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One reason foreclosures are so rampant is that banks and their advocates in Washington have delayed, diluted, and obstructed attempts to address the problem. Industry lobbyists are still at it today, working overtime to whittle down legislation backed by President Obama that would give bankruptcy courts the authority to shrink mortgage debt. Lobbyists say they will fight to restrict the types of loans the bankruptcy proposal covers and new powers granted to judges.
How Banks Are Worsening the Foreclosure Crisis (http://news.yahoo.com/s/bw/20090213/bs_bw/0908b4120034085635 - broken link)
One reason foreclosures are so rampant is that banks and their advocates in Washington have delayed, diluted, and obstructed attempts to address the problem. Industry lobbyists are still at it today, working overtime to whittle down legislation backed by President Obama that would give bankruptcy courts the authority to shrink mortgage debt. Lobbyists say they will fight to restrict the types of loans the bankruptcy proposal covers and new powers granted to judges.
How Banks Are Worsening the Foreclosure Crisis (http://news.yahoo.com/s/bw/20090213/bs_bw/0908b4120034085635 - broken link)
They are doing this because they WANT taxpayer money. They want US to eat THEIR losses they would take should a mortgage be renegotiated into a fixed etc.
BUT.. they are shooting themselves in the foot.
I was facing foreclosure, yet I was willing to pay back WHAT I OWED on the house.. which, btw , was then significantly more than the house was currently worth thanks to the decline inthe market. My initial interest rate was 6.95%. It's what I paid for 2 years and what I was able to pay. No more. I didn't ask to write down principal .. all I asked for was to keep paying them back at the 6.95% and not have my rate adjust ( it jumped to 9.95% at the first adjustment). They wouldn't budge.
In the end, I sold the house short to get out from under it and avoid foreclosure. I got out of a bad situation as best and as clean and responsibly as I could. BUT.. I think the banks are a bunch of moreons! Someone like me could have stayed and paid them back every penny AND a 6.95% interest over 30 years.. instead, they lost, I lost (because I put money down and into my home). Accept I lost twice because I'm also a tax payer that is bailing them out.
about 20 months ago, we made an offer on a house that was in short sale. We offered right around $300K. The bank took too long to respond, and we had to get out and buy another house. an entire year later, the same house was up for auction and sold for $250K. These foreclosures are obviously not the bank's top priority, but I think they should put more resources into taking care of these in a timely manner. This is one foreclosure that could have been avoided, had the bank accepted our offer, and that would have been $50K more for the bank!
about 20 months ago, we made an offer on a house that was in short sale. We offered right around $300K. The bank took too long to respond, and we had to get out and buy another house. an entire year later, the same house was up for auction and sold for $250K. These foreclosures are obviously not the bank's top priority, but I think they should put more resources into taking care of these in a timely manner. This is one foreclosure that could have been avoided, had the bank accepted our offer, and that would have been $50K more for the bank!
There was an article in the paper months ago about a home that was being short sold. They had a buyer lined up for I think it was like $300K.. similar to yours. The couple was ready to go.. the bank took too long and in the meantime the foreclosured date came and went. The house was sold at auction for ALOT less than what it was offerd by the legit buyers. Well that investor that bought the house turned around and sold it to the couple for the same amount of money that couple would have paid the bank directly for!!!
So.. the Bank lost the money they could have had and the couple trying to avoid foreclosure got screwed too.
It's insane.. I'm convinced the banks are as dumb as nails.... really really stupid.. and the guys in charge making decisions get paid MILLIONS a year to be that dumb!!
The problem with securitization (bundling a group of mortgages and selling them as bonds) is there is not merely one owner of a mortgage but, in some cases, dozens or owners spread around the world.
If a single bank owned your mortgage it would be comparatively simple to renegotiate the rate. The problem is that few of the mortgages that are causing the problems are owned by a single entity. That makes it very difficult to renegotiate the interest rate. The article cited doesn't really discuss this and is thus misleading as it implies that the solution is simpler than it is.
Last edited by tpk-nyc; 02-13-2009 at 09:39 AM..
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