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Firms are getting billions, but homeowners still in trouble
McClatchy Via Yahoo News ^ | Sun Oct 4, 2009 | Chris Adams, McClatchy Newspapers Chris Adams, Mcclatchy Newspapers

Posted on 10/04/2009 5:59:09 PM PDT by underthestreetlite

WASHINGTON — The federal government is engaged in a massive mortgage modification program that's on track to send billions in tax dollars to many of the very companies that judges or regulators have cited in recent years for abusive mortgage practices.

The firms, called mortgage servicers, have been cited for badgering, manipulating or lying to their customers; sticking them with bogus fees, or improperly foreclosing on them.

Mortgage servicers are the middlemen between homeowners and the investors that hold their mortgages, collecting homeowners' checks and disbursing payments for the mortgages, property tax and insurance. They're a necessary player for any modification.

The reliance on such companies points to an ironic paradox for federal regulators: Cleaning up the nation's financial crisis often rewards the firms that helped create the mess. Those Wall Street banks and mortgage servicing companies argue that they're best positioned to repair the damage they've helped cause. In the case of the mortgage program, the firms getting the taxpayers' money are, after all, the firms that control the troubled mortgages.

To make matters worse, the Government Accountability Office , Congress' watchdog, has said that the Treasury Department hasn't done enough to oversee the companies participating in what's known as the Home Affordable Modification Program, which emerged from the bank bailout bill Congress passed last fall.

(Excerpt) Read more at news.yahoo.com ...


TOPICS: News/Current Events
KEYWORDS: debt; finance; foreclosures; hamp; homeowner; modifications; mortgage

1 posted on 10/04/2009 5:59:09 PM PDT by underthestreetlite
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To: underthestreetlite

Duplicate (and garbage).


2 posted on 10/04/2009 6:02:22 PM PDT by TopQuark
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To: underthestreetlite

Home Affordable Modification Program is in fact a good program for those people who may be in need for help. This is not a handout - this is not a welfare program - this is not a bailout - the program does none of that. It actually helps the homeowners renegotiate the terms of the loan. So, for those homeowners who are facing tough economic times, this may be a good thing to look into. Check this:

http://makinghomeaffordable.ueuo.com/


3 posted on 10/04/2009 6:02:52 PM PDT by RaptorY22
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To: RaptorY22

Every one of them should be thrown out on the street!

Loan modification is criminal theft from everyone that ever paid a cent in taxes!


4 posted on 10/04/2009 6:04:55 PM PDT by dalereed
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To: RaptorY22

And smaller banks are being forced to declare bad loans as losses by this ‘Administration.’ Thus are banks not being responsive and must be closed or taken over by the Feds.


5 posted on 10/04/2009 6:07:12 PM PDT by combat_boots (The Lion of Judah cometh. Hallelujah. Gloria Patri, Filio et Spirito Sancto.)
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To: combat_boots

if homeowners can get better loans then why are banks failing? are lending firms and banks different? does re finance get banks their money/ WHAT KIND OF LOANS ARE FAILING BANKs?


6 posted on 10/04/2009 6:12:51 PM PDT by dalebert
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To: dalereed

“Loan modification is criminal theft from everyone that ever paid a cent in taxes!”

Do you have ANY idea what you are talking about? No? didn’t think so.


7 posted on 10/04/2009 6:13:43 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: RaptorY22
Home Affordable Modification Program is in fact a good program for those people who may be in need for help.

Although I think some individuals can benefit from this in the long run with minimal cost to the rest of us, I see much potential for corruption and abuse of these 'loan modifications.' Basically when renegotiating a new mortgage, it's the same thing as buying the house again. Since each new mortgage pays off several parties including Mortage brokers, Appraisers, Inspectors and whoever else has their hand in the transaction, you will certainly have parties that behave in a leeching manner. Some of these companies are already advertising on TV and on radio in my area.

It is also apparent that many of the people asking for modifications aren't receiving them because, despite the need to renegotiate to better terms for long-term stability, they are being rejected because they aren't currently behind on any payments.

In this manner, many people in need are being turned down in favor of more 'irresponsible' types who are then defaulting on their modifications in huge numbers 6-12 months after they receive them. Others who lied about their income on their previous mortgage are also being turned down for modification because the new process requires verification of income they obviously don't have. I, of course, find it impossible to feel sorry for these people who took advantage of these 'LIAR LOANS.'

This program may help some people who deserve it, but overall it is nothing more than a typical government boondoggle. It favors certain groups over others and isn't fair to those of us who made our payments and were responsible, especially since we can't get a 'sweetheart deal' out of the situation like the irresponsible types.
8 posted on 10/04/2009 6:22:16 PM PDT by lmr (God punishes Conservatives by making them argue with fools.)
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To: dalereed
You Wrote: Loan modification is criminal theft from everyone that ever paid a cent in taxes!

How is renegotiating the terms of a loan criminal theft from tax payers?

If my income had gone down due to employment dislocation, I would be glad if I was able to renegotiate my loan ... I won't be stealing from the bank - It would be a renegotiating of terms.

And the banks would only agree to renegotiate if they believed that this would help their bottomline. Would they not prefer to renegotiate than deal with another foreclosure!

9 posted on 10/04/2009 6:22:35 PM PDT by RaptorY22
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To: lmr

Point Well Taken.


10 posted on 10/04/2009 6:23:38 PM PDT by RaptorY22
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To: lmr

Life isn’t fair. Its in the banks best interest to modify the loan if they can rather than foreclose in a market already overrun with foreclosed homes.

If you made your payments on time then you didnt take the hit on your credit.


11 posted on 10/04/2009 6:35:18 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: driftdiver

Those people signed an agreement and should he held to it!

Most of them didn’t put down anywhere close to 20% and shouldn’t have been allowed to purchase in the first place.

Since they did agree to pay their mortgage and didn’t they should be thrown out in the street!


12 posted on 10/04/2009 6:39:13 PM PDT by dalereed
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To: RaptorY22

“How is renegotiating the terms of a loan criminal theft from tax payers?”

If they lower the principle it’s theft from me as a depositor, if they lower the interest it is lowering the return on my money in the bank!

The bank uses my deposits, CDs, and money market money to multiply the amount they can loan and my income is predicated on the return to the bank!

Any bastrard that doesn’t live up to the total agreement of the loan is stealing from me!


13 posted on 10/04/2009 6:44:35 PM PDT by dalereed
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To: dalereed

“Those people signed an agreement and should he held to it!”

Thats kinda up to the bank isn’t it.

“Most of them didn’t put down anywhere close to 20% and shouldn’t have been allowed to purchase in the first place”

Oh so you’re the king of the world now. Again, thats up to the bank. If the bank chose to make a business decision they should be accountable for that decision, gather the risk as well as the reward. Unless you or I are a stockholder than we have no say.

“Since they did agree to pay their mortgage and didn’t they should be thrown out in the street!”

yes you Majesty!!! again, thats up to the bank.

On the broader scale its MUCH better for society for people to stay in homes. Here in Florida the foreclosure rate is very high. Some neighborhoods have 10% of the homes in one stage of foreclosure. Thats 10% of the homes that are not being cared for, tall grass, stagnant swimming pools. Oh yeah they are also crime magnets.

What would you do with the millions of homeless families that would otherwise be out on the street? Would you laugh at them and throw stuff at them?


14 posted on 10/04/2009 6:45:09 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: dalereed

“If they lower the principle it’s theft from me as a depositor, if they lower the interest it is lowering the return on my money in the bank!”

Are you really that ignorant of the banking system? Did your balance go down? Did they reduce the rate on your CDs?

Foreclosing on a property results in a much greater financial loss to the bank.

“Any bastrard that doesn’t live up to the total agreement of the loan is stealing from me!”

yes and its all about you.


15 posted on 10/04/2009 6:47:16 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: driftdiver
Life isn’t fair. Its in the banks best interest to modify the loan if they can rather than foreclose in a market already overrun with foreclosed homes.

Well then, it's nothing more than another bailout for banks?

No thanks.

These are the same institutions who with government's blessing gave us the financial crisis. I say let them fail and give up the doomsday scenarios. Let the market sort itself out and do away with propping up Zombie banks at extreme cost to our children and grandchildren. Let those institutions sink or swim on their own and let those that win and survive enjoy the spoils.

Would that be painful for you?

I am certain it would be painful for quite a few people, but I've always said a little pain now is going to save a lot of pain later and we might actually learn something in the process. The solution is not to keep doing what we are doing. People need to get a grip and quit expecting government to solve everything. Government has never solved anything and they won't solve this. I need only to point to Japan to give everyone an idea of what's in store for us.

Either we get our act together soon, or it's GAME OVER.
16 posted on 10/04/2009 6:54:32 PM PDT by lmr (God punishes Conservatives by making them argue with fools.)
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To: driftdiver

“yes and its all about you.”

I sure don’t give a rats ass about anyone else!

Especially anyone that doesn’t pay their obligations 100%!

And no I don’t believe in bankruptcy!

When my corporation was losing money I pur over $250k out of savings into it before I closed it after 57 years in business so that every bill was paid in full before I closed it.


17 posted on 10/04/2009 6:57:19 PM PDT by dalereed
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To: lmr

What the heck are you talking about. Loan modifications and bailouts are not connected. TARP monies did NOT go to the loan modification programs. Largely its not the banks decision to modify the loan since in many cases they’ve sold the loan are only the servicer.

Let them sink or swim on their own. Let them enjoy the risks as well as the rewards. Unless you own a bank then you have NO say whether they modify a loan.


18 posted on 10/04/2009 6:57:40 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: dalereed

“I sure don’t give a rats ass about anyone else!”

Thats obvious

“And no I don’t believe in bankruptcy!’

Good for you, I bet you believe in debtors prison though. Fortunately the rest of America believes society is better off when people can have an opportunity to start fresh financially. Since this isn’t really your kingdom but a republic the opinions of other people do count.

“When my corporation was losing money I pur over $250k out of savings into it before I closed it after 57 years in business so that every bill was paid in full before I closed it.”

You sound bitter about it, buy why shouldn’t you have done that. If you had that much money in the bank it would have been better to pay those bills off before you were forced to close the business. Carrying debt is not a good thing for business or personal.


19 posted on 10/04/2009 7:00:47 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: driftdiver
yes and its all about you.

From your posts, it seems its all about the banks.

Foreclosures and Bank Bailouts don't happen in a vacuum. These cost us all money in bigger deficits and amount to Generational Theft, stealing from our children and their children.

You spoke of a high societal cost of foreclosure, but you advocate something that has a high societal cost as the solution?

Hypocrite.


20 posted on 10/04/2009 7:00:57 PM PDT by lmr (God punishes Conservatives by making them argue with fools.)
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To: lmr

“From your posts, it seems its all about the banks.”

Nope, I think large multinational banks are the root of all evil (or most of it) in the world. They’ve twisted regulations and laws so far in their favor its unbelievable.

“Foreclosures and Bank Bailouts don’t happen in a vacuum.”

Foreclosures cost the investors, and they are the only people who should have a say in what happens to the loan.

Bank bailouts are not connected to foreclosures. They were more about establishing govt control of the financial industry than anything else. aka nationalization

‘You spoke of a high societal cost of foreclosure, but you advocate something that has a high societal cost as the solution?”

Im not advocating bank bail outs you twit. Banks should sink or swim on their own. So take your ignorant insults and jump in a lake.


21 posted on 10/04/2009 7:07:22 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: driftdiver

” If you had that much money in the bank it would have been better to pay those bills off before you were forced to close the business.”

I wasn’t forced to close it, it became unprofitable because of thr Tax Simplification Sct od 1985 signed by Reagan and the movement of illegal aliens into the commercial construction business.

In it’s 57 years the business never borrowed a cent and never was late in paying a bill and I used personal funds to make sure that it didn’t in it’s last two years of losing money.

I could care less about a credit rating because I never borrowed for anything but my first home and never will.

My rating can’t be too bad since I have a credit card with a $30k limit.


22 posted on 10/04/2009 7:07:53 PM PDT by dalereed
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To: driftdiver
What the heck are you talking about. Loan modifications and bailouts are not connected.

I didn't say they were connected. You said this:

Life isn’t fair. Its in the banks best interest to modify the loan if they can rather than foreclose in a market already overrun with foreclosed homes.

I found it astounding that you would advocate Loan modification as being in the interest of Banks, which makes it nothing more than another Bank Bailout from your own words, not mine.

You also seem to think that life shouldn't be fair for anyone except the banks. Why do you think the banks deserve a break and not those that are picking up the tab for all this? It's a reasonable question. Taxpayers can't complain about getting screwed because 'life isn't fair?'

Give me a break.

Loan modification is nothing more than another government boondoggle, which although unrelated to TARP, will not give very many who deserve it any benefit, but just like TARP, it will have high cost for the rest of us.

Yeah, sure, it might save a few banks, but it does ultimately at our expense.
23 posted on 10/04/2009 7:12:50 PM PDT by lmr (God punishes Conservatives by making them argue with fools.)
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To: driftdiver
I've merely stated that Loan Modification is something we shouldn't be doing because it has a high cost with very little benefit.

You are the one trying to portray it as a bailout, not me. You are also the one spending time defending banks and telling taxpayers that 'life isn't fair'

Your comments make you look like an ass. Congratulations on your ignorance. You do a great job of it.
24 posted on 10/04/2009 7:15:49 PM PDT by lmr (God punishes Conservatives by making them argue with fools.)
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To: lmr

“I found it astounding that you would advocate Loan modification as being in the interest of Banks, which makes it nothing more than another Bank Bailout from your own words, not mine.”

Nonsense, loan modifications are paid for by the bank. not the taxpayer.

Bailout is normally used when taxpayers are paying the bill.

“You also seem to think that life shouldn’t be fair for anyone except the banks. “

get over yourself, this thread has gotten silly.


25 posted on 10/04/2009 7:17:07 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: driftdiver; dalereed

“Most of them didn’t put down anywhere close to 20% and shouldn’t have been allowed to purchase in the first place”

Oh so you’re the king of the world now. Again, thats up to the bank. If the bank chose to make a business decision they should be accountable for that decision, gather the risk as well as the reward. Unless you or I are a stockholder than we have no say.

~~~~ ~~~~

Just as an aside and not taking sides - millions of homeowners paid 5% or less down for decades and the majority never a problem with defaults on their loans.

IIRC, the advice since the 50s for first time buyers with the necessary income was to put as little money down as possible unless you planned on retiring and dying in the place.

Today, people cannot unload their homes because the banks now require 20% down. And on the other side, people with the income to buy cannot come up with 20% cash down.

So home sellers and buyers are at a stand still for at least the next 2 or 3 years until the feds ease up the down payment requirements. And people needing to move because of a job cannot, or have to leave a house empty.


26 posted on 10/04/2009 7:18:22 PM PDT by Sparko ("Barack Hussein Obama He said Red, Yellow, Black or White All are equal in His sight. Mmm, mmm, mmm")
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To: driftdiver

One more thing, foreclosures and our financial crisis are not distantly related. Shame on you for suggesting otherwise.


27 posted on 10/04/2009 7:19:33 PM PDT by lmr (God punishes Conservatives by making them argue with fools.)
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To: Sparko

I had to leave a house empty and continued making payments.

Had breakins, stolen pool pump etc.

Finally got to closing but the banks were completely unresponsive. Utterly and completely unable to respond to standard questions, requests, or requirements to close.


28 posted on 10/04/2009 7:21:30 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: lmr

“One more thing, foreclosures and our financial crisis are not distantly related. Shame on you for suggesting otherwise.”

Can you read? I never said they were related. I said the foreclosures and bailouts were not connected. The bailouts were were about nationalizing the financial sector. It appears to have been less successful than BO hoped.


29 posted on 10/04/2009 7:24:21 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: Sparko

“Today, people cannot unload their homes because the banks now require 20% down”

When we bought our home in 66 you had to put down 30% or better and the payment, insurance, and taxes couldn’t excede more than 32% of your net income.

That’s exactly how it should be today or any time.

When I was making $3.25/hr.we saved $8k in 7 years and when my wages went up to $3.75/hr we were able to buy our home for $34k in 66 with $7k down.


30 posted on 10/04/2009 7:24:26 PM PDT by dalereed
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To: driftdiver
get over yourself, this thread has gotten silly.

It was you that started the name-calling, not me and only because of simple difference of opinion. You didn't like what I said and you got angry. If anyone is responsible for the thread getting silly, it's you and it's also you that needs to get over yourself and quit acting like you know everything.


31 posted on 10/04/2009 7:24:57 PM PDT by lmr (God punishes Conservatives by making them argue with fools.)
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To: Sparko

How many financial advisors have told people NOT to pay their mortgage off. For many years that was the prevailing wisdom.


32 posted on 10/04/2009 7:27:50 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: driftdiver
What upset me was the audacity of suggesting that no one had a right to complain about this government boondoggle because 'life isn't fair.'

Everything else, I've gotten over.
33 posted on 10/04/2009 7:31:56 PM PDT by lmr (God punishes Conservatives by making them argue with fools.)
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To: lmr

You don’t seem to understand what I write. Instead choosing to find your own meaning in words that are not there.

So I’ll stop trying to communicate with you.

And yes I do know something about the financial sector, since I’ve done a LOT of work with them.


34 posted on 10/04/2009 7:32:40 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: lmr

‘What upset me was the audacity of suggesting that no one had a right to complain about this government boondoggle because ‘life isn’t fair.’”

Complain about the bailout all you want.

Unless you are an investor or stockholder in a bank then why should they care what you or I think about a private business transaction?

You were complaining that people who got behind in their payments were getting special treatment from the banks. You expected them to have some negative consequences. They do, their credit rating is damaged when they are late.

If you haven’t been late then your credit rating hasn’t been damaged.


35 posted on 10/04/2009 7:36:04 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: driftdiver

Take a look at this map.

http://money.cnn.com/news/storysupplement/economy/gapmap/index.htm

Easy to see how states compare on unemployment rates and foreclosures. A state like Oregon has low foreclosures but high unemployment. Check out Nebraska for a healthy (think farm commodities) state


36 posted on 10/04/2009 7:37:05 PM PDT by dennisw (Take alook at)
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To: driftdiver
So I’ll stop trying to communicate with you.

I understand you fine. Your opinion is that loan modification is a good thing because you think it cuts down on foreclosures which is in the bank's best interest. I simply disagree and see it as another rapacious, corrupt and ineffective government program that robs taxpayers. You behave in an arrogant manner when people disagree with you. You haven't shown me any credentials so your opinions have the same weight as mine.

I am not trying to win an argument here on the internet because that's pointless.I just think we need to put the brakes on and quit doing what we've been doing if we want our country back.

Have a nice day.
37 posted on 10/04/2009 7:37:44 PM PDT by lmr (God punishes Conservatives by making them argue with fools.)
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To: driftdiver

Loan modification is not a ‘private business transaction’ when taxpayer funds are involved. This is a taxpayer-funded program, you dolt.

Again, it is you that suggested this was good for banks, not me. I didn’t suggest it was a bailout. I obviously understand TARP is a separate issue. This has become nothing more than a Strawman at this point. I’m past that. I broke it down to you in the last post.


38 posted on 10/04/2009 7:40:06 PM PDT by lmr (God punishes Conservatives by making them argue with fools.)
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To: dennisw

In Florida the banks were working with investors. People were rolling over houses in a matter of months. Some homes appreciated 20% from contract to closing. If you moved here and wanted a home you had to make an offer immediately. Because people were literally lined up behind you to make offers. Forget renting an apartment because they are all full.

Banks were making a killing and encouraged the activities.

The homes stopped appreciating and all the investors stopped buying. People who owned 5-6 homes for investments simply walked away. That was the first round.

Then there are the people who have lost their jobs or forced to move for a job. They cannot sell their home anywhere close to what they owe. Largely because values dropped 50% in some markets. Bank owned properties further depressed the market making it even more difficult to sell.

Not to far from me are beachfront homes that were selling for $2 million less than 3 years ago. Today some of them are being sold for $600k.


39 posted on 10/04/2009 7:45:45 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: driftdiver

One more thing, if people can’t make their payments because of their own irresponsible behavior, they should lose their homes. At this point, many of them could give a rodent’s posterior what their credit looks like.

Expecting people to be responsible for themselves is what Conservatism is all about. It doesn’t matter what the bank does privately, that’s just good philosophy in life. I naturally accept what I can’t control, it’s stupid when someone suggests, otherwise. It still doesn’t mean I’m not entitled to complain, as you suggested.

I always said that this program would help a few deserving people, but it won’t be enough and the cost of doing that will be too high.


40 posted on 10/04/2009 7:48:35 PM PDT by lmr (God punishes Conservatives by making them argue with fools.)
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To: driftdiver
In Florida the banks were working with investors. People were rolling over houses in a matter of months. Some homes appreciated 20% from contract to closing. If you moved here and wanted a home you had to make an offer immediately. Because people were literally lined up behind you to make offers. Forget renting an apartment because they are all full.

What were the years when this was going on and when was the peak? I would say the peak was summer 2005. So that makes 4 years of decline

Banks were making a killing and encouraged the activities.

The homes stopped appreciating and all the investors stopped buying. People who owned 5-6 homes for investments simply walked away. That was the first round.

They walked away and what? They were never prosecuted but did they have to declare bankruptcy? I'll bet many avoided that and kept all ill gotten gains

41 posted on 10/04/2009 7:58:36 PM PDT by dennisw (Take alook at)
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To: lmr

“One more thing, if people can’t make their payments because of their own irresponsible behavior, they should lose their homes”

Is losing your job irresponsible? Why should your opinion be considered on a private business transaction of which you are not a party? Not everyone in this situation is there because they were irresponsible. Perhaps you haven’t noticed the unemployment rate recently.

“I always said that this program would help a few deserving people, but it won’t be enough and the cost of doing that will be too high.”

What cost? All they are doing in most cases is renegotiating the contracts. They are taking the amount the person is behind and adding it to the back of the loan. All fees, taxes, interest, and penalties are in there.

Other than the cost of a bunch of govt employees acting like they are doing something the only cost is to the bank and its investors.

But lets consider the costs of foreclosure. A foreclosed home will bring in 60-70% of any other home. Of course there are so many foreclosures they drive the rest of the home prices down. So the house sits empty for 6 months. Meanwhile its not maintained and becomes an eyesore. Then criminals move in and start stealing stuff. Of course the cops don’t care because its bank owned.

So now the value is down even more. So how does foreclosing save money or provide a bigger return for the bank?


42 posted on 10/04/2009 7:59:59 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: dennisw

“They walked away and what? They were never prosecuted but did they have to declare bankruptcy? I’ll bet many avoided that and kept all ill gotten gains “

They walked away, some declared bankruptcy but I know several that did not.

They didn’t really have any ill gotten gains. All the “money” was in the house they walked away from.

Another case of a guy who owned his home outright. He borrowed $750k against it, built a new house with the cash. Walked away from the first home and into the second.


43 posted on 10/04/2009 8:02:21 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: driftdiver

I have read plenty of stories of people who bought several houses and got mortgages above the sale price. So they got $300,000 cash out of all these deals/ They intended to spend it on contractors improving the house. But never followed through due to greed and “struck it rich” attitude

So they walk away from multiple house deals that go bust in a declining market but still win $300,000 free cash. The system in California and Florida, Nevada, Arizona is too overburdened to go after them. But is functional enough to foreclose and evict people


44 posted on 10/04/2009 8:15:34 PM PDT by dennisw (Take alook at)
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To: driftdiver

Does losing a job qualify as ‘irresponsible behavior’?

Nope.

I said ‘irresponsible behavior’, that means hardship is not included.

I also raised the point that many of these loan modifications are being defaulted on within 6-12 months. Does that help the bank? Nope. Does that help us? Nope. If the government guarantees the note, who picks up the tab? That’s right! US.

Check this out, 75 percent re-default?:

http://realconcepts.blogspot.com/2009/05/fitz-ratings-report-loan-modification.html

This guy sources his info real well, btw.


45 posted on 10/04/2009 8:26:28 PM PDT by lmr (God punishes Conservatives by making them argue with fools.)
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To: dennisw

For the most part those people don’t live in the homes.


46 posted on 10/04/2009 8:45:15 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: dalereed; driftdiver
I wrote: “Today, people cannot unload their homes because the banks now require 20% down”

dalereed wrote: "When we bought our home in 66 you had to put down 30% or better and the payment, insurance, and taxes couldn’t excede more than 32% of your net income."

"That’s exactly how it should be today or any time..

"When I was making $3.25/hr.we saved $8k in 7 years and when my wages went up to $3.75/hr we were able to buy our home for $34k in 66 with $7k down."

Thanks for the experience story, dalereed. The first requirement (30% down) may then have been dependent upon the area. It certainly was not true based on my experience where I lived.

And you are correct, some variant of the second requirement has always been a rule of thumb: 2 and 1/2 your gross, or 3 times your income

I agree with you, those with skin in the game are less likely to walk out - and the fact that you saved more than one year of income in seven years is testimony to goal setting and thriftiness.

But many (millions?) successfully bought and stayed or sold houses that they acquired with 5% down or less during the 60s, 70s, 80s, 90s.

With anything, a few spoiled it. Congress and lobbyists, lending institutions, and social engineers trying to get people into houses that they could not afford to pay the monthly PITI over time did the rest.

As an aside, if you had saved $8k in 1966 and lived in the south, you could have paid for half of a starter home with ease as they were running $15 - $20K in some parts.

47 posted on 10/05/2009 4:46:41 AM PDT by Sparko ("Barack Hussein Obama He said Red, Yellow, Black or White All are equal in His sight. Mmm, mmm, mmm")
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