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  #1  
Old 10-24-2011, 03:49 PM
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Thumbs down Foreclosure Plan At Taxpayers' Expense

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New Obama Foreclosure Plan Helps Banks At Taxpayers' Expense
http://www.huffingtonpost.com/2011/1...n_1028554.html

The Obama administration is introducing a new program on Monday designed to lower monthly mortgage payments for more troubled homeowners. But a key new condition in the plan would shift the financial liability for refinanced loans from Wall Street banks to the American taxpayer
Excuse me? He can do this without putting it to a vote?
 
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  #2  
Old 10-24-2011, 04:03 PM
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I have some empathy for those who happened to buy at the height of the bubble, quite a bit less for those who did interest only loans to buy more house than they could afford and absolutely none for those who took out second mortgages to finance a lifestyle and a home they could not afford.

I guess the little old lady I saw on election day 2008 who said I voted for Barrack cause he is gonna take care of me may have been right.

Geez, I must have been a fool to pay debts all these years.

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Excuse me? He can do this without putting it to a vote?
I don't see how he can legally but that has not stopped him yet. It may be another year before he gets his wings clipped and tail feathers plucked.


.
 
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  #3  
Old 10-24-2011, 04:05 PM
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And it won't even solve the problem. Like the article says the problem is the loans are upside down. Until that economic reality is acknowledged and dealt with housing prices cannot recover.

The only thing we have in our favor is Obama's previous programs about this have been total failures.
 
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Old 10-25-2011, 06:10 AM
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Would you guys prefer he waste time and taxpayer dollars by sending this to the bought congress for their rubber stamp?
 
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  #5  
Old 10-25-2011, 08:05 AM
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Originally Posted by Zap View Post
Would you guys prefer he waste time and taxpayer dollars by sending this to the bought congress for their rubber stamp?
Yep. Not sure it will get out of the Senate. The House will approve it with no problem.
 
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  #6  
Old 10-25-2011, 08:37 AM
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This move clearly benefits the banks at the expense of the taxpayer, meaning it's a done deal.

And Jake's absolutely right. It does nothing to solve the underlying issue.
 
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  #7  
Old 10-25-2011, 08:41 AM
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I think a better idea would be to cut the interest rate to as low as can possibly be maintained, yet keep the payments on the mortgage the same, thereby reducing the principal as quickly as possible.
 
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Old 10-25-2011, 08:47 AM
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And the option to "put back" the mortgage to the banks should be maintained unless the banks are willing to forego all of the rewards for that loan.

Lend the money to the borrower at zero interest for a 10 year term and you might be approaching something worthy of letting the banks off the hook for the ones that default.
 
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  #9  
Old 10-25-2011, 09:48 AM
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I found this interesting. Despite what Obama and they are doing, the Massachusetts Supreme Courts just ruled that foreclosures are indeed illegal since the banks never actually owned the homes and have no promissory note to show ownership. Here's the article:

Link

This can be a really good and bad thing at the same time. Imagine if everyone just stopped paying their mortgages. Even just those that were in foreclosure. In addition to taking bailout money with no intention of paying it back and giving their CEO's $1M+ bonuses, this also shows just how greedy banks are and exposes them once again for the frauds that they are.
 
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  #10  
Old 10-25-2011, 09:53 AM
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Zap even zero interest won't do it. This needs to be solved internally by the banks. They need to take their hits, renegotiate the principle and move on. Actually most are doing so when approached with a make sense deal...the primary holdouts being to no one's surprise Bank of America and Citibank.

Until this has been done on a wide basis excessive foreclosures will still continue and housing will not stabilize. I don't think it can be forced though. I think banks need to work it out internally, without government support or bailouts. Those that fail to do what is necessarily will collapse...as they should. But if the govt keeps running to wipe their butts every time they crap we will never get through this.
 
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  #11  
Old 10-25-2011, 09:56 AM
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Quote:
Originally Posted by Sunfyre7896 View Post
I found this interesting. Despite what Obama and they are doing, the Massachusetts Supreme Courts just ruled that foreclosures are indeed illegal since the banks never actually owned the homes and have no promissory note to show ownership. Here's the article:

Link

This can be a really good and bad thing at the same time. Imagine if everyone just stopped paying their mortgages. Even just those that were in foreclosure. In addition to taking bailout money with no intention of paying it back and giving their CEO's $1M+ bonuses, this also shows just how greedy banks are and exposes them once again for the frauds that they are.
This is actually going on all over the nation in state and federal courts. As much as I hate to say it, the lawyers can actually play a very useful roll in this. And the beauty is that as these decisions continue to come down in state after state most lenders have started to play ball and renegotiate principle balances.
 
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  #12  
Old 10-25-2011, 01:08 PM
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Quote:
Originally Posted by Zap View Post
I think a better idea would be to cut the interest rate to as low as can possibly be maintained, yet keep the payments on the mortgage the same, thereby reducing the principal as quickly as possible.
That suggestion has merit for those with a single mortgage. Provided they were forbidden from taking out a second I might could agree with a plan like that.

I would have to crunch a bunch of numbers to see if it would have any chance of working well enough to do any good.

While Jake's plan appeases my hate the bankers mentality, I am not sure it is best for the country. Screw the bankers is fine with me, but screw the country is not my style.
 
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  #13  
Old 10-25-2011, 09:38 PM
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Originally Posted by ScriptMan View Post
While Jake's plan appeases my hate the bankers mentality, I am not sure it is best for the country. Screw the bankers is fine with me, but screw the country is not my style.
It's not really a hate the bankers plan. And people will think it is unfair...and well we know how people feel about unfair these days...but the reality is that this is what happens if you don't. People continue to hold on because they are decent people and trying to do it right. The ones that don't have already lost their properties (along with plenty of good ones who have also). Every single day a gob of good ones can no longer hang on. They give up. Prices in their neighborhoods go down. It makes it harder for the rest of the neighbors. A few months later one of them gets to the end of his rope and same thing. This has already gone on for years and no matter how the National Assoc of Realtors paints it, it really is not recovering yet. In fact, it can't. People are still losing their homes in records numbers. Banks are still holding foreclosed homes in inventory. We are not at the bottom.

While it will be "unfair" for some or many people to get their mortgages written down:
1. It is already happening...and in ever increasing numbers.
2. Those who don't will benefit in so many ways -- stabilized neighborhoods, stabilized value of their own homes, a general good will atmosphere instead of the constant stress and gloom. Construction cannot come back with full force without a stable home inventory on the market, so jobs will follow also.

IMO if we would have bitten this hard bullet from the beginning housing would have been depressed but significantly less. We would be nearly out of this by now. And if we don't take our licks we will still be here in 5 years.
 
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  #14  
Old 10-26-2011, 06:13 AM
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Quote:
Originally Posted by JakeMoore View Post

IMO if we would have bitten this hard bullet from the beginning housing would have been depressed but significantly less. We would be nearly out of this by now. And if we don't take our licks we will still be here in 5 years.
With that I agree 100%. Five years will be the minimum.

Also consider that no matter what happens, there is a finite market for housing. We need other job creation paying living wages to fully recover.
 
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  #15  
Old 10-26-2011, 06:53 AM
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Quote:
Originally Posted by JakeMoore View Post
Zap even zero interest won't do it. This needs to be solved internally by the banks. They need to take their hits, renegotiate the principle and move on. Actually most are doing so when approached with a make sense deal...the primary holdouts being to no one's surprise Bank of America and Citibank.

Until this has been done on a wide basis excessive foreclosures will still continue and housing will not stabilize. I don't think it can be forced though. I think banks need to work it out internally, without government support or bailouts. Those that fail to do what is necessarily will collapse...as they should. But if the govt keeps running to wipe their butts every time they crap we will never get through this.
That's the problem. They ARE continuing to get bailed out and the homeowner is largely ignored.
If you have a homeowner who wants to do the right thing...
ie. They still make their payments on a house that is worth $200,000 with a mortgage that is $300,000, then he wants to get his mortgage under $200,000 as quickly as possible. The bank wants to avoid a default on that mortgage and are on the hook (currently) if it does default.
Since Obama has decided he's going to step in anyway, then perhaps his role should be to try to get to both destinations as quickly as possible.

So, maybe you're right, Jake. Zero interest won't be enough.
Maybe something along the lines of the homeowner and the bank splitting the haircut and a zero interest loan that begins today. In the example I provided, it would mean the bank writes off $50,000 and the new zero interest mortgage begins with $250,000 to the homeowner at zero interest for 10 years. A couple of years of payments puts the home above water again.
 
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  #16  
Old 10-26-2011, 08:40 PM
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Quote:
Originally Posted by Zap View Post
The bank wants to avoid a default on that mortgage and are on the hook (currently) if it does default.
As abhorrent as this is, it's not quite accurate in the majority of cases. In a majority of cases the bank is not on the hook. The are really only on the hook for the loans that are lowest risk and most likely to pay.

1. During the boom and 80% LTV was almost unheard of. Everyone was getting 97%, 100%, 103%, 107%, 125% and even 135%. Those loans, and virtually all loans with higher than 80% LTV were covered by private mortgage insurance.

2. The banks don't even own those loans. That is why this article is misleading. But the common person, including this writer, has no idea of everything that is behind these loans. A huge portion of these loans (between 30 and 50 million total loans) were sold off as soon as they were written. The banks don't own them, they only service them...for a fee...with no risk. Yet they continue to act in all respects as if they did own them.

3. Not only were they sold off, but they were sold off in all kinds of fractional bundles such that there is absolutely no way to determine who the legal owner is.

4. On top of all of that most of the loans had a number of exotic default insurance policies placed on it and many have been not only paid off, but paid off numerous times. I had one mortgage I worked on that, no lie, once we were able to trace everything (a minor miracle itself) had been paid off 33 times through insurance products.

5. And last but not least there are so many egregious errors in the paperwork and processing. RESPA, etc guidelines were just not followed. Those violations are $2k a pop in penalties to the bank. It is not at all uncommon to see loans with 10-20 violations.

All of that to say that the homeowner is actually in a much stronger legal position than they know.
 
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  #17  
Old 10-29-2011, 11:28 AM
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Since the monies for this have already been appropriated I don't really
see the foul ball. Anger is rightly directed at the banksters who refuse
to renegotiate mortgages unless their profits are subsidized.
Corporatism as usual. Join OWS!
 
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