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 ...
“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.
” 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.
“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.
“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.
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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.
One more thing, foreclosures and our financial crisis are not distantly related. Shame on you for suggesting otherwise.
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.
“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.
“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.
How many financial advisors have told people NOT to pay their mortgage off. For many years that was the prevailing wisdom.
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.
‘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.
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
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.
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.
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.
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