Posted on 10/23/2007 11:56:00 AM PDT by LouAvul
Banks to customers: Drop dead!!
Nobody in the financial industry is saying that in so many words. But their actions speak volumes. While bankers have plenty of time to negotiate the terms of an $80 billion fund to rescue their own mortgage portfolios, customers are getting a busy signal if they want to fix a problem mortgage before it explodes into foreclosure or bankruptcy.
According to a Moody's (MCO, news, msgs) survey of the mortgage companies that service about 80% of all subprime mortgages, lenders have eased terms on just 1% of the subprime mortgage loans that reset to higher interest rates in January, April and July of this year. That's a huge problem, again according to Moody's, because data indicate that between 5% and 15% of subprime loans that are current before they reset will go into default after reset they if they are not modified.
And this is before the mortgage resets really hit the fan. Adjustable mortgage resets are projected to hit $55 billion in October, up from $22 billion in January, and then continue to climb until the market hits a peak of $110 billion in adjustable mortgage resets in March 2008.
In other words, without some kind of modification of the terms, we're about to see an explosion of delinquency and foreclosure rates for subprime mortgages far above the 10% rate during the housing market's boom years. And the mortgage industry is doing almost nothing to head off the problems.
(Excerpt) Read more at articles.moneycentral.msn.com ...
No one. Self rescue is the answer. There are various levels of pain involved, depending on the tactics one might choose.
Or maybe we should say, "You made your bed, now pack it up along with the rest of your stuff, and get out of the house you can longer afford to pay the mortgage on!"
Expect them to get much worse as the Presidential election approaches.
Yup refinancing with Government backed loans. What a deal for Countrywide and Paulson is making it happen.
Let’s see:
The banks have loaned a bunch of money to people who really shouldn’t have gotten loans.
The people used that money to buy houses they couldn’t really afford on variable rate mortgages.
Now the people can’t pay back the loans they shouldn’t have been given in the first place.
How much is this going to cost me? Although I generally vote Republican, this fiasco reeks of the Republican love of bankers - although I am sure there were plenty of Dem’s at bank troughs too.
Rescue? My a$$!
I’m waiting with cash to rescue their homes
at a 50%(or more) discount!
The casinos are full of people that can’t manage their
money. They just stopped at the loan office on the way.
“Who’ll rescue homeowners in the housing mess?”
One thing for certain, government should not require the responsible to bail out the irresponsible.
Better to let the irresponsible suffer and, perhaps, learn a valuable life lesson. If they were victims of fraud, use the court system to get them justice — But, if they just bit off more than they can chew, let them learn not to do that again.
The taxpayer has no responsibility here.
Not much compared to what it's going to cost you if Hillary wins. The banks only loaned their money temporarily then turned the mortgages into securities and sold much of them to foreign investors. The banks got their money back. It's the foreign investors that are going to lose the most.
The stock market bubble that led to the 1929 crash was caused in large part by no money down easy credit. After the crash a law was passed requiring people to put at least 50% down for stock they buy on credit. If now the real estate market crashes hard look for a similar anti-bubble law for real estate, probably 10% down.
They must have decided they wanted to be in the “collecting money on a loan” business instead of the “trying to sell a bunch of REO houses in a depressed market” business.
.. and now they will have to dig themselves out.. not the govt or tax payers.”
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As it should be.
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