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The banks dont eat it... WE DO. Most mortgages are backed by Fannie/Freddie which are government sponsered enterprises that WE OWN.
Plus any money the bank loses, they will just increase fees elsewhere which means WE end up paying the price. The responsible American is the one that is going to pay the price.
Ding, ding, ding, we have a winner.
Regardless of whether we bail out the banks or the delinquent homeowners in the end the taxpayer still ends up footing the bill. It really isn't fair to those of us who are fortunate enough not to be under a bad mortgage.
Wish I had an answer but I think we are FUBAR'D as a nation. Stuff is gonna change for the worse, probably way, WAY worse. It may sound paranoid but I'm learning how to be as self sufficient, healthy and as dangerous to mess with as possible. Things might get really scary and ugly as our economy crumbles.
Banks cannot arbitrarily change loan terms after closing. If you take out a 30 year fixed rate mortgage at 5% the bank cannot decide to bump up your rate to 10%.
If a bank did do something like this the borrower could easily take legal action and it would be a slam dunk in the borrowers favor.
Your usual oversimplification can't work in this case... How do you enforce a loan agreement in the case where the lender did not properly document the funding and did not properly document the transfer of the loan to a trustee (MERS -> MBS) - essentially leaving themselves no way to prove who holds the note.
Who legally gets the house when it defaults? You have to realize this is exactly why the foreclosures have essentially stopped.
... we bail out the banks or the delinquent homeowners ...
I used your words. I hope you don't mind.
How about we not bail out anyone? Too late, though, huh?
How about a "reverse-bailout?" Put me down as a "YES" vote.
Would automatically reducing everyone's mortgage rate to the
current market rate and freezing it there constitue a bailout?
Those with no savings and no job will eventually have to move.
Others, not so much.
I have a sister with a $150k income, $190k mortgage, a $180 house
that she paid $300k for in 2005 and no debt who DOES NOT QUALIFY
for a mortgage at current market rates.
I have a 6.25% mortgage. I want a 15-year. They won't talk to me either.
Now, they are "risk-averse." Great.
Based on that alone, I hate the banks.
Of course I have a lot more reasons ...
Your usual oversimplification can't work in this case... How do you enforce a loan agreement in the case where the lender did not properly document the funding and did not properly document the transfer of the loan to a trustee (MERS -> MBS) - essentially leaving themselves no way to prove who holds the note.
Who legally gets the house when it defaults? You have to realize this is exactly why the foreclosures have essentially stopped.
I honestly could care less about the whole documentation issue. Let the banks fight amongst themselves who really owns the house. I sure as hell know who doesn't own it. It's the person who stopped making the payments.
Does anyone question that the buyer got funds to purchase the house? I don't care that the documentation of that is messed up. I really don't. Get the hell out of the house you stopped making payments on.
I honestly could care less about the whole documentation issue. Let the banks fight amongst themselves who really owns the house. I sure as hell know who doesn't own it. It's the person who stopped making the payments.
Does anyone question that the buyer got funds to purchase the house? I don't care that the documentation of that is messed up. I really don't. Get the hell out of the house you stopped making payments on.
OK, but I'm not following how an unsellable empty house, still nonperforming loan, and a homeless family solves the problem.
I'm a little confused. I don't know a great deal about this mortgage business, but maybe I should. My wife is the smart one when it comes to these things. My wife and I have lived in our home for about 21 years now. We plan on paying off the house when she retires in 3 years. My question is about the note. We currently make payments to X bank. Wouldn't they be the ones to hold the note? I know it's changed hands (banks) three or four times since we've owned the home. I mean, how can a note get lost? If another bank takes over, doesn't the note and deed just follow?
By the way, we've never missed a house payment since we've lived in the home. We're very fortunate, I know. The reason might be that we didn't buy more home than we could afford.
OK, but I'm not following how an unsellable empty house, still nonperforming loan, and a homeless family solves the problem.
I wasn't trying to solve any problems. Just throwing out what I consider a normal chain of events.
1. Bank agrees to loan money and buyer agrees to borrow money.
2. Buyer breaks the loan agreement.
3. Bank takes the house and whatever loss comes along with it.
4. Buyer loses the house and gets their credit score crushed.
5. Depending on where you are the bank possibly comes after the buyer for the difference and at some point in the future possibly has to pay taxes on that loss.
It's a business transaction.
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My wife is the smart one when it comes to these things. My wife and I have lived in our home for about 21 years now. We plan on paying off the house when she retires in 3 years. My question is about the note. We currently make payments to X bank. Wouldn't they be the ones to hold the note? I know it's changed hands (banks) three or four times since we've owned the home. I mean, how can a note get lost? If another bank takes over, doesn't the note and deed just follow?
