Comments on: Principal reductions that restore equity for the homeowner may be more effective means of avoiding delinquency and foreclosure,” Bernanke said. http://loanworkout.org/2008/03/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/ Loan Modification & Home Loan News Sun, 21 Mar 2010 21:27:00 -0700 http://wordpress.org/?v=2.9.2 hourly 1 By: TN http://loanworkout.org/2008/03/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-4659 TN Wed, 02 Apr 2008 16:47:09 +0000 http://loanworkout.org/2008/03/04/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-4659 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! 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!

]]> By: Mike http://loanworkout.org/2008/03/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10430 Mike Sun, 16 Mar 2008 16:40:15 +0000 http://loanworkout.org/2008/03/04/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10430 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? 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?

]]> By: Tom http://loanworkout.org/2008/03/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10429 Tom Sat, 15 Mar 2008 18:19:30 +0000 http://loanworkout.org/2008/03/04/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10429 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. 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.

]]> By: LMAO http://loanworkout.org/2008/03/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10428 LMAO Fri, 14 Mar 2008 20:08:31 +0000 http://loanworkout.org/2008/03/04/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10428 Probably - BUT AT LEAST I DIDN'T USE ALL CAPS WHICH I FELT LIKE!!! Probably – BUT AT LEAST I DIDN’T USE ALL CAPS WHICH I FELT LIKE!!!

]]> By: Tom http://loanworkout.org/2008/03/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10427 Tom Fri, 14 Mar 2008 03:30:00 +0000 http://loanworkout.org/2008/03/04/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10427 LMAO, My guess is that you can probably get your point across just as effectively without dropping the f-bomb. LMAO,

My guess is that you can probably get your point across just as effectively without dropping the f-bomb.

]]> By: LMAO http://loanworkout.org/2008/03/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10426 LMAO Fri, 14 Mar 2008 01:37:20 +0000 http://loanworkout.org/2008/03/04/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10426 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. 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.

]]> By: YourMom http://loanworkout.org/2008/03/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10425 YourMom Thu, 13 Mar 2008 22:22:45 +0000 http://loanworkout.org/2008/03/04/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10425 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. 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.

]]> By: wm http://loanworkout.org/2008/03/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-4658 wm Thu, 13 Mar 2008 19:35:57 +0000 http://loanworkout.org/2008/03/04/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-4658 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!!!!!!!!!!! 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!!!!!!!!!!!

]]> By: Proud Homeowner http://loanworkout.org/2008/03/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10424 Proud Homeowner Wed, 12 Mar 2008 14:20:57 +0000 http://loanworkout.org/2008/03/04/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10424 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!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 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!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

]]> By: Vikki Johnson http://loanworkout.org/2008/03/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10423 Vikki Johnson Tue, 11 Mar 2008 14:08:57 +0000 http://loanworkout.org/2008/03/04/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/#comment-10423 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’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!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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