U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Politics and Other Controversies
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 03-25-2010, 04:04 PM
 
12,870 posts, read 12,897,016 times
Reputation: 4451

Advertisements

Quote:
Originally Posted by odinloki1 View Post
Debatable. Myself, my wife ad many others I know in the Tucson area are strugglig, but are being responsible and paying off houses that are underwater. Too many responsible people are being made to pay for the mistakes of the banking industry and house flippers.

Loans don't need interest rate readjustments. They need value readjustments. If your home is worth 25% less than the mortgage you took out on it, it gets lowered to that value. This would have been a win win for all parties (except maybe the banking industry, but its primarily their fault anyways). Deflate the bubble, plain and simple.

This should have been an option for people months ago and could have averted a lot of this recession. Fewer people lose their homes, more people who are responsible have more money to spend, thus stimulating the economy. Less foreclosures, fewer homeless, everything. Why this wasn't done is beyond me.

If you're this solution would reward the irresponsible, first of all, I'd rather reward irresponsibility accidentally, than punish responsibility accidentally. Second, make it optional for people to get the readjustmet done, and if they agree to it, they can't sell the house in the next five years, for more than the value of the house at the time they enter into the agreement.

Right now, the solution is punish everybody in the hopes of catching a few people who deserve it. This doesn't make sense to me and only a few rich people actually win out when the banks foreclose on homes.
the best way to handle it at the time was to NOT bail anybody's butt out, and let them extend the length of the mortgage loan. that would have kept their payments low, allowed people to stay in their homes, and helped price stability. keep in mind that 1/3 of all houses were owned outright and there was no reason to punish all those responsible homeowners by lowering prices for other people, unless you plan on giving the homeowners a cash rebate for the difference......

instead, the government butt in, allowed people to swoop in and do some questionable, perhaps illegal, housing deals, bailed some people out while denying other people, made a lot of people resentful of each other, kept some foreclosures from even entering the marketplace, and threw away a lot of taxpayer money.
Reply With Quote Quick reply to this message

 
Old 03-25-2010, 04:07 PM
 
Location: Chicagoland
41,314 posts, read 38,858,708 times
Reputation: 7106
Quote:
Obama Program

President Barack Obama’s administration is pressuring lenders to alter loans to reduce the number of properties lost to foreclosure. About 4.5 million foreclosures filings are expected in 2010, according to RealtyTrac Inc., an Irvine, California-based seller of default data.

A government watchdog report released today criticized the government’s main foreclosure prevention effort, the Home Affordable Modification Program, or HAMP, for “spreading out the foreclosure crisis” over several years by failing to help enough troubled borrowers.
That's a huge number.
Reply With Quote Quick reply to this message
 
Old 03-25-2010, 04:10 PM
 
13,072 posts, read 11,193,421 times
Reputation: 2607
Quote:
Originally Posted by newonecoming View Post
The housing market is correcting from over production and over pricing. trying to keep this from happening is like trying to make water flow up hill.
I wish it would hurry up and come to this realization, I am looking to buy when it does reach sane levels again.
Reply With Quote Quick reply to this message
 
Old 03-25-2010, 04:14 PM
 
1,842 posts, read 1,468,466 times
Reputation: 169
Quote:
Originally Posted by Nomander View Post
I wish it would hurry up and come to this realization, I am looking to buy when it does reach sane levels again.
The sooner it does the sooner we get the pain over. But Obama is trying to keep it from happening and in Japan they have been at it for 20 years now.
Reply With Quote Quick reply to this message
 
Old 03-25-2010, 04:19 PM
 
2,229 posts, read 1,330,544 times
Reputation: 623
Quote:
Originally Posted by Holdencaulfield View Post
"More than half of U.S. borrowers who received loan modifications on delinquent mortgages defaulted again after nine months"

Banks will not modify loans until the owner's loan is delinquent. If you are all caught up and responsible, they will not modify. You have to be several months late in order for them to consider you for a loan mod. No wonder they are defaulting. Not to mention that many loan modifications take 9 months to be approved. Add that to 3-5 months late and you are looking at 12 months behind in payments. Bankers are incompentent, no wonder they are defaulting. Modify the loans quickly before they are late, do this only for the customers who have been responsible, and you will see this number drop drastically.
Completely false. The HARP program, installed side by side to the HAMP program moves to re-finance people that ARE current on their current loan. In an effort to allow people under water on the mortgage the ability to obtain lower interest rates, the HARP program was installed to allow a loan to equity refi up to 125%.

Sorry, but your entire post is just completely incorrect. We were looking at refinancing under the HARP program, but backed down when we didn't agree with the banks appraisal and didn't like the percentage decrease compared to closing costs.

If we would have moved forward, we would have closed the refi in about 2 months.

This bondoggle is just exactly what is wrong with allowing the government to try and steer the market. It never works and only causes people to become more dependant. The market should have tanked all the way down, and all of those people who couldn't afford the houses they were in should have been foreclosed on. They would have relocated to rental housing (like I am sure they were before they bought a house they couldn't afford) and the market would reboot itself.
Reply With Quote Quick reply to this message
 
Old 03-25-2010, 04:23 PM
 
2,691 posts, read 3,039,866 times
Reputation: 978
Quote:
Originally Posted by floridasandy View Post
the best way to handle it at the time was to NOT bail anybody's butt out, and let them extend the length of the mortgage loan. that would have kept their payments low, allowed people to stay in their homes, and helped price stability. keep in mind that 1/3 of all houses were owned outright and there was no reason to punish all those responsible homeowners by lowering prices for other people, unless you plan on giving the homeowners a cash rebate for the difference......

Wow you must love the banks, extending the term on loans is a reward to them, tons more interest. Do you have a stat to see how many underwater homes are being paid off on time?

That 1/3 you're speaking of, they're being hurt right now, their homes are losing value, plus foreclosures in the neighborhood aren't any help. Just because they were paid off before, doesn't mean they aren't losing value now because their neighbor foreclosed.

instead, the government butt in, allowed people to swoop in and do some questionable, perhaps illegal, housing deals, bailed some people out while denying other people, made a lot of people resentful of each other, kept some foreclosures from even entering the marketplace, and threw away a lot of taxpayer money.
Agreed that the govermet's approach was wrong. However, if nothing is done and foreclosure become rampant. You're going to have tons of empty houses because noone will have the credit to purchase them. No one wins in that situation but the banks.

Perhaps you desire to teach stupid people a lesson. Fair enough. But the lesson I've learned is that there needs to be more government restriction on mortgage practices, and frankly, the banking industry is fairly incompetent, perhaps even more so tha the federal government. This essentially is all the fault of people trying to make a quick buck. This whole thing could have been averted if the govermet performed some takeover, and again, responsible people wouldn't be punished for the mistakes of the greedy and stupid. Not the lesso you wat to teach I think.
Reply With Quote Quick reply to this message
 
Old 03-25-2010, 05:14 PM
 
1,038 posts, read 1,042,884 times
Reputation: 265
Quote:
Originally Posted by jcarlilesiu View Post
Completely false. The HARP program, installed side by side to the HAMP program moves to re-finance people that ARE current on their current loan. In an effort to allow people under water on the mortgage the ability to obtain lower interest rates, the HARP program was installed to allow a loan to equity refi up to 125%.
"More than half of U.S. borrowers who received loan modifications on delinquent mortgages defaulted again after nine months, according to a federal report. "

We can safely assume that this article was not referring to the HARP or HAMP program, or that banks were not following the proper guidelines, as the article references "DELINQUENT" mortgages

Quote:
Sorry, but your entire post is just completely incorrect. We were looking at refinancing under the HARP program, but backed down when we didn't agree with the banks appraisal and didn't like the percentage decrease compared to closing costs.

This bondoggle is just exactly what is wrong with allowing the government to try and steer the market.
So you had no problem taking advantage of a government program initially. After you decided you didn't like the appraisal and decided not to participate you decided the government should not get involved.
Reply With Quote Quick reply to this message
 
Old 03-25-2010, 05:17 PM
 
Location: Raleigh, NC
20,017 posts, read 15,371,010 times
Reputation: 3745
Quote:
Originally Posted by odinloki1 View Post
You're going to have tons of empty houses because noone will have the credit to purchase them. No one wins in that situation but the banks.
How do the banks win when the only people who can buy homes are the ones with cash, bypassing the mortgage process and eliminating the banks from the loop?
Reply With Quote Quick reply to this message
 
Old 03-25-2010, 05:39 PM
 
2,691 posts, read 3,039,866 times
Reputation: 978
Quote:
Originally Posted by summers73 View Post
How do the banks win when the only people who can buy homes are the ones with cash, bypassing the mortgage process and eliminating the banks from the loop?
How does anybody but the rich win in that scenario? All the foreclosures will be bought by people with money who will just rent them out. Rent is overpriced in most places to the point where saving is close to impossible on most wages. Saving up enough for some ownership would be equally impossible.
Lets just create a land of serfs and lords while we're at it.

I love the idea of eliminating banks from the loop, don't get me wrong, but I also want people to be able to own. Renting is giving up freedom, you are at the will of a few landlords who set the prices and you must do what they want. If you ever become sick or can't work, then you're out on your a$$.

If housing was affordable, or decent wages were paid so saving is possible, I'd completely agree with the notion you have. But its not. I personally think the government can function as a better lending venue than any bank if it wanted to. (can't wait for the responses for that one) Similar payment policies, just little or no interest because they don't need to pay multimillion dollar CEOs, bank beauracracy, and everything else that makes banks inefficient. Plus values are assessed anyways every year or two, and it could be better determined if people were overpaying because of market demand. Could probably prevent another bubble.

Last edited by odinloki1; 03-25-2010 at 05:48 PM..
Reply With Quote Quick reply to this message
 
Old 03-25-2010, 05:41 PM
 
1,914 posts, read 3,075,552 times
Reputation: 1084
Quote:
Originally Posted by odinloki1 View Post
Agreed that the govermet's approach was wrong. However, if nothing is done and foreclosure become rampant. You're going to have tons of empty houses because noone will have the credit to purchase them. No one wins in that situation but the banks.

The banks don't win. They are left with unpaid loans, empty houses they have to pay property taxes on, empty houses that fall apart very quickly when the elements are left to attack, no up-keep, squatting, vandals, etc. Then they have to try to sell the house - which also can take a long time and especially when the house has been sitting in inventory and been a victim of the elements, etc.

Perhaps you desire to teach stupid people a lesson. Fair enough. But the lesson I've learned is that there needs to be more government restriction on mortgage practices, and frankly, the banking industry is fairly incompetent, perhaps even more so tha the federal government. This essentially is all the fault of people trying to make a quick buck. This whole thing could have been averted if the govermet performed some takeover, and again, responsible people wouldn't be punished for the mistakes of the greedy and stupid. Not the lesso you wat to teach I think.
I wouldn't say "stupid" I would say "in over their heads and KNEW it". If someone couldn't pay a $375K mortgage when lenders were being strict on the ability to qualify for that amount of a loan, they couldn't afford a $375K mortgage when it was easy to get that amount of a loan. You either had it or you didn't. You could either pay the mortgage or you couldn't.

Both sides of the coin are at fault...especially the people who bought something they couldn't afford no matter the terms and KNEW it. Banks made risky loans and lost more than the person who put 0% down and bought a $500K house that they KNEW they couldn't make the monthly payment on - homeowner gets a lis pendens and can fight it for a long time...bank isn't getting a dime. Homeowner isn't paying a dime for anything, not paying taxes, not paying water/sewer/electric ....but they got a free place to live (and probably took out a HELOC in the meantime and spent all that $$ they had no way to pay back either) for a year or so after the first NOD.

Responsible people should not be punished for the crimes of others, I agree. I was speaking with a mortgage broker the other day and he told me (after I was exasperated with his answers) that he has a "professional sports" client who lives in a $5M home. He tried to refinance his mortgage and he was denied. Now the home is paid for, the bank didn't like his "reason" for wanting to refi and pull around $300K out of his equity. That's how BAD it's gotten.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Politics and Other Controversies
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2019, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top