN SEE WHERE ITS GOING!!!!!!
BOTTOM LINE YOUR HOME IS SUPPOSE TO BE A NEST EGG 15 TO 30YRS DOWN THE LINE TO RETIRE:)
NOT TO MAKE 100′S AND 100′S OFF IT TO BUY RV’S CORVETTES
TRIPS ETC..
IF PEOPLE WERE DUMB ENOUGH TO LEVERAGE THEMSELVES TO THE TILT OR BUY A HOME DOUBLE WHAT THEY HAD BEFORE THEN THE ACTUALLY FACT IS THEY DO DESERVE TO LIVE IN THERE FANCY CAR OR RV THEY BOUGHT!!!
I DO FEEL SORRY FOR SO MANY HARD WORKING PEOPLE WHO WERE FIRST TIME HOME BUYERS WHO GOT TAKEN ADVANTAGE OF FROM SOME MANY REALTORS ETC….
PEOPLE THIS MAKES THE S&L SCANDAL LOOK LIKE MASHED POTATOES!!!
WATCH AFTER BUSH LEAVES HOW MANY PEOPLE GET HUNG OUT TO DRY!!
MILLIONS OF DOLLARS STASHED AND MADE!! BYE BYE TO ALL!!
HOMES NEED TO GO DOWN ANOTHER 30%
AND ALLOW ALL REAL BUYERS TO COME OUT AND PLAY:)
GOD BLESS THE UNITED STATES OF AMERICA
IT IS THE BEST PLACE IN THE WORLD BUT ALSO THE MOST F@@CKED UP AND WE ALL KNOW THIS!!!!!!!!!!!
Truly the only way to save homes is to re-negotiate the loan terms that borrowers initially signed for the home. All borrowers with adjustable rate loans should be given a fixed rate on either an interest only or prin/interest payment that is affordable to the homeowner. Anyone that purchased a home at the highest point in the market should have a loan reduction and the loan re-negotiation. Local Government should also lower the rate at which they are charging Property Taxes, because these amounts are astronomical and out of touch with what is going on in the housing market.
YourMom – you are truly a fucking idiot. I think the only way to save our future, let alone our homes, is to have fools like you “fixed” so that you can’t produce more fucking idiots.
LMAO,
My guess is that you can probably get your point across just as effectively without dropping the f-bomb.
Probably – BUT AT LEAST I DIDN’T USE ALL CAPS WHICH I FELT LIKE!!!
There is some logic in this, the problem is it cannot be applied across the board – which is why I don’t think we’re seeing it. I don’t think you can compare credit card debt to mortgage debt. Two very different animals: I also don’t think you can compare an auto loan to a home loan – different depreciation standards entirely. Nonetheless, credit card companies do often write off balances, or portions of them, either in bankruptcy or even when a debtor goes into Consumer Credit Counseling. There is also the infamous ‘charge-off’ that is an option as well. Each of these processes results in a hit to the mighty FICO score though.
The problem is, if you begin writing off mortgage balances to make current mortgages more affordable – everyone will want this as well regardless of their current affordability in their own mortgage. How do you implement a system of ‘fairness’ in this? I don’t think its possible. A short pay off – or short sale – basically accomplishes the same thing but gives the borrower the appropriate ding to their credit report and removes them from title to the property. The problem is, no one is seriously shopping for homes right now and short sales aren’t having much success accross the board. I think you will see another option with similar characteristics emerge that possibly keeps the original noteholder with title to the property – but there has to be a negitive side; especially to the credit report and the FICO score, so that not everyone finds it all that enticing.
I guess what I’m trying to say is that any reductions in principal must carry a downside risk to one’s credit to be successful. In that manner, possibly only folks who truly need the assistance will want to entertain the idea. Otherwise, how does the average Joe bring $150,000 plus cash to closing in places like SoCal, Las Vegas, and Florida? No one’s buying homes all that much right now, the inventory of homes for sale is way too high given current demand, and if some other means were available to keep folks in their homes this may just bring some stability back into the markets – assuming stability is what we’re looking for. Not a perfect solution, maybe not even remotely possible but could minimize losses in some instances.
We’ve put ourselves into a position where a mortgage is much more valuable that the collateral. At this point in many real estate markets it seems that it would make financial sense to hold onto the loan, rather than risk ending up with the collateral in the majority of cases. Just a thought.
i have a loan reset scheduled for july however i have had several late payments during 07. if my lender decides to extend the loan via a reset, do they have to stay within the 5% basis points that was promised on the original note?
Ok, I just wanted to vent, I am one of those first time home buyer that was 6 months pregnant, and my apartment was only a 1 bedroom so we thought we need to move out and expand, this was during summer 2005 “the crazy rush” to purchase homes. We were only able to afford a $150K home, but it appeared that all the homes in the price range were dumpy and in not so great area, but were snatched within hours of posting on the MLS. There we were, two months later, 8 months pregnant, and still trying to find a suitable home, we had to eventually raise our borrowing price to an uncomfortable $220K and found a fixer upper home. Well in order to afford the home, we had…yes an ARM… we poured over $8k of borrowed money from credit cards to fix the home, backyard was a disaster, kitchen was falling apart, and it wasn’t any upgrade, it was just to fix walls, doors, windows and buy appliances in working condition a little comsmetic touch up and landscaping for our child. Well a year later, husband changed job, we couldn’t sell the house for what we owed, since it still was in fixer up condtion and we had a over $16000 in penalties, if we sold, so the only way was to rent at a slight loss and try to sell before the arm would adjust and the penalties would be removed in order to afford our current home. Long story short, we went into what looked like a promising business with a friend, but it failed in the ensuing months, and husband found a full time job again to recoup the failing business, but then layed off… now we have two homes on short sale. We are good people that just happen to buy both times at the VERY wrong time. and now both homes are valued at $40K less than what we bought it for. We are now in a situation that renting would be a better option for a long while until we sort this mess out!