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Old 05-29-2010, 12:13 PM
 
2,878 posts, read 3,848,374 times
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Quote:
Originally Posted by verobeach View Post
Eloquently put!!! Thank you Lilybeans. We own our home outright yet it's worth less than we paid for it. Maybe the taxpayers would like to throw some $$$ at us as a reward for doing everything right.
First off, you are a minority (house paid off) in this country. The fact that it is worth less than you paid for it and you are OK with that and you are staying put is a personal choice. Does not mean you are smart or right, just means you made a certain choice.

To answer your second question, you pay taxes and you helped prop up institutions that would have failed otherwise. Since these institutions received the help they needed to stay afloat, by reciprocity, they should provide the reciprocal help to the homeowners who cannot afford their mortgages. This either means better terms on the loans or partial principal forgiveness. The banks are willing to do neither, in the majority of cases.

My mortgage got sold twice after issuance. That most likely means that the current servicer bought it for pennies on the dollar. Since the principal (or interest rate) has not changed you can imagine the amount of money they are making and you could also imagine that they could meet me half way somewhere, if that is how they worked. But they don't. They only take and rarely give (unless cajoled by incentives or only if it is in their favor since after all, they are in the business of making profit on HOMES).

Finally, I can understand the reasoning some of you are putting forth: a home is a home and it is a long term thing. But, the banks do not treat it as such. Fifty years ago, maybe, when the banker was a local guy who knew you and your family and it was all local and personal. Nowadays, housing is just another commodity to the banks and as we saw, it got securitized and leveraged as any other liquid asset out there. In other words, it became just another piece of paper to the investors, only a piece of paper with some imaginary or real monetary value attached. So, the line of reasoning that applied to 30 or 40 years ago does not necessarily apply anymore.

I have learned my lesson. After I am in the positive with this house and I can walk away untarnished, I am going all cash. Buy a piece of land for cash, build by myself, be off the grid (solar, water etc.), grow my own food and a big F**K YOU to the banks.
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Old 05-29-2010, 12:14 PM
 
26,590 posts, read 54,462,029 times
Reputation: 13016
Quote:
Originally Posted by ognend View Post
Agreed. On the flip side, do not lend to someone who clearly does not meet the criteria. Borrower greed = lender greed in this situation. You only mentioned one side, he is part of the problem, true, but the bank is also equally part of the problem (actually a bigger part since they could have always said "no"). In a sense this was a JOINT business venture (him+bank) but only one partner in the venture got the govt help. Pervertedly enough, the other partner partially picked up part of the bill (by virtue of being a tax payer) and got stuck with properties he cannot write off without a bankruptcy plus he is also labeled as being the problem by people like you who do not think banks were.
Both sides share guilt, but the TARP money was a loan, it had to be repaid just like a mortgage does.
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Old 05-29-2010, 12:19 PM
 
2,878 posts, read 3,848,374 times
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Originally Posted by annerk View Post
Both sides share guilt, but the TARP money was a loan, it had to be repaid just like a mortgage does.
How do you think the banks turned into positive from being almost bankrupt? What changed within a year and how was TARP used to do that? Do you think they used the loan to modify individual mortgage terms for individual borrowers and try to keep them in their homes? Or was it just about writing off "bad paper" regardless of who went into foreclosure and why?
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Old 05-29-2010, 01:43 PM
 
2,143 posts, read 7,184,536 times
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Quote:
Originally Posted by ognend View Post

My mortgage got sold twice after issuance. That most likely means that the current servicer bought it for pennies on the dollar.
No. Mortgages aren't bad debts that are sold to servicers for pennies. Servicers do just that-service the mortgage and get paid for that. They don't own the mortgage.

Now, how do you think banks get money to loan for mortgages? If you borrow $100,000 the bank may sell that loan to Fannie Mae or Freddie Mac, but not for pennies on the dollar. They sell it for face value, less a small percentage for the servicing they continue to do. The money they sell it for is used to fund the next mortgage for someone.
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Old 05-29-2010, 01:47 PM
 
Location: Lehigh Acres
1,777 posts, read 4,167,931 times
Reputation: 883
Quote:
Originally Posted by mango23 View Post
The banks don't need to spend a cent. Collectors go after them on even the slim chance they collect, that is their business.
Actually, you have to pay a collection agency to take on a debt. Some offer repayment if they don't resolve it, but it is still up front, out of pocket.

What's to be done if your broker schemed with an appraiser and falsified documents to get you into your house? What if you found out, the house that was such a great deal, that you had no problem getting financed for, belonged to your brokers sister, or uncle, etc?
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Old 05-29-2010, 01:50 PM
 
2,143 posts, read 7,184,536 times
Reputation: 1138
Quote:
Originally Posted by JBMallory View Post
Actually, you have to pay a collection agency to take on a debt. Some offer repayment if they don't resolve it, but it is still up front, out of pocket.

What's to be done if your broker schemed with an appraiser and falsified documents to get you into your house? What if you found out, the house that was such a great deal, that you had no problem getting financed for, belonged to your brokers sister, or uncle, etc?
You bought it. didn't you do due diligence? Have your lawyer review it? No one forced anyone to sign a mortgage or buy a house.

Greed run amok. Everyone was thinking they could flip or refinance and get rich. It was a house of cards.
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Old 05-29-2010, 02:51 PM
 
2,414 posts, read 4,794,825 times
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There are some RE lawyers here in Orlando that do a radio show. They are advising certain people to do strategic defaults.
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Old 05-29-2010, 04:01 PM
 
26,590 posts, read 54,462,029 times
Reputation: 13016
Quote:
Originally Posted by JBMallory View Post
Actually, you have to pay a collection agency to take on a debt. Some offer repayment if they don't resolve it, but it is still up front, out of pocket.

What's to be done if your broker schemed with an appraiser and falsified documents to get you into your house? What if you found out, the house that was such a great deal, that you had no problem getting financed for, belonged to your brokers sister, or uncle, etc?
You go after the broker for fraud. In a case like the one you stated it would be easy to prove. Once a fraud is proven their E&O policy will pay out.
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Old 05-29-2010, 04:02 PM
 
Location: southern california
55,497 posts, read 74,394,948 times
Reputation: 47887
interesting stuff, 1st non dischargable student loan, now house, there is a pattern.
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Old 05-29-2010, 04:04 PM
 
26,590 posts, read 54,462,029 times
Reputation: 13016
Quote:
Originally Posted by ognend View Post
How do you think the banks turned into positive from being almost bankrupt? What changed within a year and how was TARP used to do that? Do you think they used the loan to modify individual mortgage terms for individual borrowers and try to keep them in their homes? Or was it just about writing off "bad paper" regardless of who went into foreclosure and why?
It was a little of everything. Some people DID get their loans refinanced. What they were able to do with TARP money was to make GOOD loans for people who SHOULD be buying homes or cars or whatever with conventional loans and actual downpayments.
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