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they only package mortgages that the govt(fannie mae, freddie mac, fha, hud, etc) wont underwrite.
The mortgage backed securities were essentially junk bonds disguised as triple A rated bonds and sold off to unwitting foreign investors. The investors bought them thinking American homeowners were a reliable creditworthy bunch and were up to date on paying their mortgages. Big mistake.
So, should the Chinese be allowed to buy foreclosed US homes? Well, they already own the junk bonds (aka MBS) that are backed by US homes as collateral. Technically speaking, they have the right to demand possession of the collateral or have it liquidated to repay our debt to them. So I find it rather silly for people to complain that the Chinese can easily buy up our houses when, for all practical purposes, our houses already belong to them (at least those that have been foreclosed).
ndfmmnlf, you are touching on the good stuff. I realize that these banks which created these bad/quickie loans are operating with foreign money. When the homes are being foreclosed and or when banks are doing bad the US government and not foreign investors pay off the banks and their bad debt with stimulus/bailout money (paying off investors), then the banks sell the property at a profit putting money back into the hands that created the problem. Now because it is too risky to invest in the market with bank securities and now since a lot of the foreign investors are slowly getting their money back it is better for them to buy the real estate directly instead of pooling their money. In these economic times people are still making money off of us and inslaving us to some degree. I'd rather make it a bit more difficult for them to buy where more money would make its way back to the US directly and also forcing them to reinvest their money into securities which will allow people to borrow again.
ndfmlf, the US should buy back all of the bad debts and let homeowners pay them directly. We are already dependent on oil from another source and now we are dependent on foreign money.
ndfmmnlf, you are touching on the good stuff. I realize that these banks which created these bad/quickie loans are operating with foreign money. When the homes are being foreclosed and or when banks are doing bad the US government and not foreign investors pay off the banks and their bad debt with stimulus/bailout money (paying off investors), then the banks sell the property at a profit putting money back into the hands that created the problem. Now because it is too risky to invest in the market with bank securities and now since a lot of the foreign investors are slowly getting their money back it is better for them to buy the real estate directly instead of pooling their money. In these economic times people are still making money off of us and inslaving us to some degree. I'd rather make it a bit more difficult for them to buy where more money would make its way back to the US directly and also forcing them to reinvest their money into securities which will allow people to borrow again.
I apologize and don't mean to be rude, but I don't understand what you are talking about.
Anyways, to go back to the topic.......we have 2 choices:
1. let entire subdivisions of abandoned foreclosed houses rot
or
2. let foreigners who have the cash buy up these homes
To me, the choice is a no-brainer. I mean, if an American has the cash to buy these homes, then let him do so. Nobody's stopping him from buying them. But if the people who have the cash happen to be foreigners like the Chinese, then let them buy up these homes. Why should we put up obstacles to make it difficult for us to clear our glutted housing inventory? Are we trying to shoot ourselves in the foot? Is it because of nationalistic ego that we can't accept the fact that some other people actually have more money than us? Is it so hard to believe that the Chinese can ever have the money to buy American homes when the Chinese habitually save 40% of their incomes while Americans habitually spend all of ours?
ndfmlf, the US should buy back all of the bad debts and let homeowners pay them directly. We are already dependent on oil from another source and now we are dependent on foreign money.
We have the money and the houses. The Chinese have worthless paper. How is it in our interests to trade?
We have the money and the houses. The Chinese have worthless paper. How is it in our interests to trade?
While you are technically correct that the hard assets are in US territory while the Chinese are holding the worthless junk bonds, these hard assets are supposed to be collateral. If we default on our loans, then civilized society dictates that we ought to liquidate the collateral to repay our loans to the Chinese. If we refuse to honor our financial obligations, then we might as well just drop all pretenses about being a civilized nation and declare that we don't owe anyone anything, and then launch some nukes to exterminate our creditors. Barring that, US credit rating will rightfully plummet to junk bond status. Nobody will ever lend us money again.
ndfmlf, what I am saying is that at the end of the day the foreign investors get their money back and are still able to buy up property making US citizens renters in their own country. If the US government put a cap on either how much a foreigner can spend or made them pay a bit extra to the government some of that money could go back into the purchasing power of the US citizens (through FHA loans for example). The US should not be bailing out the banks, they should let most of the stuff fall. When the US government gives the banks bailout/stimulus money it goes towards paying off investors they could care less if you foreclose. Then the investors will just be buying up property without the risk. In business there are several risks but these investors are not absurbing much the burdeon, but the homeowners are. So I don't believe the game is very fair.
Also, I don't mind other countries that have more money than us, really it is not a problem for me as I don't have that type of ego. But there are problems on the rise if we don't hold onto the bit we have.
EscapeCalifornia, the United States doesn't have any money we just print it and borrow it from the Chinese what are you talking about? We buy from the Chinese as well as their products are produced faster and cheaper, they are more connected on the global scene than we are (Europe buys Chinese as does So. America and Africa). What are others buying from the US? What makes us so great? Our economy is not stable. The value of the dollar is not worth much right now and now they will literally own most of the US (not to mention Asia out numbers the US).
ndfmlf, also to go into detail about what you didn't understand about what I was writing aout is that because these foreclosures hit so fast and investors weren't able to get their money back quickly, instead of the banks working with the borrowers they foreclosed on the properties because they got a guarantee (bailout money) from the US government that they would be able to payoff their investors. The reason why people weren't able to see changes in the market with all this bailout money is because the banks in addition to sitting on these homes were sitting on the money too. Now they have enough money to pay off their debt and resale the properties. Some banks won't take a big loss as we think. Try buying a short sale home or a bank owned home it is very difficult. These banks are letting homes go into foreclosure/auction. Then they end up buying back the auction home and showing the US government that they have too much liabilities on their books. These banks are still asking for example $700K for a home that should cost $200K, and I believe they want to show the government that they can't get rid of the homes and is another way they can ask for additional money. That we and our children and possibly their children will have to pay for. There are all kinds of games that are being played here. But we are getting the short end of the stick.
Foreigners should have to pay a bigger price to buy here.
ndfmlf, also to go into detail about what you didn't understand about what I was writing aout is that because these foreclosures hit so fast and investors weren't able to get their money back quickly, instead of the banks working with the borrowers they foreclosed on the properties because they got a guarantee (bailout money) from the US government that they would be able to payoff their investors. The reason why people weren't able to see changes in the market with all this bailout money is because the banks in addition to sitting on these homes were sitting on the money too. Now they have enough money to pay off their debt and resale the properties. Some banks won't take a big loss as we think. Try buying a short sale home or a bank owned home it is very difficult. These banks are letting homes go into foreclosure/auction. Then they end up buying back the auction home and showing the US government that they have too much liabilities on their books. These banks are still asking for example $700K for a home that should cost $200K, and I believe they want to show the government that they can't get rid of the homes and is another way they can ask for additional money. That we and our children and possibly their children will have to pay for. There are all kinds of games that are being played here. But we are getting the short end of the stick.
Foreigners should have to pay a bigger price to buy here.
I'm sorry, but I don't see the connection between putting obstacles in front of foreign buyers, and the other issues you mentioned (eg bail out money etc). Are you saying the bail out is bad, therefore we should make it hard for foreigners to buy US real estate? It sounds like a non-sequitur to me.
The mortgage backed securities were essentially junk bonds disguised as triple A rated bonds and sold off to unwitting foreign investors. The investors bought them thinking American homeowners were a reliable creditworthy bunch and were up to date on paying their mortgages. Big mistake.
So, should the Chinese be allowed to buy foreclosed US homes? Well, they already own the junk bonds (aka MBS) that are backed by US homes as collateral. Technically speaking, they have the right to demand possession of the collateral or have it liquidated to repay our debt to them. So I find it rather silly for people to complain that the Chinese can easily buy up our houses when, for all practical purposes, our houses already belong to them (at least those that have been foreclosed).
but what judges(and property attorneys, state attorney generals, consumer advocates, etc) are saying is that most of the time they dont have the proof that they own the property. i dont know the term exactly, but i know that some homeowners in default are going to the foreclosure proceedings and asking the bank(or whoever has interest in the loan) to provide the documentation on the loan, and sometimes its not available because paperwork was taken care of poorly or the loan has changed hands so many times they lost track of it. in cases like that the judge ends up dismissing the case because there is no proof the plaintiff controls the loan and the homeowner gets off free
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