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Subscribe to RSSHousing finance chief blocked plan to reduce mortgage principal, congressmen say
Rick Bowmer / AP
An auction sign in front of a home, in Salem, Ore.
Updated Tuesday at 5:15 p.m. ET: A top U.S. housing regulator failed to implement a plan to cut loan principal balances for millions of underwater homeowners even though a pilot program showed two years ago it could save taxpayers money, two House Democrats said Tuesday.
Edward DeMarco, acting director of the Federal Housing Finance Agency, which oversees mortgage giant Fannie Mae, "apparently ha(s) been withholding from Congress" documents showing the potential benefits of the program to taxpayers and homeowners, according to Reps. Elijah Cummins of Maryland and John Tierney of Massachusetts. The two Democrats, in a letter to DeMarco that was released to msnbc.com, said they obtained the documents from an independent source.
Cummins and Tierney cited internal documents at government-controlled Fannie Mae describing the pilot program with Citibank, beginning in 2009, that showed that “principal reduction programs have enormous potential to save U.S. taxpayers significant amounts of money.”
Late Tuesday, Demarco responded by saying that the pilot program was ended largely due to "operational concerns" and that "there was not full agreement to proceed" with the program at Fannie Mae and Freddie Mac.
(This story has been updated to reflect DeMarco's response.)
Since last fall, DeMarco has resisted pressure to reduce principal balances on underwater mortgages despite calls from more than 100 members of Congress, who have argued that the action could help reduce taxpayer losses on government-owned loans and keep more families in their homes. So far the government has spent more than $160 billion in taxpayer funds to prop up Fannie Mae and sister agency Freddie Mac.
DeMarco's resistance to the idea is based on his "philosophical" opposition to reducing the amount a homeowner owes, according to a former Fannie Mae official quoted in the letter.
The collapse of the housing market in 2006 has erased some $7 trillion of equity from the value of American homes and left roughly 11 million homeowners underwater, meaning they owe their lender more than their home is worth.
Those homeowners, effectively unable to sell their homes, are locked out of the housing market and sidelined from creating the buying demand needed to support any housing recovery. Five years into the housing recession, they’re also more likely to consider walking away from their mortgage, adding to the backlog of foreclosures that could further depress home prices, forcing more households underwater.
To help stabilize the housing market, proponents of principal reduction argue that homeowners and lenders are better off avoiding those defaults and foreclosures.
According to the letter sent to DeMarco, those proponents include Fannie Mae officials who were favorably impressed with the results of the Citibank pilot program.
In a December 2009 review, Fannie Mae officials estimated that the pilot program of cutting loan balances would cost about $1.7 million to implement and generate potential taxpayer savings of more than $410 million. That review estimated that "more than half of Fannie Mae customers will see some benefit from the program" within six months.
According to a November 2009 presentation to Fannie Mae's risk analysts, redefault rates on loans given principal reductions in the trial program were "far below rates on other modification portfolios," according to the letter from Cummins and Tierney.
But the program was suspended in July 2010, without explanation, according to the letter. In November 2010, Fannie Mae officials continued to press internally for principal reductions. To make their case, they prepared a research paper that concluded that "Fannie Mae might reduce its losses substantially in many cases by writing down principal." The paper said Fannie Mae losses resulting from foreclosures following default were "large multiples of the amounts by which the loans were underwater," according to the documents cited in the letter.
In response to congressional pressure, DeMarco agreed to review the agency’s opposition to cutting principal balances on Fannie Mae and Freddie Mac mortgages. Last month, in a speech at the Brookings Institution in Washington, DeMarco outlined some of the reasons for his opposition to the policy.
“Most Americans that are underwater on their mortgage realize they've signed a contract -- they’ve got an obligation to make that payment and in fact they are," DeMarco said. Those underwater homeowners should be encouraged to continue doing so, he added.
But other government officials argue that by cutting principal or deferring a portion of the balance until a home is sold, some defaults could be prevented, thereby reducing losses and foreclosures. The recent mortgage settlement among 49 states, several federal agencies and five large banks aims to promote the practice by providing those lenders with financial incentives to cut loan balances.
"There is increasing data available, we believe, that shows that ... principal reduction can be good not only for homeowners and communities, but for investors as well," Shaun Donovan, secretary of Housing and Urban Development, told a Senate panel this year. "It can allow people to pay [their bills], stay in their homes and increase the value of those mortgages."
In his Brookings speech, DeMarco repeated his philosophical concerns - an argument also known as "moral hazard" - that offering principal reduction to some homeowners could prompt others who are current on their loans to ask to have their loan balances cut.
“The far larger group of underwater borrowers who today have remained faithful to paying their mortgage obligations are the much greater contingent risk to housing markets and to taxpayers,” DeMarco said.
Philosophical arguments aside, investors holding underwater mortgages have found that, in some cases, they can reduce losses by cutting principal balances.
“Private lenders are doing it for an increasing share of their (mortgage portfolios) when it makes sense,” Andrew Jakabovics, a research director at Enterprise Community Partners, told reporters in a panel discussion following DeMarco’s Brookings speech. “If (Fannie and Freddie) aren’t willing to do it, there are plenty of investors who are buying these notes because economically it makes a lot of sense.”
The White House also has encouraged Fannie and Freddie to include principal reduction as part of their mortgage relief efforts.
The debate took a bizarre twist last month when FHFA's inspector general, who is charged with detecting "fraud, waste and abuse" in the agencies, reported that Freddie Mac alone could save taxpayers “significant” sums of money if it pressed the companies servicing its mortgages to modify more loans. But the amounts to be saved were blacked out at the insistence of FHFA "and/or" Freddie Mac, according to the report.
In his Brookings speech, DeMarco said FHFA would soon complete its review and promised to have an answer within a few weeks. FHFA has now backed away from that timeline and would not provide a date for a decision.
“FHFA continues to work on its principal forgiveness analysis and is in discussions with the Department of the Treasury,” a spokeswoman said Monday. “A final determination ... is being deferred until we conclude these activities.”
FHFA was created by the Bush administration to oversee the bailout of Fannie Mae and Freddie Mac, government-chartered entities that collapsed under the weight of defaulting loans following the housing collapse. DeMarco was named acting head of the agency about a year later when his Bush-appointed predecessor stepped down.
In December 2010, President Barack Obama’s nomination to replace DeMarco, former North Carolina banking commissioner Joseph Smith, was approved by the Senate Banking Committee, with three Republican crossing the aisle to support the appointment. But the nomination was blocked by Republicans on the Senate floor, in part because they felt Smith would be too generous in support of homeowners seeking to modify loans held by the government
"He will be a tool of the administration, cutting mortgages, throwing the bill to the taxpayers," Sen. Richard C. Shelby, R-Ala., ranking member of the Banking Committee, told reporters following Smith’s confirmation hearing.
Smith was recently appointed to monitor the compliance of five large banks with the terms of the state-federal settlement over fraudulent and abusive mortgage foreclosure practices.
Discuss this post
A top U.S. housing regulator failed to implement a plan to cut loan principal balances for millions of underwater homeowners even though a pilot program showed two years ago it could save taxpayers money, two House Democrats said Tuesday.You are creating moral hazard if you touch principal.
Cut interest to 0% on these people's homes...in fact cut it down for everyone to 1-2%. That money is imaginary anyway from the banks and is being loaned to them for free from the FED.
These individuals need to pay off their homes that they took a risk on. But we can help them by cutting INTEREST, not principal. If you touch principal then you are rewarding bad decision making. These individuals still should have to pay off their home...it's a risk to buy anything.
- 95 votes
I concur. Refi the homes at a lower interest but leave principal in tact.
I'm not underwater. Where's my reward for doing the right thing? Oh that's right, I get to keep paying my mortgage and keep my mouth shut, that's my reward.
I'm not underwater. Where's my reward for doing the right thing? Oh that's right, I get to keep paying my mortgage and keep my mouth shut, that's my reward.
- 77 votes
There are all kinds of groups that get benefits that others do not.
I, for instance, pay taxes; GE does not. I don't get any subsidies like
the oil companies. I don't get to benefit from insider trading like
congresspeople do.
Those congresspeople, by the way, who are so concerned about the "principle" of thing but who see no problems with enriching their portfolios with insider knowledge or taking bribes from banks & corporations to create anti-constituent legislation.
Those congresspeople, by the way, who are so concerned about the "principle" of thing but who see no problems with enriching their portfolios with insider knowledge or taking bribes from banks & corporations to create anti-constituent legislation.
But the nomination was blocked by Republicans on the Senate floor, in part because they felt Smith would be too generous in support of homeowners seeking to modify loans held by the governmentYour comment is the same as these Republicans. "Sorry, we can't help people, the only 'people' we can help are the banks and corporations for whom we can use taxpayer money for bailouts after they commit criminal acts that cause the disarray that throws people out of jobs and crashes the market and makes it difficult for people to carry on.
- 70 votes
First,
what home owner in their right mind wants to purchase a home for more
money than it is worth...hence the need to adjust the principal of the
loan to market value. Refinancing without the principal reduction is a
win-loose proposition. Foreclosures have a significant impact on the
local community not just the previous home owner. If your neighborhood
is rife with boarded up homes your property is worthless. It is in the
best interests of the lender, the home owner and the community to do
both adjust the principal and the interest rate to keep the homeowner in
the home.
Lenders are still using demographics not just creditworthiness to qualify people for loans. If your neighborhood has been hit hard by foreclosures you'll find it difficult to find an affordable loan. We the people own Freddie and Fannie and IMHO they should not be given a choice.
Lenders are still using demographics not just creditworthiness to qualify people for loans. If your neighborhood has been hit hard by foreclosures you'll find it difficult to find an affordable loan. We the people own Freddie and Fannie and IMHO they should not be given a choice.
- 43 votes
Comment collapsed by the community
I am sorry. The moral hazard is vastly overblown. You are speaking without thinking again.
The people in this circumstance are unlikely to have adequate credit anymore to risk this hazard. This will save EVERYBODY money. LOSSES ARE REDUCED BY A FACTOR OF TEN AT LEAST.
Think! Instead of losing TEN DOLLARS (as TAXPAYERS, NOT as MORTGAGE HOLDERS), we only lose ONE.
AND the housing market improves and people are not out on the street.
The GOP is STUPID. Stimulus SAVES MONEY. Keeping people in their homes SAVES MONEY.
Moral hazard be DAMNED. SAVE THE ECONOMY.
Too bad the GOP is more interested in getting ELECTED than saving the UNITED STATES.
Huh. SCREWING THE COUNTRY for PERSONAL GAIN is TREASON.
You know what we do to TRAITORS in WARTIME, now, don't you?
The people in this circumstance are unlikely to have adequate credit anymore to risk this hazard. This will save EVERYBODY money. LOSSES ARE REDUCED BY A FACTOR OF TEN AT LEAST.
Think! Instead of losing TEN DOLLARS (as TAXPAYERS, NOT as MORTGAGE HOLDERS), we only lose ONE.
AND the housing market improves and people are not out on the street.
The GOP is STUPID. Stimulus SAVES MONEY. Keeping people in their homes SAVES MONEY.
Moral hazard be DAMNED. SAVE THE ECONOMY.
Too bad the GOP is more interested in getting ELECTED than saving the UNITED STATES.
Huh. SCREWING THE COUNTRY for PERSONAL GAIN is TREASON.
You know what we do to TRAITORS in WARTIME, now, don't you?
- 62 votes
Well
put, you can argue all day about "fault", the company for lending to
much at to high risk and counting on a every continuing increase in the
equity, or the person who overextended to take the European vacation and
never planed for a rainy day, but the bottom line is the mortgages are
government backed, the mortgage company has been bailed out, so drop the
interest and let these people stay in their homes and pay off their
debt.
- 32 votes
I
get so tired of hearing the old line about 'rewarding bad decision
making'. My house loan is one of those underwater and it has nothing to
do with my bad decision making. I have never missed or been late on a
payment. The reason is all the foreclosed homes in my neighborhood. The
banks got bailed out but I got screwed. You all should stop assuming
about other people..........
- 78 votes
I
can understand lowering interest until the cows come home. However,
I'll go along with this absolutely ridiculous notion of reducing
principal only if people can explain to me how it will be applied FAIRLY
to everyone who owns a home and with other types of loans.
How will it work for people who are current on their mortgages and the value of their homes have fallen?
How will it work for people who paid off their mortgages and the value of their home has also gone down?
You're not going to tell me that the people in these situations are not entitled to have their principal reduced, are you?
And if we go ahead with this absolutely ridiculous idea, why should it stop with just home loans? Why won't kids out of college then be allowed to "reduce principal" from their student loans? Why won't people who bought cars, that depreciate on a % basis faster than a house ever could, then get "principal reductions" on their car loans?
These questions aren't rhetorical. For all of you screaming that people should have their principal reduced off of their home loans, I dare you to answer these questions.
How will it work for people who are current on their mortgages and the value of their homes have fallen?
How will it work for people who paid off their mortgages and the value of their home has also gone down?
You're not going to tell me that the people in these situations are not entitled to have their principal reduced, are you?
And if we go ahead with this absolutely ridiculous idea, why should it stop with just home loans? Why won't kids out of college then be allowed to "reduce principal" from their student loans? Why won't people who bought cars, that depreciate on a % basis faster than a house ever could, then get "principal reductions" on their car loans?
These questions aren't rhetorical. For all of you screaming that people should have their principal reduced off of their home loans, I dare you to answer these questions.
- 36 votes
SUCH a screwed up way we allow the banks TO RUN OUR COUNTRY.
- 30 votes
James,
I agree that lowering interest rates would solve a lot of this problem. But the "moral hazard" is
a bu!!$h.!t argument. When bankers and Wall Street bigwigs are put in jail for lying to the public and creating these bad loans/credit swaps in the first place, then we can talk about "moral hazards". But not until then.
Or how about, if people must lose their homes instead of renegotiating a bad deal, bankers should then lose their banks and be barred from the industry for making bad loans they knew were going to fail in the first place.
Now that would be fair.
I agree that lowering interest rates would solve a lot of this problem. But the "moral hazard" is
a bu!!$h.!t argument. When bankers and Wall Street bigwigs are put in jail for lying to the public and creating these bad loans/credit swaps in the first place, then we can talk about "moral hazards". But not until then.
Or how about, if people must lose their homes instead of renegotiating a bad deal, bankers should then lose their banks and be barred from the industry for making bad loans they knew were going to fail in the first place.
Now that would be fair.
- 42 votes
If
principal is reduced for one group then why not reduce it for all?
This is ludicrous, it would nullify the original contract for sale of
house at a specified price. Who loses, the lender not the seller. Of
course the argument is the lender is crooked but no one held a gun to
the buyer's head to buy at said price.
Interest reduction is a good idea. But Fannie and Freddie are to blame for the whole subprime mess and the lenders bundling practices.
Interest reduction is a good idea. But Fannie and Freddie are to blame for the whole subprime mess and the lenders bundling practices.
- 17 votes
There was a statistic showing that if the Human People, the
homeowners, had been bailed out after the Banking Criminal Activity,
instead of the banks, it would have cost the govt way less--and that
would be for reducing principle of All Homeowner Mortgages.
No matter whether your mortgage is underwater or not, every homeowner was a victim of Banker Malfeasance. The value of your house declined, and if you had to sell your house, you lost out. There are many retirees living on vastly reduced pensions & savings because of Banker Lies and Fraud. Great tactic putting the victims in hell instead of the culprits.
If the Banks didn't do anything wrong, why are they settling?
No matter whether your mortgage is underwater or not, every homeowner was a victim of Banker Malfeasance. The value of your house declined, and if you had to sell your house, you lost out. There are many retirees living on vastly reduced pensions & savings because of Banker Lies and Fraud. Great tactic putting the victims in hell instead of the culprits.
If the Banks didn't do anything wrong, why are they settling?
- 33 votes
You
guys can just throw ol' Moral Hazard in the garbage. For decades now,
Chap. 13 bankruptcy law has allowed those who can afford to own two
homes the ability to do a "stripdown," where the mortgage on a 2nd home
is reduced to its fair market value, the excess is discharged in
bankruptcy, the mortgagee draws up the new documents with smaller
payments for the debtor, and we're good to go. So if this is available
to the well-heeled, why not the rest of America's distressed homeowners
on their first and only mortgage? Declaring bankruptcy is no walk in the
park, there is means testing and fraud measures and all kinds of hoops
to be jumped through, but it is an impartial venue that can accomplish
the resurrection of a debtor-homeowner without all the foot-dragging and
horse manure about Moral Hazards.
- 24 votes
Once
again, the Greedy Obstructionist Party is not looking out for the
American People. They clearly don't want average Americans to be able to
get ahead, or to stay even for that matter. All they're interested in
is the MONEY, which banks get it, and how it can enrich them and their
cronies. The CONservatives are all in the pockets of the bankers, and
are not on the side of the average American.
If the RepubliCONS were the least bit interested in saving the economy, protecting the average American, or benefiting the standard of living for the middle class, they would say something other than "our ONLY agenda is to defeat Obama!"
How they can claim to love America when they clearly hate the average American is beyond me.
If the RepubliCONS were the least bit interested in saving the economy, protecting the average American, or benefiting the standard of living for the middle class, they would say something other than "our ONLY agenda is to defeat Obama!"
How they can claim to love America when they clearly hate the average American is beyond me.
- 24 votes
S.
Williams....good. Then create a new type of "bankruptcy" (call it
something like "Home Retention Bankruptcy") for this situation where a
homeowner can get his principal reduced. He can keep his home, but his
credit goes in the toilet and he'll have to jump through hoops just to
be approved, just like any other bankruptcy. I can live with that.
However, if people don't want the stigma, long lasting bad credit and red tape of a bankruptcy, here's what I propose:
There's language in your renegotiation that states if your principal gets lowered and the house is sold at an increased value at a later date, you can't reap any of the profit, the only money you're entitled to is the equity you put into it. Sorry, can't have it both ways.
However, if people don't want the stigma, long lasting bad credit and red tape of a bankruptcy, here's what I propose:
There's language in your renegotiation that states if your principal gets lowered and the house is sold at an increased value at a later date, you can't reap any of the profit, the only money you're entitled to is the equity you put into it. Sorry, can't have it both ways.
- 10 votes
James,
I agree that lowering interest rates would solve a lot of this problem. But the "moral hazard" is
a bu!!$h.!t argument. When bankers and Wall Street bigwigs are put in jail for lying to the public and creating these bad loans/credit swaps in the first place, then we can talk about "moral hazards". But not until then.
Those of you arguing the moral hazard argument is not valid have no idea what you are talking about. I work for a local bank reviewing loan modification requests and other workout requests for troubled borrowers. Over 1/2 of the request I review are by people that want their balances reduced to market value but can afford the current rate and monthly payment. I am told at least once a week by borrower who are current and at a very good rate that unless the bank forgives their balance to market value, they will simply walk away. The moral hazard is there already.
For those of you proposeing a balance forgiveness, what do you do when $50k of a balance is forgiven and the borrower then pays down their home and sells it for more than is now owed on the home. Do you favor that any profits the borrowers make from this type of transaction must first be repayed back to the lender, or are you advocating someone who has $150,000 mortgage balance that has their balance reduced to $$100,000 and then pays the loan down to $75,000 before selling the home, can walk away with $25,000 in cash? I can see the benefits of forbearing principal by setting it aside as non-interest bearing but needing to be repaid at time of sale.
Lastly, what about borrowers that put a signficiant amount of money down on the purchase of their home. I put 30% down on the purchase of my home but now I'm right at 100% loan to value. If is sell the home, I have lost my downpayment, not the lender. So, I'm being penalized for putting money down versus the borrower that financed 100% of their purchase who has no financial loss when principal is forgiven.
I agree that lowering interest rates would solve a lot of this problem. But the "moral hazard" is
a bu!!$h.!t argument. When bankers and Wall Street bigwigs are put in jail for lying to the public and creating these bad loans/credit swaps in the first place, then we can talk about "moral hazards". But not until then.
Those of you arguing the moral hazard argument is not valid have no idea what you are talking about. I work for a local bank reviewing loan modification requests and other workout requests for troubled borrowers. Over 1/2 of the request I review are by people that want their balances reduced to market value but can afford the current rate and monthly payment. I am told at least once a week by borrower who are current and at a very good rate that unless the bank forgives their balance to market value, they will simply walk away. The moral hazard is there already.
For those of you proposeing a balance forgiveness, what do you do when $50k of a balance is forgiven and the borrower then pays down their home and sells it for more than is now owed on the home. Do you favor that any profits the borrowers make from this type of transaction must first be repayed back to the lender, or are you advocating someone who has $150,000 mortgage balance that has their balance reduced to $$100,000 and then pays the loan down to $75,000 before selling the home, can walk away with $25,000 in cash? I can see the benefits of forbearing principal by setting it aside as non-interest bearing but needing to be repaid at time of sale.
Lastly, what about borrowers that put a signficiant amount of money down on the purchase of their home. I put 30% down on the purchase of my home but now I'm right at 100% loan to value. If is sell the home, I have lost my downpayment, not the lender. So, I'm being penalized for putting money down versus the borrower that financed 100% of their purchase who has no financial loss when principal is forgiven.
- 21 votes
STLMIke...great post!
I wish there were a way credit agencies could target these people who actually can afford their payments but walk away anyway. They're the ones making this terrible disaster even worse. I say if people fit that criteria, their credit is trashed for 10-15 years.
At some point, there has to be a reward for people who've been paying off their mortgages.
I wish there were a way credit agencies could target these people who actually can afford their payments but walk away anyway. They're the ones making this terrible disaster even worse. I say if people fit that criteria, their credit is trashed for 10-15 years.
At some point, there has to be a reward for people who've been paying off their mortgages.
- 10 votes
I
do not think principal should be forgiven, but if it is it should be
noted permanently and that person should never be able to do it again,
and when they sell their home if there is a profit it should be used to
pay the principal that they were forgiven. The money that everyone wants
to forgive is part of peoples pensions and 401k's, and they should not
lose this money so someone else can live better than they do, when in
many cases the people who are over their head are to blame. Look at the
whole picture, if the person is over their head on a mortgage and
driving a new car and went to the best schools, why should the people
who live within their means be paying for irresponsibility. Not everyone
was irresponsible but the ones that were should not profit by any of
these programs.
Paying for others irresponsibility is getting old, especially when you see how much more comfortably many of them live because of it.
Paying for others irresponsibility is getting old, especially when you see how much more comfortably many of them live because of it.
- 11 votes
Look at the whole picture, if the person is over their head on a mortgage and driving a new car and went to the best schools, why should the people who live within their means be paying for irresponsibility. Not everyone was irresponsible but the ones that were should not profit by any of these programs.Amen.
Paying for others irresponsibility is getting old, especially when you see how much more comfortably many of them live because of it.
- 7 votes
I get so tired of hearing the old line about 'rewarding bad decision making'. My house loan is one of those underwater and it has nothing to do with my bad decision making. I have never missed or been late on a payment. The reason is all the foreclosed homes in my neighborhood. The banks got bailed out but I got screwed. You all should stop assuming about other people..........It has exactly to do with bad decision making. Your house lost value (which was not real wealth) due to foreclosures..well guess what...millions also have. That's a risk you took buying a home. Millions of us know the foreclosures were coming.
Learn personal responsibility. You didn't get lied to on your loan did you? So you bought and made a bad business decision. You bought a home that was over-valued during a boom. Then it lost value. Many of us did not. That is not our problem. It's your problem and you took a risk of buying a home.
Also, what if principal is forgiven and then the house later on increases in value. Are you going to then give that money back to the lender/bank if you make a profit? That's why you cannot touch principal. Too many factors.
If you don't like it, walk away like millions have done.
These questions aren't rhetorical. For all of you screaming that people should have their principal reduced off of their home loans, I dare you to answer these questions.They can't. There are so many people in different situations. That's why interest should only be lowered.
When you start lowering principal, you then get into the "Well had I known that, I would have bought a home..because at least I would have known that these fake prices would be reduced to realistic values and so on..."
Reducing principal rewards bad decision making and punishes people who didn't buy, have rented or have been current and paying.
If principal is reduced for one group then why not reduce it for all? This is ludicrous, it would nullify the original contract for sale of house at a specified price. Who loses, the lender not the seller. Of course the argument is the lender is crooked but no one held a gun to the buyer's head to buy at said price.Exactly. The banks and government should refund my rent the last 7 years since I didn't buy. Had I known everything was going to be reduced, I could have just bought instead.
See the issue there folks...you can't reduce principal...
- 10 votes
Everyone is focused on the people underwater, behind on their mortgage, or in foreclosure and about to lose their homes.
Lets stop for a moment and redirect the attention to the 37% of people in the country who don't own their own home.
I'm in my early thirties and want to buy a home. If you cut these people's principle they will stay in their houses and it will stop the price drop in housing. That cuts me and people like me out of the market because home prices are still vastly overinflated vs what people can pay. I was responsible. I saved money for a downpayment. I didn't take on debt when they were handing out shadow loan for 300k to people who worked at McD's. And everyone and their mother, lawmakers especially, are trying to find a way to SCREW me and people like me.
People need to look at both sides of the issue. These people need to burn for their irresponsibility and people, like myself, should be rewarded for being patient and responsible. We're currently sitting on the sidelines looking and waiting for housing in our area to either come into price range, or for homes to go up and for sale in an area due to these other individuals losing their homes. Quit trying to game the market and the system. You've got over 1/3rd of the country that would love to buy a house. Let those people do what they do and let the market work.
Lets stop for a moment and redirect the attention to the 37% of people in the country who don't own their own home.
I'm in my early thirties and want to buy a home. If you cut these people's principle they will stay in their houses and it will stop the price drop in housing. That cuts me and people like me out of the market because home prices are still vastly overinflated vs what people can pay. I was responsible. I saved money for a downpayment. I didn't take on debt when they were handing out shadow loan for 300k to people who worked at McD's. And everyone and their mother, lawmakers especially, are trying to find a way to SCREW me and people like me.
People need to look at both sides of the issue. These people need to burn for their irresponsibility and people, like myself, should be rewarded for being patient and responsible. We're currently sitting on the sidelines looking and waiting for housing in our area to either come into price range, or for homes to go up and for sale in an area due to these other individuals losing their homes. Quit trying to game the market and the system. You've got over 1/3rd of the country that would love to buy a house. Let those people do what they do and let the market work.
- 3 votes
No
matter what the outcome, the problem was too many people bought houses
they couldn't afford with money they didn't have. Both buyers and
lenders share the blame. Unfortunately people who were not involved
still lost, greed by financial institutions, investors and home buyers
wrecked the economy.
- 6 votes
BlueBurner -
Sure you get tax subsidies. One for each dependent you have. Get out there and work it!
Sure you get tax subsidies. One for each dependent you have. Get out there and work it!
- 3 votes
JaxA wrote "At some point, there has to be a reward for people who've been paying off their mortgages."
You end up with a house, right? I can understand that some investors (house buyers in this case) want even more preferential treatment of their capital, but why should housing investments be given even more preferential treatment? In other investments, you're only allowed to deduct the interest payments on a loan used to purchase capital against gains. The mortgage interest deduction encourages excessive leverage and loans with too much interest and even more selling.
I think the mortgage interest deduction should be eliminated and replaced with a straight deduction against the capital gains of a house, and the capital gains should also be taxed.
You end up with a house, right? I can understand that some investors (house buyers in this case) want even more preferential treatment of their capital, but why should housing investments be given even more preferential treatment? In other investments, you're only allowed to deduct the interest payments on a loan used to purchase capital against gains. The mortgage interest deduction encourages excessive leverage and loans with too much interest and even more selling.
I think the mortgage interest deduction should be eliminated and replaced with a straight deduction against the capital gains of a house, and the capital gains should also be taxed.
- 1 vote
A lot of people have no idea what it actually means when they talk of reducing principal.
On most loans, 1/2 or more of your mortgage payment each month goes to interest, while the remaining goes towards paying down the principal. What the loan modifications actually do, is apply the interest already paid to the principal. In effect, they retroactively turn it into an interest-free loan, and then refinance the remaining balance.
For example, lets take a $100k home at 6% interest. Monthly payments are $600/mo, and of that, $325 is for interest. After 5 years, the homeowner has paid almost $20k in interest on that loan, and a little over $16k towards the loan balance. In a loan modification, that $20k paid in interest is instead applied to the balance.
If they do a loan modification, the homeowner only owes $64k instead of $84k. The lender "loses" 5 years of interest ($20k), and they draft a new 30-year loan on the remaining principal (worth $76k interest at the same interest rate). Net Result: $76k revenue from interest, instead of $117k they would have gotten from the original loan term.
The alternative for the lender would be to foreclose, short-sell the property, AND lose out on future interest payments. Net result: A loss of $50k+, instead of $76k revenue from interest
On most loans, 1/2 or more of your mortgage payment each month goes to interest, while the remaining goes towards paying down the principal. What the loan modifications actually do, is apply the interest already paid to the principal. In effect, they retroactively turn it into an interest-free loan, and then refinance the remaining balance.
For example, lets take a $100k home at 6% interest. Monthly payments are $600/mo, and of that, $325 is for interest. After 5 years, the homeowner has paid almost $20k in interest on that loan, and a little over $16k towards the loan balance. In a loan modification, that $20k paid in interest is instead applied to the balance.
If they do a loan modification, the homeowner only owes $64k instead of $84k. The lender "loses" 5 years of interest ($20k), and they draft a new 30-year loan on the remaining principal (worth $76k interest at the same interest rate). Net Result: $76k revenue from interest, instead of $117k they would have gotten from the original loan term.
The alternative for the lender would be to foreclose, short-sell the property, AND lose out on future interest payments. Net result: A loss of $50k+, instead of $76k revenue from interest
- 2 votes
I
agree with cutting the interest rates but NOT the principal. They
borrowed the money, they should have to pay it back. I had to pay mine
back. Nobody lowered my interest rate either.
- 4 votes
Once
again the Republicans are not doing their job, except to keep the
money, exemptions, and benefits only for the elite. So what else is
new! The greedy Banks simply will not lower the interests rates for
those in foreclosure or underwater. They simply have NO UNDERSTANDING of
what their greedy corruption has done and still is doing to our
economy. Their only concern is for huge profits, outrageous bonuses,
etc. They seem to think that this problem will disappear over night and
can go back to raking in the high interests. We've heard of Banks
charging in the 30's for closing costs. When the complaints are lodged
about the fraud with the appropriate State & national authorities,
nothing appears to be done. Those making the complaints never hear or
see anything from the various Departments. The complaints just fall into
the "Big Black Hole". Congress and the elite society acts as if it is
okay for big businesses to be forgiven CONTINUALLY and hand out our
money, but forget the small businesses, middle class , and poor home
owners (stop to consider how many times we have bailed out banks due to
bad investments, etc.) To help the home owners is considered
"Socialism". So what do we call it when we "Bail Out" the elite time
after time? After bailing them out, we still have a Recession along with
loss of jobs. It wasn't the middle class, small businesses, and poor
that created the fraud and corruption on Wall Street/Bank Street. But
there's been no visible help for them of any kind in spite of all the
media spouting of what is being done. Then, there are the lawyers, who
are very willing to take the money from those in trouble, claiming to
help them, but then seldom answer their customers questions.
STLMike (post # 1.17), you are obviously a Wall Street / Finance Street Bank character. Your above comments are very manipulative when talking about specific small percentages. What morals did Wall Street and Finance Street display when they crashed our economy forcing millions out of work?? Because of them, there are more than 8.2 million young children living in the streets, and starving. Where's the moral issue there???? Oh, but it's okay to say there is a "moral issue" for those losing their homes to loss of jobs, fraud, etc. Therefore, they should eat the BANKS' LOSSES with high interests (9% and more), and remain under water because of the banks bad judgements, corruption, fraud, overly greediness with interests rates and closing costs that originally caused this problem. Also, you neglected to mention that it is the elite, who use the LLC's to avoid getting a bad credit rating due to their home listed under a business company. No need to answer! Society has already heard enough about how it's the fault of the middle class and the poor along with various other manipulated excuses. You can't trust Wall Street and Bankers anymore than you can throw a brick house. And that is putting it nicely!!!
STLMike (post # 1.17), you are obviously a Wall Street / Finance Street Bank character. Your above comments are very manipulative when talking about specific small percentages. What morals did Wall Street and Finance Street display when they crashed our economy forcing millions out of work?? Because of them, there are more than 8.2 million young children living in the streets, and starving. Where's the moral issue there???? Oh, but it's okay to say there is a "moral issue" for those losing their homes to loss of jobs, fraud, etc. Therefore, they should eat the BANKS' LOSSES with high interests (9% and more), and remain under water because of the banks bad judgements, corruption, fraud, overly greediness with interests rates and closing costs that originally caused this problem. Also, you neglected to mention that it is the elite, who use the LLC's to avoid getting a bad credit rating due to their home listed under a business company. No need to answer! Society has already heard enough about how it's the fault of the middle class and the poor along with various other manipulated excuses. You can't trust Wall Street and Bankers anymore than you can throw a brick house. And that is putting it nicely!!!
- 8 votes
"Fannie
Mae officials estimated that the pilot program of cutting loan balances
would cost about $1.7 million to implement and generate potential
taxpayer savings of more than $410 million."
Obviously something is not being reported truthfully here. There is no way on earth that forgiving a measly $1.7 million of OWED debt causes a SAVINGS of nearly half a BILLION.
Obviously something is not being reported truthfully here. There is no way on earth that forgiving a measly $1.7 million of OWED debt causes a SAVINGS of nearly half a BILLION.
- 3 votes
Let's
see, if we stall the housing market recovery we stall the economic
recovery and our chances for getting the Presidency back improve -
Republicans.
- 2 votes
I
just love how the article says "the housing collapse of 2006". You
wanna bet on that? I purchased a house in 2006 and it seemed like the
top of the market at that time. $570K @ 6 3/4%. I ended up underwater
and talked to my bank about a refi when interest went way down, They of
course said "SURE", just give us money for a new title search and an
appraisal and we'll just add a couple new fees, but we'll roll it all
into your new mortgage so you won't feel a thing. I told them to F
themselves and paid off my house with cash. So who is going to get some
of my money back for me when the libs start reducing everyones
principle? Like President Obama keeps saying it should be FAIR.
Eric - the progressive/liberal Congress and President Obama have done just fine stalling our economy all by themselves. They don't need republicans to help them. Tell the Senate to act on some of the bills that the House has sent to them and we might see some improvement.
Eric - the progressive/liberal Congress and President Obama have done just fine stalling our economy all by themselves. They don't need republicans to help them. Tell the Senate to act on some of the bills that the House has sent to them and we might see some improvement.
- 5 votes
You end up with a house, right?Right, but the people had their principal reduced ended up with a house too, just for less than what they agreed to, where as those that kept current had to pay the full value. What's your point?
I can understand that some investors (house buyers in this case) want even more preferential treatment of their capital, but why should housing investments be given even more preferential treatment?Am I misunderstanding something? Are you saying that the mortgage interest deduction, that's there for everyone who owns a home, is the reward for responsible people who pay on time? And that taking it away, or diminishing it somewhat, for people who have their interest or principal reduced is the penalty?
I'm not sure I'm following.
- 2 votes
I
just have one quick question, how soon is this deMarco ass going to
lose his job?? Just another example of what happens when the repugs
collectively blocked a permanent nomination.
- 6 votes
Another political stooge putting his politics in front of America.
- 6 votes
Reducing
interest rates (for everyone) sounds reasonable - especially
considering banks are getting money from the government at 0%.
As to reducing principle...sure, as long as someone reimburses me for my investment accounts being underwater...
Some people made bad house purchases, and they need to learn from their mistakes. If we just give them money (i.e.; reduce the principle), they are not going to learn anything. I know several people that have filed for bankruptcy, and from what I can see - they never learn, and they usually file again in another 7 to 10 years.
If there was actual lender fraud involved, then I'm fine with principle reduction. If it was just a bad decision buy the homeowner, I feel sorry for your situation, and I hope you learned a valuable lesson - but I'm not going to bail you out unless there are significant other factors that contributed to your situation (such as large, reasonably unforeseen medical bills).
As to reducing principle...sure, as long as someone reimburses me for my investment accounts being underwater...
Some people made bad house purchases, and they need to learn from their mistakes. If we just give them money (i.e.; reduce the principle), they are not going to learn anything. I know several people that have filed for bankruptcy, and from what I can see - they never learn, and they usually file again in another 7 to 10 years.
If there was actual lender fraud involved, then I'm fine with principle reduction. If it was just a bad decision buy the homeowner, I feel sorry for your situation, and I hope you learned a valuable lesson - but I'm not going to bail you out unless there are significant other factors that contributed to your situation (such as large, reasonably unforeseen medical bills).
- 2 votes
What
was morally wrong was the loan brokers who did not run background
checks, but claimed they did, who claimed houses were worth what the
market would support, when they were not, who pocketed the money by
stealling from the home owner and lying about it to the banks. The
theft has already occured, and the theif was not the home owner.
Niether was the money stolen from the home owner, it was stolen from the
banks and their investors. But the banks and investors want the home
owners to pay them back. That is what is morally wrong.
- 2 votes
JH....are
you saying you purchased a half-million-dollar plus home and paid your
balance off IN CASH after six years (or fewer)?? Now, if you still own
the house, by my reckoning, that solidly puts you in the top 1% as far
as income (or net worth, if you have family money), so your views on
this subject are certainly in keeping with the other
millionaires/billionaires out there....so no surprises there.
- 3 votes
EXCELLENT posts here today by JaxA & STL Mike ! I couldn't have articulated how I feel better.
Principle reduction is a terrible idea. It would be the start of many a slippery slope tol financial moral decay. Not that many of the bankruptcies we have today aren't already morally repugnant. Next up, student loans.! Oh that's right, Obama already came up with a plan to forgive those via a little something he sneaked into the Obama Care bill. Nancy was right, they needed to pass it so all of us people who live and play by the rules can see how they're going to get screwed.
Principle reduction is a terrible idea. It would be the start of many a slippery slope tol financial moral decay. Not that many of the bankruptcies we have today aren't already morally repugnant. Next up, student loans.! Oh that's right, Obama already came up with a plan to forgive those via a little something he sneaked into the Obama Care bill. Nancy was right, they needed to pass it so all of us people who live and play by the rules can see how they're going to get screwed.
- 3 votes
Cnhit,
Not sure what part of the country you live in where home prices are "vastly overpriced" for peoples' incomes unless its what has been historically a high price area like NYC. Now more than ever has been a time to buy in the majority of the country due to the price corrections that occured when the bubble burst.
Maybe it's time to save your money and move to an area where housing costs are more in keeping with personal incomes. My parents finally managed to leave the Northeast and were able to buy a whole lot of house with a very minimal property tax load compared to what sellers and the state wanted back home.
Many times in my and my family's life we've had to dip into that well of pioneer spirit, that has characterized American life, and set out for greener pastures.
Not sure what part of the country you live in where home prices are "vastly overpriced" for peoples' incomes unless its what has been historically a high price area like NYC. Now more than ever has been a time to buy in the majority of the country due to the price corrections that occured when the bubble burst.
Maybe it's time to save your money and move to an area where housing costs are more in keeping with personal incomes. My parents finally managed to leave the Northeast and were able to buy a whole lot of house with a very minimal property tax load compared to what sellers and the state wanted back home.
Many times in my and my family's life we've had to dip into that well of pioneer spirit, that has characterized American life, and set out for greener pastures.
- 2 votes
"Fannie Mae might reduce its losses substantially in many cases by writing down principal."I guess that would logically mean that the program MIGHT NOT as well. Much ado about nothing.
I think the bad decisionmaking wasn't done by the homeowners, it was
the banks and others who saw a moneymaking opportunity in the context of
regulatory neglect and went for the grab. Taxpayers bailed them out
with low-interest loans which they then loaned to banking customers at
usurious rates.
Banks threw half the country out of work, caused wages to freeze up or decline, put the others in low-pay, no-benefits employment. If you put a dollar value on the mess they caused, it would be in the trillions.
Don't talk to me about bad decisionmaking. People would still be living in those homes, paying mortgages, building savings were it not for Bankers BadDecisionmaking..
Banks threw half the country out of work, caused wages to freeze up or decline, put the others in low-pay, no-benefits employment. If you put a dollar value on the mess they caused, it would be in the trillions.
Don't talk to me about bad decisionmaking. People would still be living in those homes, paying mortgages, building savings were it not for Bankers BadDecisionmaking..
- 3 votes
I
too am against cutting principal, however, the idea of deferring a
portion till the home sale is valid. It will give the homeowner an
immediate relief while also allowing for a reduction in foreclosures and
a recoup of original loan amount when realized at the final sale.
A reduction in interest is a no-brainer and should have happened for every homeowner by now, regardless of having to re-finance. If the banks are getting interest free loans then that should trickle down, without question.
A reduction in interest is a no-brainer and should have happened for every homeowner by now, regardless of having to re-finance. If the banks are getting interest free loans then that should trickle down, without question.
- 2 votes
"DeMarco
repeated his philosophical concerns - an argument also known as "moral
hazard" - that offering principal reduction to some homeowners could
prompt others who are current on their loans to ask to have their loan
balances cut."
So the people who made bad decisions should be rewarded with discounts, but responsible people should pay the full price PLUS subsidize those who made bad decisions.
That sounds like something liberals would fully support.
So the people who made bad decisions should be rewarded with discounts, but responsible people should pay the full price PLUS subsidize those who made bad decisions.
That sounds like something liberals would fully support.
- 3 votes
I
am completely against reducing the principal balance on these loans.
These people took on the debt willingly. They made a bad investment and
no they want someone else to pick up the tab for that. What about all
the people who are underwater yet continue to honor their
obligations?!?! Wouldn't they be entitled to a principal reduction as
well!!! How do you determine who gets a free handout and ho does
not?!?! What about those who sold house and had to pay money at closing
because they were underwater, do they get that money back?!?! If you
start reducing principal for those who overextended themselves and took
on mortgages they could not afford you are rewarding their poor
judgement. What about those who refinanced, taking equity out of their
homes so they could buy new cars, boats, take expensive vacations, etc.
They are now underwater because they used their home like a piggy bank.
They would not be underwater if they had not drawn off all the equity
during the boom. Do these people get rewarded with a principal
reduction too just because they are no in financial difficulty of their
own making?!?!
People need to understand that you are responsible for your own decisions and you pay the price when you make a bad one. To socialize those losses at the expense of those who were responsible is completely wrong!!!
People need to understand that you are responsible for your own decisions and you pay the price when you make a bad one. To socialize those losses at the expense of those who were responsible is completely wrong!!!
- 4 votes
Not
going to venture into the morality of touching principle or not. But I
do agree that interest would be the least complicated target. And it
would still make a solid dent in monthly payments.
As to the idea that those that are able to make their payments should receive a reward as well. I don't really agree. I'm happy that I have the ability to make my full payments. If someone else loses a job, or gets hurt, I don't begrudge them any help they might get. A civilized nation should have safety nets for these sorts of things.
However, someone else falling on bad luck doesn't mean that I should get some sort of treat because of it.
As to the idea that those that are able to make their payments should receive a reward as well. I don't really agree. I'm happy that I have the ability to make my full payments. If someone else loses a job, or gets hurt, I don't begrudge them any help they might get. A civilized nation should have safety nets for these sorts of things.
However, someone else falling on bad luck doesn't mean that I should get some sort of treat because of it.
- 1 vote
Perhaps
the 'fair' thing to do is to put a portion of the loan balance in
'abeyance', wherein they make no payments on that portion of the loan
(same effect as a reduction on monthly payments), but when the house is
ultimately sold, the portion of the loan in 'abeyance' has to be paid
back before the homeowner gets any profits.
That would seem to be a win-win situation, wherein the homeowner gets the benefit of a much reduced monthly payment that allows them to remain in the home, but they do not get a financial gain over those who actually make the agreed payments. The portion of the loan in 'abeyance' would continue to accrue interest, but no payments would be made until the house is sold.
#1.46 - Tue May 1, 2012 3:11 PM EDTThat would seem to be a win-win situation, wherein the homeowner gets the benefit of a much reduced monthly payment that allows them to remain in the home, but they do not get a financial gain over those who actually make the agreed payments. The portion of the loan in 'abeyance' would continue to accrue interest, but no payments would be made until the house is sold.
DeMarco "It's mine all mine. I got mine so F__— You!"
This guy has no moral high ground being the spokesperson for the greedy, corrupt, larcenous banking interests to talk about a "moral hazard".
The interest should 0% just like the banks get from the Fed. We should have bailed out the citizen homeowners, not the banks. That was a going away present from "Shrub" to his "base".
This guy has no moral high ground being the spokesperson for the greedy, corrupt, larcenous banking interests to talk about a "moral hazard".
The interest should 0% just like the banks get from the Fed. We should have bailed out the citizen homeowners, not the banks. That was a going away present from "Shrub" to his "base".
- 4 votes
If true this Sum-bitch "DeMarko needs to be taken out and shot, hung, then burnt!
- 1 vote
what
about seniors on fixed income? i am underwater buy 300% trying to
make ends meet on fixed income never late on payment. need to have loan
modified for lower payment. it is a adjustable loan that the bank put
on hold the adjustments present rate 7%. if obama wants reelected he
must address this issue also congress needs to act. housing market is
very important to the economy we must fix it or recession wil continue
and get worse.
- 1 vote
Soon the whole country will be full of abandoned homes...look at Detroit. Is that what we really want for America?
Within a block of my home (underwater but I've never missed a payment) are at least 6 homes in foreclosure. It's sad to see them sit there, grass unmowed, basic maintenance undone, etc. I'd rather have homes full of families even if contracts need to be renegotiated to do so.
Within a block of my home (underwater but I've never missed a payment) are at least 6 homes in foreclosure. It's sad to see them sit there, grass unmowed, basic maintenance undone, etc. I'd rather have homes full of families even if contracts need to be renegotiated to do so.
- 3 votes
I
read about the program and tried to find information. However, banks
"knew nothing about it," and mortgage companies would not comment.
Finally I did make contact with a RE Broker who said the program was
stiffled by the White House.
#1.51 - Tue May 1, 2012 3:47 PM EDT
Mike,
Just curious...if you are on a fixed income, why did you buy a house you couldn't easily afford? What would you have done if the bubble hadn't burst yet?
It sounds to me like you gambled on being able to flip the house and you lost...
Just curious...if you are on a fixed income, why did you buy a house you couldn't easily afford? What would you have done if the bubble hadn't burst yet?
It sounds to me like you gambled on being able to flip the house and you lost...
- 1 vote
If
these people can't make the payment, they can't make the payment. No
amount of philosophical principals are going to change that. When these
banks foreclose (and in a majority of these cases THEY WILL), then the
contract is breached and the bank is out the difference in the loan and
market value. Now, you have the additional economic impact of a homeless
family and an abandoned property. The banks, FNMA, and other
stakeholders still lose.
If you can pay your mortgage with no help, that's great. You have no reason to be resentful of people who find themselves in a once in a generation economic crisis. While these people are staying awake all night wondering if their children are going to sleep in their van tommorrow, I seriously doubt they are giggling to themselves about how they got one over on Uncle Sam.
If you can pay your mortgage with no help, that's great. You have no reason to be resentful of people who find themselves in a once in a generation economic crisis. While these people are staying awake all night wondering if their children are going to sleep in their van tommorrow, I seriously doubt they are giggling to themselves about how they got one over on Uncle Sam.
- 1 vote
Goddamn
republicans never miss a chance to stick it to those in trouble, or the
poor. Republican Senators blocked the nomination of "Joseph Smith" to
replace DeMarko, with the goddamn Shelby of Alabama saying Smith would
only be cutting mortgages and throwing the bill to the tax payers.
Shelby obviously thinks the taxpayers are fools. Taxpayers had to, and
are yet, having to foot the bill for this mess. I despise the goddamn
republicans!
- 5 votes
@
Tiggle. I have to disagree with you. Why, if I'm current on my loan
and underwater do I only qualify for a refi that I have to pay for and
those that are behind on their payment get a principle reduction? How
is that fair? Look, the greedy banks and their careless practices that
misled buyers to think they were getting in on the housing market before
values kept going up resulted in this mess. My home is worth $75k less
than it was when I bought it (Tucson, AZ) and I can't imagine it will
ever return near to what I owe on it. Why shouldn't the banks be
responsible for correcting their errors and actions? We have rights as
taxpayers and being lied to and misled shouldn't be one of them,
especially when it comes to home ownership. I'm beyond UPSET over how
long this has all taken and we're still not anywhere close to a housing
crisis resolution. Our government is too concerned with elections and
bickering on Capitol Hill about who's the better party, while all of us
hardworking Americans are forced to sit on the phone with Bank of
America for an hour and listen to a $12 an hour employee tell us they're
going to transfer us now because we've been directed to the wrong
department. The entire system is broken and our government is fighting
over birth certificates and solar panels. I will give BofA one more
shot at fixing my situation and if I'm not satisfied, I'm short selling
my home and never buying again. How can I when I've experienced what I
have and learned about how much this means to Congress by their total
lack of commitment to fixing what is keeping our economy down? I can't
spend money on goods to stimulate the economy if I have an inflated
mortgage that hangs over my head like a 2-ton elephant.
- 2 votes
Kman,
I'm in a historically high area in the North Eastern United States. However, housing prices have had insane returns of even prior to the boom going back to the 90's when I was still in High School and College. Real Estate should not increase at a rate of 7%+ (rule of tumb prior to the bust) when wages are stagnant and inflation was low to non-existant. All that atop money for nothing from the FED to loan. This is a bubble that has been building for over 20 years. It's got a hell of a popping to go.
The point is I've got a stable and good job here. Housing prices are falling here. But they are not falling as hard or as fast because of all the dancing that we're doing in the housing market and banks refusing to foreclose and take their losses to market. If you want a great big house with little cost sure go to South Florida (where I was previously before my company relocated to the North East) or Nevada, oh wait there are no jobs there. See that's the rub. When making the decision of house or job, job wins out first and always. Lots of people here are renting that want to buy, and we're getting there. Rents are 'almost' at what the cost is to buy in the same area. Just a little more time and if people quit screwing with the market it will get there.
I'm just not going to sit here and be silent while people, or the politicians that represent them, that made bad decisions try to weasel out of those decisions and screw me in the process.
I'm in a historically high area in the North Eastern United States. However, housing prices have had insane returns of even prior to the boom going back to the 90's when I was still in High School and College. Real Estate should not increase at a rate of 7%+ (rule of tumb prior to the bust) when wages are stagnant and inflation was low to non-existant. All that atop money for nothing from the FED to loan. This is a bubble that has been building for over 20 years. It's got a hell of a popping to go.
The point is I've got a stable and good job here. Housing prices are falling here. But they are not falling as hard or as fast because of all the dancing that we're doing in the housing market and banks refusing to foreclose and take their losses to market. If you want a great big house with little cost sure go to South Florida (where I was previously before my company relocated to the North East) or Nevada, oh wait there are no jobs there. See that's the rub. When making the decision of house or job, job wins out first and always. Lots of people here are renting that want to buy, and we're getting there. Rents are 'almost' at what the cost is to buy in the same area. Just a little more time and if people quit screwing with the market it will get there.
I'm just not going to sit here and be silent while people, or the politicians that represent them, that made bad decisions try to weasel out of those decisions and screw me in the process.
- 2 votes
Jax A,
You asked: "How will it work for people who are current on their mortgages and the value of their homes have fallen?
How will it work for people who paid off their mortgages and the value of their home has also gone down?"
For those of us with the good fortune to have stayed current; we may be paying more, but we are not losing our homes. On the other hand, many of us are trapped in those homes by an inability to sell them without raising $1k's or $10k's of extra dollars to repay the balance of the mortgage. And each of the homes which go into foreclosure depress the market price of our homes, worsening our trap. So we sit, waiting for the next crisis to put us in the delinquent status as well.
For those with no mortgage but devalued houses, the spiral works the same way. Each passing month of more and more foreclosures places more downward pressure on one of their greatest assets. While I don't believe that we should consider our homes as an investment, like the realtors all tout; in reality, houses are the largest single asset held by the vast majority of home-owners in America. And as long as the glut of houses in foreclosure or legal limbo continues, the market for those houses will remain constrained at low prices.
You asked: "How will it work for people who are current on their mortgages and the value of their homes have fallen?
How will it work for people who paid off their mortgages and the value of their home has also gone down?"
For those of us with the good fortune to have stayed current; we may be paying more, but we are not losing our homes. On the other hand, many of us are trapped in those homes by an inability to sell them without raising $1k's or $10k's of extra dollars to repay the balance of the mortgage. And each of the homes which go into foreclosure depress the market price of our homes, worsening our trap. So we sit, waiting for the next crisis to put us in the delinquent status as well.
For those with no mortgage but devalued houses, the spiral works the same way. Each passing month of more and more foreclosures places more downward pressure on one of their greatest assets. While I don't believe that we should consider our homes as an investment, like the realtors all tout; in reality, houses are the largest single asset held by the vast majority of home-owners in America. And as long as the glut of houses in foreclosure or legal limbo continues, the market for those houses will remain constrained at low prices.
- 1 vote
What morals did Wall Street and Finance Street display when they crashed our economy forcing millions out of work?? Because of them, there are more than 8.2 million young children living in the streets, and starving....Good Grief
- 1 vote
If
Real Estate grows @ about 3-5% annually without improvements for about ,
I don't know forever, How did I make a bad decision when it suddenly
drops about 25 -30% overnight? Remember the old saying you can't go
wrong with Real Estate as an investment? I'll grant you a lot of this
is bad decisions on the part of our government when they began
implementing programs to get every swinging dick into a house &
mortgages were given' to people who were not qualified to purchase a
house. I had nothing to do with that. I'm still in my house, I'm not
underwater, but I have no equity even though I put down over 30% and
have made 1/12 additional payment each month since I moved in 9 years
ago. I can't speak for everyone, but not all the people losing their
homes made Bad decisions. I was 6 years away from paying off my old
house when I bought this one & it would be great not to have a house
payment now, it is what it is & I make my payment every month on
time. I'm lucky, I have sufficient fixed income to do this because I'm
retired. If I was still in the workforce, & unemployed for an
extended period I might be losing my home just like many others right
now. Doesn't mean I made bad decisions or was Irresponsible.
- 1 vote
Wow,
the people demanding free stuff are out in force again! Look, DeMarco
is OBAMA's guy, but he was the temporary head of the agency. I don't
know what party he belongs to, if any, but it's irrelevant anyhow. None
of the plans put forward work, and for some pretty basic economic
reasons, the gist of which is that you can't get something for nothing.
Let's pretend for just a minute that if principal reduction occurred that, as the article claims, banks AND taxpayers would benefit, or, looked at another way, suffer less. So why are banks not clamoring for such a program? You leftists and progressives need to think, if this is possible, about why these greedy firms you despise (which you claim only want to pad their wallet at your expense) are unwilling to do that which you claim makes emminent sense. Could it be that you have missed something in the equation? For instance, if we pay down the principal for those underwater who are in jeopardy of foreclosure only, then won't those at the margins stop paying their mortgage too, hoping to get in on the gravy train?
But there is a much larger problem with all of this conversation, and it's a problem I am pretty sure no leftist will understand. A major function of the government is to compel contract compliance so long as the laws are followed, whether that means fraud was detected (a major complaint of the left that has virtually no evidence of occurring), or it means someone needs to go through the bankruptcy or foreclosure process. If it's a good idea for a bank to forgive some principal in order to keep the loan alive they will do just that, else your claims they are only greedy are lies. What we have today are large swaths of people demanding that the government not only NOT enforce contracts, but do everything they can to upset them and render them null and void, so that these people can get something for nothing, excuse their bad behavior, and slough the burden off onto future generations.
Sorry, but if we aren't already neck deep in moral hazard I don't know what to call it. Leftists, so far anyhow, have done everything possible to keep the RE market from hitting bottom so that inventory can't clear, assets can't find a true market value, and we can't clean up the mess.
Let's pretend for just a minute that if principal reduction occurred that, as the article claims, banks AND taxpayers would benefit, or, looked at another way, suffer less. So why are banks not clamoring for such a program? You leftists and progressives need to think, if this is possible, about why these greedy firms you despise (which you claim only want to pad their wallet at your expense) are unwilling to do that which you claim makes emminent sense. Could it be that you have missed something in the equation? For instance, if we pay down the principal for those underwater who are in jeopardy of foreclosure only, then won't those at the margins stop paying their mortgage too, hoping to get in on the gravy train?
But there is a much larger problem with all of this conversation, and it's a problem I am pretty sure no leftist will understand. A major function of the government is to compel contract compliance so long as the laws are followed, whether that means fraud was detected (a major complaint of the left that has virtually no evidence of occurring), or it means someone needs to go through the bankruptcy or foreclosure process. If it's a good idea for a bank to forgive some principal in order to keep the loan alive they will do just that, else your claims they are only greedy are lies. What we have today are large swaths of people demanding that the government not only NOT enforce contracts, but do everything they can to upset them and render them null and void, so that these people can get something for nothing, excuse their bad behavior, and slough the burden off onto future generations.
Sorry, but if we aren't already neck deep in moral hazard I don't know what to call it. Leftists, so far anyhow, have done everything possible to keep the RE market from hitting bottom so that inventory can't clear, assets can't find a true market value, and we can't clean up the mess.
- 1 vote
The
people I feel for are those whose mortgages are at a much higher
interest rate than current rates, but can't refinance because their
mortgage is underwater. Many people got talked into short-term
mortgages with balloon payments at the end or increased interest rates
after a few years because these type of loans were offered at lower
intitial interest rates than long-term fixed-rate mortgages. People
were led to believe that home prices would never go down and they could
always re-finance when the balloon payment came due, probably at a even
lower rate. Now many are forced out of their homes after making
thousands of dollars in payments because their monthly payment increased
after the initial teaser rate expired, whereas they could still afford
the payments if they could obtain a loan on the same principle amount at
current mortgage rates.
- 1 vote
An
Independent Thinker... No, I am not a Wallstreet type. I am 31 years
old have worked and lived in St. Lousi all my life. I paid my way
through undergrad, and then an MBA and a Masters in Accounting and have
my CPA. I have never worked high up in the organizations I have worked
for and do not agree with every decision that upper management has
always made. That is one of the reasons I went to work for a locally
owned, community bank. I at least have daily acces to upper management
and can at least put in my two cents about what I see on a daily basis
in reviewing loan modifcations.
Over the last three years, I have worked tirelessly to help the bank avoid foreclosing at all costs up to forgiving pricnipal. We have granted distressed borrowers that are deeply underwater loan modifications as 0% to reduce the balance and do not make dime of income from them. In many cases, however, we cannot modify a loan to an affordable payment. What should we as the lender do when someone has drastic reduction in monthly income where they cannot even afford to pay the homeowners insurance and real estate taxes. I see this happen quite a bit where a borrower was making six figures but is now making less than $40k per year and cannot afford the monthly escrow payment, much less repaying principal. In those cases, we try to give them time to sell the home as a short sale and get out of a bad situation. However, there are many cases were we agree to not accept any payments for 6 month and front the money to pay the escrow provided the borrower agrees to list the home as a short sale. Too many times, the six months goes by and no sale contract. In fact, in many cases, the borrowers listed the home to buy time but never showed it once. The bank is then left with no other option but to foreclose. By the way, over 75% of our foreclosures last year were on non-owner occupied properties where the homeowner was collecting rent from a tenant but not paying the bank. We have no other choice to foreclose and then allow the tenant to pay us direclty to finsih out the terms of their lease. 9 times out of 10 the tenant also stops paying but won't leave the house either. What can we do in these situations as well? One thing that you do not hear reported much in the media is the amount of foreclosure that were 2nd homes or investment properties.
Over the last three years, I have worked tirelessly to help the bank avoid foreclosing at all costs up to forgiving pricnipal. We have granted distressed borrowers that are deeply underwater loan modifications as 0% to reduce the balance and do not make dime of income from them. In many cases, however, we cannot modify a loan to an affordable payment. What should we as the lender do when someone has drastic reduction in monthly income where they cannot even afford to pay the homeowners insurance and real estate taxes. I see this happen quite a bit where a borrower was making six figures but is now making less than $40k per year and cannot afford the monthly escrow payment, much less repaying principal. In those cases, we try to give them time to sell the home as a short sale and get out of a bad situation. However, there are many cases were we agree to not accept any payments for 6 month and front the money to pay the escrow provided the borrower agrees to list the home as a short sale. Too many times, the six months goes by and no sale contract. In fact, in many cases, the borrowers listed the home to buy time but never showed it once. The bank is then left with no other option but to foreclose. By the way, over 75% of our foreclosures last year were on non-owner occupied properties where the homeowner was collecting rent from a tenant but not paying the bank. We have no other choice to foreclose and then allow the tenant to pay us direclty to finsih out the terms of their lease. 9 times out of 10 the tenant also stops paying but won't leave the house either. What can we do in these situations as well? One thing that you do not hear reported much in the media is the amount of foreclosure that were 2nd homes or investment properties.
- 1 vote
I
am underwater in my mortgage, but let me give a little history for the
a$$holes on here who continue to insist that it is "the homeowners'
fault.
I bought my home (foreclosed due to a divorce) 19 years ago (1993) for $100,000 (rounded numbers). in 2006, I had $204,000 in EQUITY (value, $304,000). My house is a 1978 split level. By 2006, it badly needed a new furnace (barely limping along and wasting tons of oil), new windows (old windows you could see the curtains blow when the wind blew) a new sliding back door (the old bronze one couldn't be fixed anymore) and a new roof (it didn't leak, but this necessitated everything when my insurance company saw curling asphalt shingles and said they were going to drop my insurance if I didn't get it replaced). We decided as long as we were doing this, we might as well get the kitchen updated, (was 'contractor special' junk cabinets and counters and sink, worn out appliances, and no dishwasher). Took out $140,000 in equity...now owed $240,000...mortgage went from $950 p/m to $1635 p/m. I paid my own taxes and insurance. No problems. Then came Bush's 2008. My house dropped from $304,000 to $230,000. I didn't like losing the remaining $64,000 in equity, but since we had no intentions of selling the house, and I saw things like DeMarco apparently thought, I decided, I did take out that equity and benefited from it, so I owe it back. Come 2009, it got worse than expected. My wife's income (she works in MRI in a hospital, one of those jobs that was supposedly recession proof) lost hours, let alone overtime. The mortgage now became a hardship. Not only did we fall behind on a few payments, at that time our small town (their treasurer embezzled almost 2 million dollars, when they caught him, he went to prison but they never recovered any money) cried to our mortgage company (Chase) that they wanted tax money now! (They did this with all residents, not just us) When I need money, I have to sacrifice something...when the governmnt needs it, thy just change the rules and take it. When we couldn't magically come up with $5,000 on demand,Chase slammed us into an escrow program and paid the taxes without our consent. Now we owed $1635 mortgage, $400 p/m escrow for yearly taxes, plus another $400 p/m for the taxes that they paid. My wife's income stabilized and we got back on our feet, but the 'mortgage payment' was now $2435 p/m. We couldn't do that. Now here's where it gets good.
I called Chase. I didn't ask for a mortgage reduction type of modification. I just asked them to apply the missed payments, and the escrow they paid, to the end of the loan, stop paying the taxes (I would resume paying them as I had for 15 years with no problems, the town's problems were over now) and I would simply continue to pay my $1635 p/m. I jumped through all their hoops, and they said call them back in 30 days. I did. They said they hadn't made a decision yet, call them at 60 days. I did...same answer, call them at 90 days. I did...same answer, call them at 120 days. Hey, I fell for it, I tried to call them at 120 days. When you call, you get a machine. You have to punch in your account # and the last 4 # of your SS#. Then they know who's calling, and you listen to elevator music until a person answers. This time, I did all that and the machine disconnected me. I tried two more times with the same result. Hey, I'm naive, okay? I thought "They're having trouble with their line, I'll try again tomorrow." When I got the same result for a week, I contacted my lawyer. On my account page online, where I paid my mortgage every month, I was locked out saying it was deactivated until I called Chase, which I couldn't do. Catch-22. My lawyer contacted one of their lawyers. She said she'd find out what was going on and get back to him. It's been two years, and he hasn't heard from her or been able to contact her again. Please explain to me now who's being unreasonable and causing the problems? Or how any of this was MY fault? Or who actually has the "morality problems"? The banks and mortgage companies caused all our problems, their continuing to exacerbate our problems, by blocking any attempts by this administration to alleviate our problems, the Republicans are aiding the banks in making the problems worse. By continuing your whining about how all this is "our" fault, you're allowing them to make the problem even worse. Pretty soon, I hope, you will finally realize that maybe all of our problems are actually "your" fault.
#1.64 - Tue May 1, 2012 7:13 PM EDTI bought my home (foreclosed due to a divorce) 19 years ago (1993) for $100,000 (rounded numbers). in 2006, I had $204,000 in EQUITY (value, $304,000). My house is a 1978 split level. By 2006, it badly needed a new furnace (barely limping along and wasting tons of oil), new windows (old windows you could see the curtains blow when the wind blew) a new sliding back door (the old bronze one couldn't be fixed anymore) and a new roof (it didn't leak, but this necessitated everything when my insurance company saw curling asphalt shingles and said they were going to drop my insurance if I didn't get it replaced). We decided as long as we were doing this, we might as well get the kitchen updated, (was 'contractor special' junk cabinets and counters and sink, worn out appliances, and no dishwasher). Took out $140,000 in equity...now owed $240,000...mortgage went from $950 p/m to $1635 p/m. I paid my own taxes and insurance. No problems. Then came Bush's 2008. My house dropped from $304,000 to $230,000. I didn't like losing the remaining $64,000 in equity, but since we had no intentions of selling the house, and I saw things like DeMarco apparently thought, I decided, I did take out that equity and benefited from it, so I owe it back. Come 2009, it got worse than expected. My wife's income (she works in MRI in a hospital, one of those jobs that was supposedly recession proof) lost hours, let alone overtime. The mortgage now became a hardship. Not only did we fall behind on a few payments, at that time our small town (their treasurer embezzled almost 2 million dollars, when they caught him, he went to prison but they never recovered any money) cried to our mortgage company (Chase) that they wanted tax money now! (They did this with all residents, not just us) When I need money, I have to sacrifice something...when the governmnt needs it, thy just change the rules and take it. When we couldn't magically come up with $5,000 on demand,Chase slammed us into an escrow program and paid the taxes without our consent. Now we owed $1635 mortgage, $400 p/m escrow for yearly taxes, plus another $400 p/m for the taxes that they paid. My wife's income stabilized and we got back on our feet, but the 'mortgage payment' was now $2435 p/m. We couldn't do that. Now here's where it gets good.
I called Chase. I didn't ask for a mortgage reduction type of modification. I just asked them to apply the missed payments, and the escrow they paid, to the end of the loan, stop paying the taxes (I would resume paying them as I had for 15 years with no problems, the town's problems were over now) and I would simply continue to pay my $1635 p/m. I jumped through all their hoops, and they said call them back in 30 days. I did. They said they hadn't made a decision yet, call them at 60 days. I did...same answer, call them at 90 days. I did...same answer, call them at 120 days. Hey, I fell for it, I tried to call them at 120 days. When you call, you get a machine. You have to punch in your account # and the last 4 # of your SS#. Then they know who's calling, and you listen to elevator music until a person answers. This time, I did all that and the machine disconnected me. I tried two more times with the same result. Hey, I'm naive, okay? I thought "They're having trouble with their line, I'll try again tomorrow." When I got the same result for a week, I contacted my lawyer. On my account page online, where I paid my mortgage every month, I was locked out saying it was deactivated until I called Chase, which I couldn't do. Catch-22. My lawyer contacted one of their lawyers. She said she'd find out what was going on and get back to him. It's been two years, and he hasn't heard from her or been able to contact her again. Please explain to me now who's being unreasonable and causing the problems? Or how any of this was MY fault? Or who actually has the "morality problems"? The banks and mortgage companies caused all our problems, their continuing to exacerbate our problems, by blocking any attempts by this administration to alleviate our problems, the Republicans are aiding the banks in making the problems worse. By continuing your whining about how all this is "our" fault, you're allowing them to make the problem even worse. Pretty soon, I hope, you will finally realize that maybe all of our problems are actually "your" fault.
Jax A,So the argument is 1) "you don't lose your home" and 2) "your neighborhood has less foreclosures so your property value stays higher."
You asked: "How will it work for people who are current on their mortgages and the value of their homes have fallen?
How will it work for people who paid off their mortgages and the value of their home has also gone down?"
For those of us with the good fortune to have stayed current; we may be paying more, but we are not losing our homes. On the other hand, many of us are trapped in those homes by an inability to sell them without raising $1k's or $10k's of extra dollars to repay the balance of the mortgage. And each of the homes which go into foreclosure depress the market price of our homes, worsening our trap. So we sit, waiting for the next crisis to put us in the delinquent status as well.
For those with no mortgage but devalued houses, the spiral works the same way. Each passing month of more and more foreclosures places more downward pressure on one of their greatest assets. While I don't believe that we should consider our homes as an investment, like the realtors all tout; in reality, houses are the largest single asset held by the vast majority of home-owners in America. And as long as the glut of houses in foreclosure or legal limbo continues, the market for those houses will remain constrained at low prices.
THIS is the argument for fairness?? Seriously? Because at the end of the day, if you reduce the principal for some people (whether they've genuinely fallen on bad times or they CAN afford to pay but choose not to and opt for this "reduction of principal") but not for others, BOTH OF THE ABOVE ARE STILL TRUE...it's just some people are paying full value of what they actually agreed to, and others are not.
So again, how is this fair?
- 1 vote
If you can pay your mortgage with no help, that's great. You have no reason to be resentful of people who find themselves in a once in a generation economic crisis.It's not about being resentful, it's about how to apply something fairly.
So far, I've read a lot of sob stories about how everything is the banks' fault (including people losing their jobs and their assorted health crises , etc., which of course, is always the banks' fault) but not a single answer as to how to apply this "principal reduction" fairly.
I've heard from two posters "oh, you get to keep your house" and "your property values won't go down" but at the end of the day, those given the "reduction" got to keep their house too, and the neighborhood's values didn't go down, either.... the difference being they don't have to pay what they signed a contract for while the others do (or already did).
But I do want clarification from people making the "oh, you get to keep your house" argument. Are you saying those who are current and can afford their houses, and were responsible throughout SHOULD NOT get a "principal reduction?" If not, why?
And since I have to lead quite a few people down the logical path that eludes them so greatly...if you answer the opposite, and say "well, OK, yes the responsible people should get it too".... then what? How will any bank be able to enforce any signed loan or contract if they know the people who signed can just get a reduction after the fact?
Is there a particular reason why people can't answer these questions? Are they conceptually that difficult?
How will any bank be able to enforce any signed loan or contract if they know the people who signed can just get a reduction after the fact?People aren't seeking a reduction just because they want to. The reduction is the penalty Banks pay for ripping people off, causing them to lose jobs, devaluing their savings and pensions. If Banks stop indulging in criminal activity, no one will seek damages.
- 2 votes
Hi steel toed boot,
I can't take all you wrote for granted as it it only your side. I'm sure Chase has a different perspective on the facts of your particular case. But IF what you say is exactly as it all occurred then your rememdy is simple: Chase has violated the contract you signed with them, and you can compel them to obey that contract. If taking those tax monies was not permissible in your contract then Chase violated the contract there too, and while there may be no actual harm since it is a tax you seem to imply you would have had to pay anyhow, they had no legal power to take either tax amount from you, but particularly the previously paid taxes you imply Chase paid on your behalf.
It is this last part, and maybe you weren't clear or I didn't understand properly what you wrote, along with your concluding remark, that makes me highly skeptical that you have told the entire truth about your own situation. Banks simply do not pay someone's taxes and then, later, collect them in installments. The failure to pay taxes wouldn't be a bank's fault, per se, unless they had previously collected the money and then misappropriated it, but even there the local governing authority would come after you, not the bank. So it is all over America. So your story doesn't ring exactly true.
But your conclusion, that republicans and banks are working together to make the problem worse, really puts the final detail on your disingenuity. I don't need to defend banks, or republicans, to make the case. I asked the question before and no one, really, will be able to answer it with anything remotely connected to economics or finance, but it's this...Why would a bank do that which will cost it more money if the solution to all these various problems is so simple and obvious, and opposite of what the bank is doing, if the bank simply cares about its bottom line and nothing else?
It isn't that I think you are a liar, but I do think there is more to your story that if we knew it would put into doubt the entirety of it while at the same time probably indicting you as more a partisan hack than a homeowner citizen seriously looking to fix the problem. Never the less, this isn't all the fault of homebuyers, or of banks, or of mortgage companies, or of RE agents and brokers, or of even the government. It is, to varying degrees depending on the situation, the fault of all the parties involved. I disagreed with the bank bailouts. And not just because I knew that plenty of Americans would demand their own free stuff (all paid for by the unborn grandkiddies, you know), but for the very reason I oppose bailing out homeowners now: Without negative consequences we can never learn not to repeat our dumb policies of the past.
I would rather we let this market find its true value, and let the financial chips fall where they may, so that people might LEARN from what has happened. What are we learning today? Not much except that most Americans, it seems, think it's entirely appropriate to steal money from people not yet even born so that we can live beyond our means today. And, yep, that is immoral.
I can't take all you wrote for granted as it it only your side. I'm sure Chase has a different perspective on the facts of your particular case. But IF what you say is exactly as it all occurred then your rememdy is simple: Chase has violated the contract you signed with them, and you can compel them to obey that contract. If taking those tax monies was not permissible in your contract then Chase violated the contract there too, and while there may be no actual harm since it is a tax you seem to imply you would have had to pay anyhow, they had no legal power to take either tax amount from you, but particularly the previously paid taxes you imply Chase paid on your behalf.
It is this last part, and maybe you weren't clear or I didn't understand properly what you wrote, along with your concluding remark, that makes me highly skeptical that you have told the entire truth about your own situation. Banks simply do not pay someone's taxes and then, later, collect them in installments. The failure to pay taxes wouldn't be a bank's fault, per se, unless they had previously collected the money and then misappropriated it, but even there the local governing authority would come after you, not the bank. So it is all over America. So your story doesn't ring exactly true.
But your conclusion, that republicans and banks are working together to make the problem worse, really puts the final detail on your disingenuity. I don't need to defend banks, or republicans, to make the case. I asked the question before and no one, really, will be able to answer it with anything remotely connected to economics or finance, but it's this...Why would a bank do that which will cost it more money if the solution to all these various problems is so simple and obvious, and opposite of what the bank is doing, if the bank simply cares about its bottom line and nothing else?
It isn't that I think you are a liar, but I do think there is more to your story that if we knew it would put into doubt the entirety of it while at the same time probably indicting you as more a partisan hack than a homeowner citizen seriously looking to fix the problem. Never the less, this isn't all the fault of homebuyers, or of banks, or of mortgage companies, or of RE agents and brokers, or of even the government. It is, to varying degrees depending on the situation, the fault of all the parties involved. I disagreed with the bank bailouts. And not just because I knew that plenty of Americans would demand their own free stuff (all paid for by the unborn grandkiddies, you know), but for the very reason I oppose bailing out homeowners now: Without negative consequences we can never learn not to repeat our dumb policies of the past.
I would rather we let this market find its true value, and let the financial chips fall where they may, so that people might LEARN from what has happened. What are we learning today? Not much except that most Americans, it seems, think it's entirely appropriate to steal money from people not yet even born so that we can live beyond our means today. And, yep, that is immoral.
- 1 vote
Hi blue burner,
Absent evidence of fraud or extortion or some other criminal action, none of which seems to have any evidence to support the claim, how was anyone "ripped off"? People bought these homes voluntarily, they sought those mortgages voluntarily, they signed all the documents voluntarily. The agent selling the home had no duty to tell people that the market value would fall and so they shouldn't buy. The lender selling the mortgage had no duty to tell people that interest rates might fall, or that the value of homes might decline and they might not be able to pay their loan, and so they shouldn't get the loan.
But they all did have the duty to inform buyers that these things could happen, and everyone who buys a home signs lots of papers which disclose all of this. But no one had a duty to tell these buyers they should not buy. So who was ripped off?
Absent evidence of fraud or extortion or some other criminal action, none of which seems to have any evidence to support the claim, how was anyone "ripped off"? People bought these homes voluntarily, they sought those mortgages voluntarily, they signed all the documents voluntarily. The agent selling the home had no duty to tell people that the market value would fall and so they shouldn't buy. The lender selling the mortgage had no duty to tell people that interest rates might fall, or that the value of homes might decline and they might not be able to pay their loan, and so they shouldn't get the loan.
But they all did have the duty to inform buyers that these things could happen, and everyone who buys a home signs lots of papers which disclose all of this. But no one had a duty to tell these buyers they should not buy. So who was ripped off?
- 1 vote
Absent evidence of fraud or extortion or some other criminal action, none of which seems to have any evidence to support the claim, how was anyone "ripped off"?Exactly! The terms of the contract (interest rate, payment information, loan terms) were spelled out in the loan and people willingly signed these loans. Just because a historic bubble burst, doesn't mean people don't have to honor their contracts and the terms of the contract are null and void just because the value of your house went down. Look at all the people who had internet stocks in the late 90s... did they get anything when the value of their stocks went down because of that bubble?
And the bank asking you to honor what you agreed to is not "ripping you off" either.
People should be careful about crying about what they want too loudly. If the government keeps getting in the way and introducing these RIDICULOUS ideas like "principal reduction," who do you think it's going to harm the most?
The banks? Don't kid yourself, like any business, the banks will adapt and find ways to be profitable and survive. So, hypothetically speaking, now "principal reduction" becomes some accepted way of doing business (let's hope not!) then the banks will make everyone put 40%-50% down on any house so they can cover the possible loss...OR.... maybe loans will then be written to stipulate that if the homeowner can have their principal reduced because the value of the house went down...that the bank can now increase principal and charge you more for your mortgage because the value of the house went up? ... OR.... they'll just stop loaning money for house purchases altogether, or issue loans solely to people with 825+ credit scores?
You think the banks will allow themselves to be the only party in a contract forced to take ALL the risk?
Dream on. The repercussions of "principal reduction" will not be something to look forward to.
- 1 vote
Uhhh,
Rich and Jax--Have you read the news about the govt case against the 5
biggest banks who decided to settle instead of going to court to defend
their innocence.? They're paying a lot of money if they didn't do
anything wrong. Ever heard of Countrywide? These bankers were devious
and blatantly fraudulent, not just to homeowners but to pension funds
and other buyers of their Mortgage Backed Securities.
We're not talking about normal market activity where value fluctuates according to natural economic cycles. We're talking about a Depression caused by Banker Greed and Fraud. They caused the problem, let them bear the penalties.
#1.71 - Wed May 2, 2012 10:03 AM EDTWe're not talking about normal market activity where value fluctuates according to natural economic cycles. We're talking about a Depression caused by Banker Greed and Fraud. They caused the problem, let them bear the penalties.
Hi blue burner,
Yes, I have some knowledge of those banks, as well as Countrywide. If there was evidence against them for fraud of some kind against mortgage borrowers we should be able to see it. There really isn't. There are undoubtedly many claims of technical violations, same as in the foreclosure mess, where someone didn't get every paper signed properly before acting, but this isn't fraud. As far as defrauding investors, that could be, though here again we don't really have evidence of much of it, not even with GS, but even if that were rampant it wouldn't have been fraud against the home BUYER, and so they shouldn't get some windfall.
But it could've meant that a pervasive fraud was underway, the type requiring collusion though (which again is not backed up by evidence, where such a fraud induced investors to continue to by MBSs so that the ability to continue to finance risky loans was made possible, so that people could have wrongly concluded the market had room to go up and so they should still buy, but that is a lot of supposition. It's interesting to me though, your reply, for two major reasons.
First, you still cannot accept that any home buyer is responsible for their own action, despite the fact that virtually everyone of them had all the facts and risks presented to them BEFORE they signed the contract. Do you really want to live in a country where people are rewarded for not being responsible? A basic truism of economics is that if you want more of something, subsidize it. So do you actually want more people to be irresponsible, because if not, why do you keep wanting to subsidize it?
Second, you completely ignore the incentives put into the system by the governments you elected to entice firms at all levels to act more risky than was rational. One simple example by way of a question. Had Fannie and Freddie, just those two entities alone, NOT bought up so much risky paper in the secondary market so that primary lenders either had to hold more risk themselves or find more investors to risk their cash in order to continue to sell risky loans to people unlikely to repay them if anything went south, that banks would have conintued to make all those risky loans? My answer is simple. Absolutely not. Had the market been able to operate without the interference of government policy through various ways, whether tax provisions, or chartering F and F to buy more garbage up, far fewer risky loans would have been made. Far fewer people would have overbought. Far fewer homes would have been foreclosed upon. The bubble itself would have been miniscule, if it existed at all. And you, today, would not be whining about trying to force banks to give you something you are not entitled to.
Yes, I have some knowledge of those banks, as well as Countrywide. If there was evidence against them for fraud of some kind against mortgage borrowers we should be able to see it. There really isn't. There are undoubtedly many claims of technical violations, same as in the foreclosure mess, where someone didn't get every paper signed properly before acting, but this isn't fraud. As far as defrauding investors, that could be, though here again we don't really have evidence of much of it, not even with GS, but even if that were rampant it wouldn't have been fraud against the home BUYER, and so they shouldn't get some windfall.
But it could've meant that a pervasive fraud was underway, the type requiring collusion though (which again is not backed up by evidence, where such a fraud induced investors to continue to by MBSs so that the ability to continue to finance risky loans was made possible, so that people could have wrongly concluded the market had room to go up and so they should still buy, but that is a lot of supposition. It's interesting to me though, your reply, for two major reasons.
First, you still cannot accept that any home buyer is responsible for their own action, despite the fact that virtually everyone of them had all the facts and risks presented to them BEFORE they signed the contract. Do you really want to live in a country where people are rewarded for not being responsible? A basic truism of economics is that if you want more of something, subsidize it. So do you actually want more people to be irresponsible, because if not, why do you keep wanting to subsidize it?
Second, you completely ignore the incentives put into the system by the governments you elected to entice firms at all levels to act more risky than was rational. One simple example by way of a question. Had Fannie and Freddie, just those two entities alone, NOT bought up so much risky paper in the secondary market so that primary lenders either had to hold more risk themselves or find more investors to risk their cash in order to continue to sell risky loans to people unlikely to repay them if anything went south, that banks would have conintued to make all those risky loans? My answer is simple. Absolutely not. Had the market been able to operate without the interference of government policy through various ways, whether tax provisions, or chartering F and F to buy more garbage up, far fewer risky loans would have been made. Far fewer people would have overbought. Far fewer homes would have been foreclosed upon. The bubble itself would have been miniscule, if it existed at all. And you, today, would not be whining about trying to force banks to give you something you are not entitled to.
- 1 vote
Hey blue burner,
I should've given you a direct answer about the settlement. Businesses very often settle cases for business reasons. $25 billion, structured as it is, isn't a very pricey amount for those banks in order to get 49 states plus the feds to go away. I think it is in all of their interests for this to be brushed under the rug, so to speak. The banks RATIONALLY took advantage of a system people like you likely voted for, over time, and that advantage looks ugly. And the various governments want money, and lots of the money goes to them, not to homeowners. The feds, for their part, don't really want people like you who consistently vote for ever more government to ever be able to connect the dots that because of all those "feel good" policies, like first buyer credits, mortgage interest deductions, CRA, and so on, all designed to get more people to buy into the American Dream, that you are now seeing your nation suffer economically, you are seeing individuals being financially ruined, and you are seeing many future generations, some not even born, getting saddled with the bill.
The LAST thing the federal government would want is for you to connect those dots. You might, well, vote for less government!
I should've given you a direct answer about the settlement. Businesses very often settle cases for business reasons. $25 billion, structured as it is, isn't a very pricey amount for those banks in order to get 49 states plus the feds to go away. I think it is in all of their interests for this to be brushed under the rug, so to speak. The banks RATIONALLY took advantage of a system people like you likely voted for, over time, and that advantage looks ugly. And the various governments want money, and lots of the money goes to them, not to homeowners. The feds, for their part, don't really want people like you who consistently vote for ever more government to ever be able to connect the dots that because of all those "feel good" policies, like first buyer credits, mortgage interest deductions, CRA, and so on, all designed to get more people to buy into the American Dream, that you are now seeing your nation suffer economically, you are seeing individuals being financially ruined, and you are seeing many future generations, some not even born, getting saddled with the bill.
The LAST thing the federal government would want is for you to connect those dots. You might, well, vote for less government!
- 1 vote
The
problem is not the Republicans. You guys have been listening to Obama's
propaganda machine again. De Marco was appointed by Obama not the
Republicans and it was done in a recess appointment. Obama and the
democrats are only interested in propaganda and blaming the Republicans.
The Republicans are not so good with propaganda so you are only hearing
the Democrats side of the story. TARP was done by a Democrat led
Congress. TARP was designed to make sure that Tax payers did not lose
their savings and cost money to the taxpayer because of the FDIC
guarantee of $100,000 on all bank accounts. Then When Obama got elected
and had a super majority in congress instead of looking for ways to
create jobs, fix what went wrong with the Housing market, and stabilize
the economy. He started only worrying about Obamacare. That is why we
are where we are today. Obama could have gotten anything he wanted
passed in Congress, but he was only interested in blaming Bush for the
problems and not about fixing it. That was the change you wanted. that
is what happens when elect someone who is not qualified to be President
and has no leadership experience. He took over companies and Banks and
decided how they can run. When he was running Citibank, AIG, GMAC, and
the other banks, Obama could have had them forgive every mortgage if he
wanted. He chose to do nothing because he can't blame the Republicans
for everything that goes wrong.
Congress should force all banks who have Freddie Mac, Fannie Mae, HUD insured, and other federally backed mortgages to lower the interest rate to the Rate they pay when they borrow money from the FED, which is currently 0 or to the highest interest rate paid on a savings account in those banks, which is all under 1%. This will decrease all borrowers monthly payments as there will be no interest. It also increases taxes because if you are not paying Mortgage Interest, you cannot claim a deduction for it. Now you solved 2 problems. People are paying more taxes and there are less foreclosures.
Congress should force all banks who have Freddie Mac, Fannie Mae, HUD insured, and other federally backed mortgages to lower the interest rate to the Rate they pay when they borrow money from the FED, which is currently 0 or to the highest interest rate paid on a savings account in those banks, which is all under 1%. This will decrease all borrowers monthly payments as there will be no interest. It also increases taxes because if you are not paying Mortgage Interest, you cannot claim a deduction for it. Now you solved 2 problems. People are paying more taxes and there are less foreclosures.
- 1 vote
Hi Rich;
On those taxes, yes there is more, but that post was so long already that I skimmed some detail, Everything about Chase was absolutely true, including my lawyer being snubbed (I guess you'd call it) by one of their lawyers.
As far as the taxes...for 15 years I paid my property taxes myself. When I bought this house, it was a foreclosure and I bid on it and won. It came with a 7% VA mortgage, which is why I bought it since, at the time (1993), interest rates were double digit, and I said to my wife "We are NEVER going to see 7% again!" Yeah, I was wrong. They had an escrow that paid the taxes. A few months later, they sold my mortgage to Longbeach Mortgage Company who didn't carry escrow services, so I was on my own and began paying my taxes on my own. Anyway, taxes are collected in July and December. It was the one before Christmas that was always the difficult one to pay, what with heating oil too. So I talked to the tax clerk (small town...everybody knew each other then) and asked, "If other taxes aren't due until April 15th, why do I have to pay my property taxes by December 21st? And July?" She said it was because of the schools (the biggest property tax drain up here) and the way they 'want' their money. I said why can't I pay everything by February or early March (when I get my income tax return. We had our withholding set at the highest rate, and would always get 9-10 thousand returned) She said that we could legally do that, but because our laws are catered to the whims of the school system, I would have to pay penalties and interest if I did it that way. These amounted to just over $200, so I said to make our lives easier, we'd do that. So as soon as I'd get our refund (nowadays as quickly as 2 weeks after filing) I'd go to town hall and pay my property tax. For 15 year, I never had a problem.
Then, as I mentioned, our town treasurer absconded with over 2 million, which they never recovered when they sent him to prison. Either he's got it stashed for when he gets out, or he'd already spent it. Anyway, the schools cried for money, our illustrious state told our illustrious town to deal with it without any help from them. I guess they weren't insured, so they 'demanded' prompt payment of the taxes...December 21st. For us, that meant the whole year's worth since we hadn't paid July either. The original town tax clerk had long since retired (she was an old lady when I made the arrangement), the current one only elected three years before the embezzlement. She never even contacted me, she went directly to the mortgage company on file (Chase) and told them the town was going to place a tax lien on my house. They never contacted me either. They created an escrow account (which I had never had since the VA mortgage) and paid the taxes to avoid the lien. (When it comes to taking money, the government trumps banks) Nobody told me anything. I got my income tax refund, toddled down to town hall to pay my taxes, and was told they'd already been paid. I said, that's impossible, who paid them? Chase. I said that's impossible again....they don't pay my taxes, I do. Then I got a little bit of the story from her, a little from our local newspaper, and a surprise from Chase...I was now the proud owner of an escrow account. What I should have done was take the money I was going to pay town hall and pay Chase. But I was already a few payments behind, and they were going to apply any money I gave them towards the mortgage. I should have let them do that, but I didn't. That's when I consulted that lawyer about getting 'slammed' into an escrow account I didn't sign up for. He told me they have the right to do that to save their interest in the property, because the all-powerful government can take it on a tax lien. So they did what they had to do to save their investment, then came after me. Best I could get, my original $1635 mortgage, plus $400 for the future year's tax escrow, plus another $400 for 1 year for the tax they'd already paid. Being already hurt by the recession, $2435 per month was impossible when $1635 alone was a hardship. Things went south from there real quick. By the time my wife got her hours back, it was hopeless. Hence the attempt at a mortgage deal, and everything about that was gospel.
To your question...why do they do these things? I don't know. I was one of those people who was skeptical about these homeowners with stories like this about banks and mortgage companies. I too said they can't do this, and besides, it doesn't make sense, it would be in their best interest simply to work with people and help them rather than foreclose, especially since the housing market has been so devastated. Why do they want to end up with houses they can't sell without taking a loss? Because it didn't make any economic sense, I too did not believe these homeowners, even though there were so many of them making these claims. Like I said, what happened to me was a shocker at the time, but now what all these homeowners were saying is being corroborated in the written news, the network news, Nightline, 20/20, etc., and my own personal experience. I'm currently in Chapter 13 bankruptcy trying to save my house. Guess what, they don't even listen to the courts. Since Bush's 2005 Fair Credit Act (can't recall its actual name) signed into law right after winning re-election, with little surprises hidden in it, they no longer have to according to my bankruptcy lawyer. Everything is now geared in favor of the mortgage companies, banks and credit card companies. I'm only partisan because I've been beaten into submission and have seen the how and why of it all. I guess until it happens to you, and you're right in the middle of it, you can be just as skeptical as I was. If you ever find yourself where I am, these commentors who side with the banks will annoy you too.
Damn...another book here!
On those taxes, yes there is more, but that post was so long already that I skimmed some detail, Everything about Chase was absolutely true, including my lawyer being snubbed (I guess you'd call it) by one of their lawyers.
As far as the taxes...for 15 years I paid my property taxes myself. When I bought this house, it was a foreclosure and I bid on it and won. It came with a 7% VA mortgage, which is why I bought it since, at the time (1993), interest rates were double digit, and I said to my wife "We are NEVER going to see 7% again!" Yeah, I was wrong. They had an escrow that paid the taxes. A few months later, they sold my mortgage to Longbeach Mortgage Company who didn't carry escrow services, so I was on my own and began paying my taxes on my own. Anyway, taxes are collected in July and December. It was the one before Christmas that was always the difficult one to pay, what with heating oil too. So I talked to the tax clerk (small town...everybody knew each other then) and asked, "If other taxes aren't due until April 15th, why do I have to pay my property taxes by December 21st? And July?" She said it was because of the schools (the biggest property tax drain up here) and the way they 'want' their money. I said why can't I pay everything by February or early March (when I get my income tax return. We had our withholding set at the highest rate, and would always get 9-10 thousand returned) She said that we could legally do that, but because our laws are catered to the whims of the school system, I would have to pay penalties and interest if I did it that way. These amounted to just over $200, so I said to make our lives easier, we'd do that. So as soon as I'd get our refund (nowadays as quickly as 2 weeks after filing) I'd go to town hall and pay my property tax. For 15 year, I never had a problem.
Then, as I mentioned, our town treasurer absconded with over 2 million, which they never recovered when they sent him to prison. Either he's got it stashed for when he gets out, or he'd already spent it. Anyway, the schools cried for money, our illustrious state told our illustrious town to deal with it without any help from them. I guess they weren't insured, so they 'demanded' prompt payment of the taxes...December 21st. For us, that meant the whole year's worth since we hadn't paid July either. The original town tax clerk had long since retired (she was an old lady when I made the arrangement), the current one only elected three years before the embezzlement. She never even contacted me, she went directly to the mortgage company on file (Chase) and told them the town was going to place a tax lien on my house. They never contacted me either. They created an escrow account (which I had never had since the VA mortgage) and paid the taxes to avoid the lien. (When it comes to taking money, the government trumps banks) Nobody told me anything. I got my income tax refund, toddled down to town hall to pay my taxes, and was told they'd already been paid. I said, that's impossible, who paid them? Chase. I said that's impossible again....they don't pay my taxes, I do. Then I got a little bit of the story from her, a little from our local newspaper, and a surprise from Chase...I was now the proud owner of an escrow account. What I should have done was take the money I was going to pay town hall and pay Chase. But I was already a few payments behind, and they were going to apply any money I gave them towards the mortgage. I should have let them do that, but I didn't. That's when I consulted that lawyer about getting 'slammed' into an escrow account I didn't sign up for. He told me they have the right to do that to save their interest in the property, because the all-powerful government can take it on a tax lien. So they did what they had to do to save their investment, then came after me. Best I could get, my original $1635 mortgage, plus $400 for the future year's tax escrow, plus another $400 for 1 year for the tax they'd already paid. Being already hurt by the recession, $2435 per month was impossible when $1635 alone was a hardship. Things went south from there real quick. By the time my wife got her hours back, it was hopeless. Hence the attempt at a mortgage deal, and everything about that was gospel.
To your question...why do they do these things? I don't know. I was one of those people who was skeptical about these homeowners with stories like this about banks and mortgage companies. I too said they can't do this, and besides, it doesn't make sense, it would be in their best interest simply to work with people and help them rather than foreclose, especially since the housing market has been so devastated. Why do they want to end up with houses they can't sell without taking a loss? Because it didn't make any economic sense, I too did not believe these homeowners, even though there were so many of them making these claims. Like I said, what happened to me was a shocker at the time, but now what all these homeowners were saying is being corroborated in the written news, the network news, Nightline, 20/20, etc., and my own personal experience. I'm currently in Chapter 13 bankruptcy trying to save my house. Guess what, they don't even listen to the courts. Since Bush's 2005 Fair Credit Act (can't recall its actual name) signed into law right after winning re-election, with little surprises hidden in it, they no longer have to according to my bankruptcy lawyer. Everything is now geared in favor of the mortgage companies, banks and credit card companies. I'm only partisan because I've been beaten into submission and have seen the how and why of it all. I guess until it happens to you, and you're right in the middle of it, you can be just as skeptical as I was. If you ever find yourself where I am, these commentors who side with the banks will annoy you too.
Damn...another book here!
- 2 votes
"...that
because of all those "feel good" policies, like first buyer credits,
mortgage interest deductions, CRA, and so on, all designed to get more
people to buy into the American Dream, that you are now seeing your
nation suffer economically, you are seeing individuals being financially
ruined, and you are seeing many future generations, some not even born,
getting saddled with the bill."
Really Rich? I thought the meltdown occurred because the banks and mortgage companies were packaging up mortgages and selling them as derivatives, trying to make profit upon profit that only existed on paper at that point. When the market collapsed under its own weight, even the insurance companies (AIG?) couldn't bail out their losses. Had there been a run on their money by people and businesses, the banks would have defaulted and we'd have been in another Great Depression (not that we're far away from it) At least, that's how I heard it. I didn't hear anything about the people being involved until after the meltdown, and people began losing their jobs, their homes, their 401Ks, etc., like...oh...me! Oh, and as we all know, the people's money was given to the banks so they could stay in business.
Really Rich? I thought the meltdown occurred because the banks and mortgage companies were packaging up mortgages and selling them as derivatives, trying to make profit upon profit that only existed on paper at that point. When the market collapsed under its own weight, even the insurance companies (AIG?) couldn't bail out their losses. Had there been a run on their money by people and businesses, the banks would have defaulted and we'd have been in another Great Depression (not that we're far away from it) At least, that's how I heard it. I didn't hear anything about the people being involved until after the meltdown, and people began losing their jobs, their homes, their 401Ks, etc., like...oh...me! Oh, and as we all know, the people's money was given to the banks so they could stay in business.
- 2 votes
Well,
what can I say? Rich, you've come up with a nice narrative, but nobody
except a banker would believe it. There's just been too much
information, documented evidence, about what the banks did to get the
country in this predicament. To say that bank malfeasance had nothing
to do with this depression, which it is for many, is ludicrous. Read the
settlement agreement against them, which lists and describes in detail
every one of their indictable acts. Banks gambled at the high stakes
table and lost, bringing the walls down around them.
And that old canard that the Community Reinvestment Act forced banks to loan money to any Joe off the street is just a zombie lie that Bank Defenders throw around. Nobody can force banks to loan money to anyone. Period. Ever. It takes all of 2 seconds to access a credit report to show why someone's ineligible for a loan.
Do I have good things to say about the govt's part in this ginormous mess? No. I wouldn't have bailed the banks out at all. I would instead had paid down every homeowner's mortgage, which would have been cheaper than bailing out the banks.
Watch Frontline. They've done an excellent documentary on the financial services industry in this country and the malfeasance of the banking sector.
Thanks for joining in, Steel-Toed. I sincerely hope things get better for you and your family.
And that old canard that the Community Reinvestment Act forced banks to loan money to any Joe off the street is just a zombie lie that Bank Defenders throw around. Nobody can force banks to loan money to anyone. Period. Ever. It takes all of 2 seconds to access a credit report to show why someone's ineligible for a loan.
Do I have good things to say about the govt's part in this ginormous mess? No. I wouldn't have bailed the banks out at all. I would instead had paid down every homeowner's mortgage, which would have been cheaper than bailing out the banks.
Watch Frontline. They've done an excellent documentary on the financial services industry in this country and the malfeasance of the banking sector.
Thanks for joining in, Steel-Toed. I sincerely hope things get better for you and your family.
- 1 vote
Hey steel toed boot,
I think you missed one point and kind of side-stepped the other. The government can't go to a bank you do business with and make a claim for taxes against you and force the bank to then recoup the taxes through a monthly payment plan. This part of your story simply could not have legally happened. Something in this case might have happened, but it can't be what you claimed. What bank would front the money for someone else's bill, without a contract to do so, and then demand you pay the bill back in the hope only that you would? Um, no.
And you side-stepped the other point about why banks would do so much against their own self-interest if all they care about is their own self-interest. I think you are missing something here, specifically, that principal reductions as a blanket forced policy are certainly not a financially rational path for the banks to follow. Else they would do it in a heartbeat.
Hi blue burner,
Prosecutors, in this case AGs, allege all sorts of things, but this isn't the same as proof they happened. Don't confuse a complaint with a verdict. But like steel toed, you miss the larger point. Banks LOVED the system that was in place, and for all practical purposes REMAINS in place. They didn't want, and don't want, the kind of governmentally subsidized system which brought them billions in profits, far more than the $25 billion they settled with those governments for, to go away. The government has every incentive to blame banks. Banks don't vote, homeowners do. But there is a money story here too, which is that Fannie and Freddie were used, unfortunately, as a cash cow for democrat campaigns for office, or as a reward for service to the democratic party. Franklin Raines was making tens of millions a year, and passing along to DNC coffers even more.
You also miss the point about the CRA and the other incentives for people to operate outside of financially rational zones. CRA didn't force banks to lend money, nor did I make that claim. It incentivized loaning money. And if loaning to someone who is high risk, what better to do but to sell the loan to someone else, much of which was bought up by Fannie and Freddie, which were operating within their government charters to do what they could to increase home ownership in the USA. The point is that these policies created the bubble where some people bought above their financial heads, where some banks loaned to high risk borrowers knowing a profit was to be scored since they'd sell the note almost immediately, and so when values began to decline, like a house of cards it all began to fall apart. Very few people actually broke any laws. But almost everyone violated the laws of economics.
#1.78 - Wed May 2, 2012 6:11 PM EDTI think you missed one point and kind of side-stepped the other. The government can't go to a bank you do business with and make a claim for taxes against you and force the bank to then recoup the taxes through a monthly payment plan. This part of your story simply could not have legally happened. Something in this case might have happened, but it can't be what you claimed. What bank would front the money for someone else's bill, without a contract to do so, and then demand you pay the bill back in the hope only that you would? Um, no.
And you side-stepped the other point about why banks would do so much against their own self-interest if all they care about is their own self-interest. I think you are missing something here, specifically, that principal reductions as a blanket forced policy are certainly not a financially rational path for the banks to follow. Else they would do it in a heartbeat.
Hi blue burner,
Prosecutors, in this case AGs, allege all sorts of things, but this isn't the same as proof they happened. Don't confuse a complaint with a verdict. But like steel toed, you miss the larger point. Banks LOVED the system that was in place, and for all practical purposes REMAINS in place. They didn't want, and don't want, the kind of governmentally subsidized system which brought them billions in profits, far more than the $25 billion they settled with those governments for, to go away. The government has every incentive to blame banks. Banks don't vote, homeowners do. But there is a money story here too, which is that Fannie and Freddie were used, unfortunately, as a cash cow for democrat campaigns for office, or as a reward for service to the democratic party. Franklin Raines was making tens of millions a year, and passing along to DNC coffers even more.
You also miss the point about the CRA and the other incentives for people to operate outside of financially rational zones. CRA didn't force banks to lend money, nor did I make that claim. It incentivized loaning money. And if loaning to someone who is high risk, what better to do but to sell the loan to someone else, much of which was bought up by Fannie and Freddie, which were operating within their government charters to do what they could to increase home ownership in the USA. The point is that these policies created the bubble where some people bought above their financial heads, where some banks loaned to high risk borrowers knowing a profit was to be scored since they'd sell the note almost immediately, and so when values began to decline, like a house of cards it all began to fall apart. Very few people actually broke any laws. But almost everyone violated the laws of economics.
Hi Rich;
I'll make this one short, I promise. I don't know what state you're in, state laws may be different, but I didn't think they were. I'm in NH, and here's how it works, trust me, I'm living it. The town governments in this state can slap a tax lien on your property. I thought that I would be notified, but I wasn't. With a lien, if it isn't paid, they take the property. It's like a foreclosure, but they are all-powerful, more so than the bank. And they went to the real owners (since they hold the mortgage until I pay it off), Chase, and said that they would take the property. They don't want to, of course, they wanted money...fast. Now Chase did not pay the taxes for ME, out of the goodness of their heart. They paid the taxes so that they didn't lose the property to the town. Against the government, they're like us against the banks...helpless and with no recourse.
So I owe these taxes, I'm not trying to say I don't. I just thought that they could not create an escrow account without a contract with me. But the lawyer said yes, they can do practically anything they want because I owe them. Maybe it's a loan where you are, but here on my mortgage statements it is called an escrow account. As far as paying the paid taxes at $400 a month, I don't know if that's routinely done or it was a favor to me, but unfortunately, it was a favor I couldn't afford. And the $400 per month for the future taxes, they can do that because I am deemed a future risk thanks to the damned town lien.
As far as those principle reductions, that's not what I was talking about. I was referring to foreclosures on houses that aren't worth what's owed on them. I think, rather than take the loss, they ought to seriously (not just lip service) try to help the owner stay in the house and continue paying what he agreed to, even if it meant extending the life of the loan from 30 years to 35 years, or reducing the interest and add it on the end or something. I don't agree with principle reduction, but if the pilot program saved the amount they say it did, then they should try doing it. In any case, I believe I owe what I agreed to, I'd just like it tacked onto the end of the mortgage and resume my normal payments. But they're basically stiffing me.
#1.79 - Wed May 2, 2012 9:52 PM EDTI'll make this one short, I promise. I don't know what state you're in, state laws may be different, but I didn't think they were. I'm in NH, and here's how it works, trust me, I'm living it. The town governments in this state can slap a tax lien on your property. I thought that I would be notified, but I wasn't. With a lien, if it isn't paid, they take the property. It's like a foreclosure, but they are all-powerful, more so than the bank. And they went to the real owners (since they hold the mortgage until I pay it off), Chase, and said that they would take the property. They don't want to, of course, they wanted money...fast. Now Chase did not pay the taxes for ME, out of the goodness of their heart. They paid the taxes so that they didn't lose the property to the town. Against the government, they're like us against the banks...helpless and with no recourse.
So I owe these taxes, I'm not trying to say I don't. I just thought that they could not create an escrow account without a contract with me. But the lawyer said yes, they can do practically anything they want because I owe them. Maybe it's a loan where you are, but here on my mortgage statements it is called an escrow account. As far as paying the paid taxes at $400 a month, I don't know if that's routinely done or it was a favor to me, but unfortunately, it was a favor I couldn't afford. And the $400 per month for the future taxes, they can do that because I am deemed a future risk thanks to the damned town lien.
As far as those principle reductions, that's not what I was talking about. I was referring to foreclosures on houses that aren't worth what's owed on them. I think, rather than take the loss, they ought to seriously (not just lip service) try to help the owner stay in the house and continue paying what he agreed to, even if it meant extending the life of the loan from 30 years to 35 years, or reducing the interest and add it on the end or something. I don't agree with principle reduction, but if the pilot program saved the amount they say it did, then they should try doing it. In any case, I believe I owe what I agreed to, I'd just like it tacked onto the end of the mortgage and resume my normal payments. But they're basically stiffing me.
I
see his point (I heard a clip of him speaking a few weeks ago) that
homeowners who otherwise wouldn't or don't qualify for principal
reduction would have an incentive to stop making payments until they do,
which ultimately costs taxpayers more money instead of reducing
exposure. A little more information on what qualifies homeowners to
receive this benefit would be helpful to know for forming an opinion.
- 7 votes
#2 - Tue May 1, 2012 10:48 AM EDTA little more information on what qualifies homeowners to receive this benefit would be helpful to know for forming an opinion.And this is the very problem all the boneheads that think principal reduction is such a great idea don't want to address.
How can this be applied FAIRLY? It's surely not going to be just for people who can't pay their mortgages, is it? Home values went down for almost everyone, even those who can and do pay their mortgages on time. They get a principal reduction, too, right? What about the people who've paid their houses off in full, but the value of their home went down. What's in it for them?
Anyone?
- 7 votes
Rob,
I know people who have requested to have their loans modified and it's a
maze of papers and documents. I do believe people have to support their
claim when requesting a loan modification and stipulations do exist.
That said I feel Mr. DeMarco needs to be fired for two good reasons. One
is that he is suppose to follow established/agreed upon policy. He did
not follow policy as he chose to apply his own brand of ideology. If he
as it appears had an issue then he should have simply stepped down.
Secondly, Mr.DeMarco purposely hid and delayed responding to an inquiry
because he knew he acted on his own volition. He sure didn't help the
situation in any capacity and a U.S. agency head.
That said, I do agree with reducing mortgage principals for varied reasons. As some have stated this would stabilize home values, local and state economies while keeping people in their homes. I believe before pointing the finger entirely at homeowners consider what lenders have done. Why did lenders push for MERS before establishing reliability first? Why are so many loan documents incorrect or even illegal? Why have wrongful foreclosures taken place? Why have lenders been so aggressive to foreclosre regardless for something as little as $1.82 fee? Why are courts asking lenders and/or servicers to present documents supporting their claim to foreclose? Why after a major settlement agreeing to clean up their act would Wells Fargo continue to robo sign foreclosure documents? If I didn't know any better I'd say while everyone is arguing there is a land grab going on right under our noses. The lenders are attempting to gain ownership and control of a lot of properties. Why? Think about it. Decades ago when borrowers were underwater lenders did everything they could to keep them in their homes. What changed that they won't help homeowners now. What reason do they have for not keeping homeowners in their homes.
#2.2 - Tue May 1, 2012 3:36 PM EDTThat said, I do agree with reducing mortgage principals for varied reasons. As some have stated this would stabilize home values, local and state economies while keeping people in their homes. I believe before pointing the finger entirely at homeowners consider what lenders have done. Why did lenders push for MERS before establishing reliability first? Why are so many loan documents incorrect or even illegal? Why have wrongful foreclosures taken place? Why have lenders been so aggressive to foreclosre regardless for something as little as $1.82 fee? Why are courts asking lenders and/or servicers to present documents supporting their claim to foreclose? Why after a major settlement agreeing to clean up their act would Wells Fargo continue to robo sign foreclosure documents? If I didn't know any better I'd say while everyone is arguing there is a land grab going on right under our noses. The lenders are attempting to gain ownership and control of a lot of properties. Why? Think about it. Decades ago when borrowers were underwater lenders did everything they could to keep them in their homes. What changed that they won't help homeowners now. What reason do they have for not keeping homeowners in their homes.
More
evidence of the severity of corruption in our government. This
government agency was actually sabotaging the American Dream of home
ownership just like the other government agency that takes away peoples'
home to collect taxes. When the government works against the people,
the country falls apart. Don't the people in government understand that
if destroys the people it governs, it destroys itself?
- 13 votes
#3 - Tue May 1, 2012 10:52 AM EDT
Where
do you think the government gets money to pay for these programs? They
take it from those of us that are responsible with our money (namely
the middle and upper class).
Why is it ok for someone to come along and take money from me to pay for their mistakes?
Why is it ok for someone to come along and take money from me to pay for their mistakes?
- 2 votes
What
you fail to see here is that money is already being used for the
purpose of foreclosure which the article describes as being more costly
than a principle reduction. If Fannie and Freddie continue doing what
they are doing now it will cost all taxpayers more money. On top of that
principle reductions can only be done to 1st mortgages which is what
Fannie and Freddie control. So all the people commenting here about
people buying too much house or taking seconds or getting something for
nothing need to realize that reducing principle does not take away added
debt it simply saves taxpayers money on the loans that Fannie invested
in.
#3.2 - Tue May 1, 2012 3:24 PM EDT
And
it sets the precedence (or continues it) that people do not need to be
responsible because the taxpayers will bail them out.
As I said earlier, what about the losses I've incurred in the stock market? Is someone going to reimburse me for those funds?
At what point do people start taking personal responsibility for their actions. If there was fraud involved, then I agree with principle reductions, but from everything I've read, fraud is only a small percentage of the cases.
As I said earlier, what about the losses I've incurred in the stock market? Is someone going to reimburse me for those funds?
At what point do people start taking personal responsibility for their actions. If there was fraud involved, then I agree with principle reductions, but from everything I've read, fraud is only a small percentage of the cases.
- 2 votes
Ron,
Actually, you ought to read some of Ron Paul's thoughts on the source of government funds. While I have many, many disagreements with Mr. Paul, he is correct in saying that the government CREATES the money it needs to function. This is how we have always handled our operating budget. We issue bonds and T-bills (debt instruments) to raise the actual funds and use the tax revenue to repay that debt. Even Social Security is financed in this manner, with the payroll tax going into the General Fund (which actually pays the benefits) and any excess written as bonds to the agency. So all Americans end up paying for these actions in either higher taxes, inflated prices, and/or diminished government services.
Actually, you ought to read some of Ron Paul's thoughts on the source of government funds. While I have many, many disagreements with Mr. Paul, he is correct in saying that the government CREATES the money it needs to function. This is how we have always handled our operating budget. We issue bonds and T-bills (debt instruments) to raise the actual funds and use the tax revenue to repay that debt. Even Social Security is financed in this manner, with the payroll tax going into the General Fund (which actually pays the benefits) and any excess written as bonds to the agency. So all Americans end up paying for these actions in either higher taxes, inflated prices, and/or diminished government services.
- 1 vote
I
lost my job, and fought with BofA for over 18 months trying to simply
reduce the interest rate on my loan. They would not budge. I ended up
loosing the house after they took every single penny I had in payments
during the extended unemployment. They told me we cant do anything
until you have a job. When I finally found work, they said well now you
have a job, you dont need help. All I asked for was a reduction in my
interest rate. It was a fixed 30yr mortgage, not some smoke and mirrors
adjustable. I didnt qualify for any program according to them. My
family lost everything because of stupid practices like this. And all I
asked for was an interest rate reduction.
- 17 votes
#4 - Tue May 1, 2012 10:59 AM EDT
Joe,
it's even worse than that. I worked for a mortgage company that was
involved in the HAMP program to help homeowners. The company made it a
nightmare for the homeowners, then after months of sending paperwork in
and praying they would get relief, they were declined. As soon as they
were declined for the modification, the company went to work. Notices of
default, fees, attorney letters soon followed. Then they would
foreclose on the homeowner.
The company participated in the program cause the govt paid them to. They really didn't care about the people.....they used that trust to attack homeowners. It was sad to hear the crying on the other end of the phone, but the business made money for their wealthy owners and we got some crummy jobs.
The company participated in the program cause the govt paid them to. They really didn't care about the people.....they used that trust to attack homeowners. It was sad to hear the crying on the other end of the phone, but the business made money for their wealthy owners and we got some crummy jobs.
- 1 vote
I am split on this issue,
In principal a person should be held responsible for the decisions they make, if you are uninformed then, that is your risk.
However many of these underwater loans should of been stopped by the banks and so there trust was broken to uphold good banking standards, they are the professionals and therefore should ultimately be responsible for this.
That all being said, because of the banks failing to do there jobs properly, I would say by default that people in underwater mortgages should be assisted in someway. Even though I would prefer to see them all go down for being greedy and stupid.
In principal a person should be held responsible for the decisions they make, if you are uninformed then, that is your risk.
However many of these underwater loans should of been stopped by the banks and so there trust was broken to uphold good banking standards, they are the professionals and therefore should ultimately be responsible for this.
That all being said, because of the banks failing to do there jobs properly, I would say by default that people in underwater mortgages should be assisted in someway. Even though I would prefer to see them all go down for being greedy and stupid.
- 5 votes
#5 - Tue May 1, 2012 11:02 AM EDT
The same could be said about all the people that bought homes to try to flip them and make a profit...greedy and stupid.
People got fooled into believing a house was the only sure investment scheme.
#5.1 - Tue May 1, 2012 2:58 PM EDTPeople got fooled into believing a house was the only sure investment scheme.
Just
another examle of "shrinking the beast" during 2 terms of Bush the
younger. They were so busy getting government out of the private sectors
way that many of our Federal agencies were sacked and could not do the
job they were supposed to do. FEMA, Freddie, banking oversight,
oversight of the stockmarket, EPA and the FAA were all crippled during
the Bush years. The GOP congress is still at it today. There are roles
for these organizations but you can't run them so they can do thier job
if they're cut to the bone or loaded with cronnies who hate government
and try to cripple it every chance they get.
- 6 votes
#6 - Tue May 1, 2012 11:04 AM EDT
There
were plenty of politicians in BOTH parties that accurately forecast the
housing market collapse. It didn't take a PhD in economics to see that
housing prices were unsustainable.
You can act like it's a partisan issue if it makes you happy, but the reality is, mistakes were made by politicians in both parties (and presidents from both parties). There was plenty of money available for regulators to address something as obvious as the housing bubble years before it collapsed - but the reality is we (the voters) crucified any politician that made negative comments.
#6.1 - Tue May 1, 2012 2:51 PM EDTYou can act like it's a partisan issue if it makes you happy, but the reality is, mistakes were made by politicians in both parties (and presidents from both parties). There was plenty of money available for regulators to address something as obvious as the housing bubble years before it collapsed - but the reality is we (the voters) crucified any politician that made negative comments.
a moral hazard? lol....bailouts to failing companies in the trillions is a moral hazard
- 18 votes
#7 - Tue May 1, 2012 11:04 AM EDT
For the record: President Obama appointed Edward J. DeMarco acting director of the Federal Housing Finance Agency, which regulates Fannie Mae, Freddie Mac
- 3 votes
#8 - Tue May 1, 2012 11:06 AM EDT
For the record
"In December 2010, and President Barack Obama’s nomination to replace DeMarco, former North Carolina banking commissioner Joseph Smith, was approved by the Senate Banking Committee, with three Republican crossing the aisle to support the appointment. But the nomination was blocked by Republicans on the Senate floor, in part because they felt Smith would be too generous in support of homeowners seeking to modify loans held by the government"
"In December 2010, and President Barack Obama’s nomination to replace DeMarco, former North Carolina banking commissioner Joseph Smith, was approved by the Senate Banking Committee, with three Republican crossing the aisle to support the appointment. But the nomination was blocked by Republicans on the Senate floor, in part because they felt Smith would be too generous in support of homeowners seeking to modify loans held by the government"
- 12 votes
Yes
read that, but where does it say, "And President Obama admitted he
screwed up, will replace Demarco, and apologizes to the American
people"? Yeah that's what I thought! THAT is what we want then we will
be a little more cooperative. As it is he is trying to deflect his
responsibility by pointing fingers. We the people have had enough of
that from him.
- 1 vote
Yes
this president will apologize for making a mistake. He triedd to change
that but the GOP did not want to do that and the polls show he will win
again in November so dont be mad that Mccain?palin sticker will wear
off sooner or later!!
- 3 votes
Bob,
any nominated position must also be approved by congress. The
republican side of congress refused the nomination to replace Demarco.
Therefor, it's not Obama's fault, but the republican controlled majority of congress.
For some stupid reason, many people, including you, believe that the president can appoint anyone he wants to any position in the government. Read the story again. Says the republicans refused the nomination. And because of that, Demarco was not replaced.
Government has three rings. President, Congress, House. In order to get anything done, all 3 have to be pretty much in agreement.
Therefor, it's not Obama's fault, but the republican controlled majority of congress.
For some stupid reason, many people, including you, believe that the president can appoint anyone he wants to any position in the government. Read the story again. Says the republicans refused the nomination. And because of that, Demarco was not replaced.
Government has three rings. President, Congress, House. In order to get anything done, all 3 have to be pretty much in agreement.
- 2 votes
Pissedoffperson & KeyOrion -
The Democratic Majority in the Senate voted against nominating Mr. Smith. Republicans DO NOT control the Senate. The House of Representatives does not vote on nominees.
#8.5 - Tue May 1, 2012 2:00 PM EDTThe Democratic Majority in the Senate voted against nominating Mr. Smith. Republicans DO NOT control the Senate. The House of Representatives does not vote on nominees.
Mario 69,
That is simply not true. Sen. Richard Shelby (R) placed a hold on the nomination. Given the way the procedural filibuster works, the Democrats needed 60 votes to break the hold. Even with the extra three Republicans, they couldn't get that number.
That is simply not true. Sen. Richard Shelby (R) placed a hold on the nomination. Given the way the procedural filibuster works, the Democrats needed 60 votes to break the hold. Even with the extra three Republicans, they couldn't get that number.
- 1 vote
Chris -
Sounds like sour grapes in a Democratic Majority Senate.
Mr. Orion did say: "the republican controlled majority of congress." Either mistake or lie.
Ms. Pelosi proved the Democrats' failure to rule or even manage in the House. Mr. Biden fails to lead his own party in the Senate.
Mr. Orion also said: "President, Congress, House. In order to get anything done, all 3 have to be pretty much in agreement." which is not true of appointments. He chose the subject, and missed by a factual mile.
#8.7 - Tue May 1, 2012 4:49 PM EDTSounds like sour grapes in a Democratic Majority Senate.
Mr. Orion did say: "the republican controlled majority of congress." Either mistake or lie.
Ms. Pelosi proved the Democrats' failure to rule or even manage in the House. Mr. Biden fails to lead his own party in the Senate.
Mr. Orion also said: "President, Congress, House. In order to get anything done, all 3 have to be pretty much in agreement." which is not true of appointments. He chose the subject, and missed by a factual mile.
Perhaps he meant that it "wasn't meant to be a factual statement".
#8.8 - Tue May 1, 2012 4:54 PM EDT
This
over site of a program to help people keep their homes was covered up
by republicans (former KKK) while they launch a business that would
allow the republican party(former KKK) to start a business for buying
these homes for pennies on the dollar and renting them back to the
orginal home owner with the backing of the US government that the
republican party (former KKK) never loses rent. Every business owner
should have these same protection and if republican (former KKK) gets
its way they will.
- 4 votes
#9 - Tue May 1, 2012 11:08 AM EDT
Do
remember Romney's original assertion to "let the foreclosure process
run it's course. Investors will buy the homes and rent them out." Kind
of backs you up.
- 3 votes
check your history books elvis.
#9.3 - Tue May 1, 2012 12:30 PM EDT
The
KKK was founded by Democrats and voted Democrat religiously until the
1960’s, when the Democrat party shifted their platform to instead of
alienating minority groups, to start enslaving them through
entitlements. The Republican party has never stood for KKK ideals, and
the only reason why they would vote Republican, if they really do, is
because they hate the Democrat party more for abandoning them.
- 1 vote
No
@!$%#! Because the "Banks" were going to lose millions if they did.
Now the "Banks" have lost millions. What a bunch of idiots running our
country!
#10 - Tue May 1, 2012 11:08 AM EDT
The
value of those homes was inflated by the unregulated lending practices
and the creative financial products designed by the big banks to line
their own pockets. If adjusting the house price to a more realistic
figure lets more people afford to stay in their homes, everyone wins. A
neighborhood doesn't usually fare too well when there are a number of
deserted and foreclosed on homes.
- 7 votes
#11 - Tue May 1, 2012 11:12 AM EDT
Correct.
Even people with no mortgage benefit when we help people stay in their
homes. Property values don't crash on the innocent neighbors.
- 4 votes
Correct. Even people with no mortgage benefit when we help people stay in their homes. Property values don't crash on the innocent neighbors.Brilliant. So now that the incentive to pay your mortgage on the agreed amount has been completely removed, why would anyone do it? Why wouldn't the innocent neighbors then demand that their principal be reduced as well? Why wouldn't they be entitled to it?
It seems people just can't think things through to their logical conclusions any more.
- 2 votes
Actually
the foreclosed homes are being bought, sometimes in bulk, to wealthy
investors. They use the Bush tax cuts to buy up the homes of the former
middle class.
- 1 vote
Joe 6 pack..
Banks aren't there to actually HELP you or any other sinking homeowners! They simply don't CARE.. You have to realize from the top to the bottom of a bank's hierarchy they don't give a crap about human beings, they ONLY care about 'the bottom line'.. 'PEOPLE' don't enter into the equation, you are nothing but an account number to them! The CEO's and exec's that run your bank never see you or any other customer as a 'person', you are their next BMW or their next summer vacation home or their next corporate jet, that's all.. You are literally nothing more then a dollar sign to them and your problems mean absolutely nothing to them.. If people would get this fact through their head they wouldn't waste their time trying to get these institutions to ACT like they are part of the human race.. They are not!
Banks aren't there to actually HELP you or any other sinking homeowners! They simply don't CARE.. You have to realize from the top to the bottom of a bank's hierarchy they don't give a crap about human beings, they ONLY care about 'the bottom line'.. 'PEOPLE' don't enter into the equation, you are nothing but an account number to them! The CEO's and exec's that run your bank never see you or any other customer as a 'person', you are their next BMW or their next summer vacation home or their next corporate jet, that's all.. You are literally nothing more then a dollar sign to them and your problems mean absolutely nothing to them.. If people would get this fact through their head they wouldn't waste their time trying to get these institutions to ACT like they are part of the human race.. They are not!
- 7 votes
#12 - Tue May 1, 2012 11:14 AM EDT
Fire DeMarco. Put HIM out of a job. Put him on a terrorist watch list or some other thing so HE CAN NEVER WORK AGAIN.
I want HIM on the street living under a bridge with the REST of the CEO's that DESTROYED OUR ECONOMY.
Oh yeah. AND GIVE THE BIG BANKS THE CORPORATE DEATH PENALTY.
I want HIM on the street living under a bridge with the REST of the CEO's that DESTROYED OUR ECONOMY.
Oh yeah. AND GIVE THE BIG BANKS THE CORPORATE DEATH PENALTY.
- 9 votes
No
they don't want to help the little guy to stay in his/her home but
they'll bailout corporations and banks, the same banks that screwed over
the economy. Yeah that makes sense. I lost my job 3 days after we moved
into our brand new house. Thankfully hubby did not. I would never ask
the bank to reduce principal but interest is another story. What is
interest? I put up a piece of property and a house against my mortgage,
what did they put up? I jokingly asked the bank lady when we signed the
mortgage if I could see this interest they were putting up as collateral
on the loan and she became angry for me asking this question. Hence
all I got was thin air. If you think I'm someone who wants to get away
with getting something for nothing, think again. I haven't missed any
payments but until I find work again my heart will be in my throat every
day.
- 9 votes
#13 - Tue May 1, 2012 11:21 AM EDT
The
real reason he didn't implement the program? Because he's looking for a
nice, comfy place at BofA or some other major bank when he leaves
Government service. The banks stand to lose significant profit when you
start reducing principal amounts, and they don't want that to happen.
Standard Government manager mentality: Do a favor for a company, one
that makes or saves them a ton of money, they owe you a favor in return.
- 13 votes
#14 - Tue May 1, 2012 11:40 AM EDT
Why
does this country keep Fannie Mae, they have done nothing but mess up
the entire morgage industry. If you have an hourly wage of $10 or less,
of course you are OK to buy a $500,000 house even if you know you can't
pay for it.
Stop this madness, this administration and the entire government is totaly messed up.
Stop this madness, this administration and the entire government is totaly messed up.
- 3 votes
#15 - Tue May 1, 2012 11:42 AM EDT
You
know, Fannie and Freddie never controlled the lending industry.
Private banks were never forced to make bad loans regardless of what
you've heard. The truth is that Big Banking has been lobbying for an
unregulated credit market since Nixon. They finally got what they
wanted starting with Regan, and the outcomes was that by the beginning
of 1999 they rushed healdong into making subprime loans the very second
that the law was rewritten. And Wall Street followed suit with credit
default swaps that have RUINED the world economies. Fannie and Freddi had nothing to do with that.
And you know how all that turned out.
And you know how all that turned out.
- 5 votes
@Ron:
You are ill-informed on the subject. You (and people in general)
should refrain from commenting on subjects about which you/they are
ill-informed.
And a tip: view any information you receive from a Fox-affiliated source, from radio talk shows and via chain email with a very jaundiced eye: chances are you are receiving agenda-laden propaganda, half-truths and/or blatantly false misinformation, not actual facts.
And a tip: view any information you receive from a Fox-affiliated source, from radio talk shows and via chain email with a very jaundiced eye: chances are you are receiving agenda-laden propaganda, half-truths and/or blatantly false misinformation, not actual facts.
- 4 votes
clock-in
and pretend to do something, Cummins & Thierny press release is to
destabilize DeMarco to the point of quitting and hopefully get someone @
FHFA admistratively rule to implement and execute what the other 100
legislators think what best to do without legislating...let the good
times roll...clock-in and pretend to be working for the good of the
people
- 1 vote
#16 - Tue May 1, 2012 11:46 AM EDT
I
always knew there was a "punisher" in the republican party, and now he
steps forward unmasked in the person of De Marco. Decidedly unChristian
of him, and them.
- 5 votes
#17 - Tue May 1, 2012 11:54 AM EDT
De Marco is such a hypocrite.
The truth is that the mortgage/credit default swap crisis was an enormous scam perpetrated on the American public, and at their expense. The perpetrators have abused morality without shame or hesitation. Nobody in Banking or Government has clean hands here, and they have lost the right to pass judgement on what the public has or has not done. I'm certain the De Marco worked in Banking before taking this job, so this is just a bone thrown to his former employers who don't deserve it at all.
De Marco is really saying that help only exists for rich corporate interest, who can have it without comment or censure while still getting their bonuses. But he thinks that the public deserves his contempt.
Fire the ba$.tar.D!!!
The truth is that the mortgage/credit default swap crisis was an enormous scam perpetrated on the American public, and at their expense. The perpetrators have abused morality without shame or hesitation. Nobody in Banking or Government has clean hands here, and they have lost the right to pass judgement on what the public has or has not done. I'm certain the De Marco worked in Banking before taking this job, so this is just a bone thrown to his former employers who don't deserve it at all.
De Marco is really saying that help only exists for rich corporate interest, who can have it without comment or censure while still getting their bonuses. But he thinks that the public deserves his contempt.
Fire the ba$.tar.D!!!
- 8 votes
#18 - Tue May 1, 2012 12:02 PM EDT
clock-in
and pretend to be working. Cummins and Thierney's press release is
designed to destabilized DeMarco to quit and someone get someelse else
@FHFA to administratively rule and execute what the other 100
legislators in congress think is best to be done without legislating.
What a protective political cover?... keep on rolling...clock-in and
pretend to be working. p.s. when a person such as DeMarco is designated
acting administratively, is it a tenured protected job?
- 2 votes
#19 - Tue May 1, 2012 12:04 PM EDT
If
we can't help people who need it, then we aren't much of a Christian
nation. What has happened to "love thy neighbor" or "help the poor"?
It is all about greed. God is watching all of this with disgust and he
will have the last word to all of you.
- 6 votes
#20 - Tue May 1, 2012 12:05 PM EDT
Once
again Republicans refusing to act in Congress in order to oppose
executive responsibilities of the President have left the American
people on a lurch. Once again I see that power for the GOP comes before
duty to the country and the people these shysters are supposed to be
serving.
- 9 votes
#21 - Tue May 1, 2012 12:06 PM EDTDeMarco's resistance to the idea is based on his "philosophical" opposition to reducing the amount a homeowner owesI have a "philosophical" objection to putting people out on the street due to a cynical manipulation of the housing market by lenders in order to increase short-term profits.
That and $3 will buy me a cup of coffee.
- 9 votes
#22 - Tue May 1, 2012 12:08 PM EDT
De
Marco is absolutely right. It would be morally dubious to reward banks
for making loans they knew to be bad (and they all did), just like it
would be morally dubious to reward would-be and ignorant homeowners by
reworking a deal that was bad in the first place. If homeowners must
lose their homes over this deception, then bank owners should lose their
banks too. That's only fair.
- 7 votes
#23 - Tue May 1, 2012 12:08 PM EDT
I
find it absolutely astounding that no Wall Street bankers have gone to
prison yet for the mortgage/credit defualt swap crisis. They are
certainly making the public pay dearly for having believed their lies.
- 11 votes
#24 - Tue May 1, 2012 12:09 PM EDT
The
US is suffering under the most divisive and incompetent administration
in US History. The people of the US now fear from the most serious to
the least: Democrats, News journalists, anarchists, environmentalists,
al Qaeda.
- 3 votes
#25 - Tue May 1, 2012 12:11 PM EDT
Seriously? That's what you get from this?
Critical thinking is a concept you should investigate, my friend. You might find it comes in handy sometimes.
Critical thinking is a concept you should investigate, my friend. You might find it comes in handy sometimes.
- 3 votes
Before
GWB II and the GOP, in their infinite wisdom modified the U.S.
Bankruptcy Code, the Banrupcy Courts had the inherent authority to "cram
down" mortgages to an mount the property was worth,and the homeowner
could afford. This was eliminated in the revisions. Perhaps now it
is time to legislate such provisions back into the code considering the
current fiscal mess, and the refusal of mortgage holders to reduce the
principal amounts in line with actual values of the properties.
Instead, we see greed once again controlling everything, in spite of the Fed bailing out banks and providing 0 interest loans to these same institutions. Isn't it about time to say enough?
Instead, we see greed once again controlling everything, in spite of the Fed bailing out banks and providing 0 interest loans to these same institutions. Isn't it about time to say enough?
- 1 vote
Xant!
Where do you get this utter nonsense? How about a little documentation for that rant? Short of lying down and begging the GOP?Teaparty to run over him with more and more concessions, Obama has done everything possible to work with the GOP. Sorry, the remnants of the Late, Once Great GOP has become all that you discribe: the most devisive and incompetent Political Party in U.S. History. No solutions, no answers, and after three GOP Administrations attempted application of failed trickle down theory, Romney, Ryan, and the GOP want to do it all over again! I guess 50% of all Americans living in poverty, combined with 40% of all wealth in the hands of the top 2% isn't good enough for you!
Where do you get this utter nonsense? How about a little documentation for that rant? Short of lying down and begging the GOP?Teaparty to run over him with more and more concessions, Obama has done everything possible to work with the GOP. Sorry, the remnants of the Late, Once Great GOP has become all that you discribe: the most devisive and incompetent Political Party in U.S. History. No solutions, no answers, and after three GOP Administrations attempted application of failed trickle down theory, Romney, Ryan, and the GOP want to do it all over again! I guess 50% of all Americans living in poverty, combined with 40% of all wealth in the hands of the top 2% isn't good enough for you!
- 1 vote
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