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, 11:36 PM
 
Location: AL
2,477 posts, read 2,202,665 times
Reputation: 1007

Advertisements

Sooooo someone explain, why do I bother paying my mortgage on time?
Reply With Quote Quick reply to this message

 
Old 03-26-2010, 08:17 AM
 
2,639 posts, read 5,058,551 times
Reputation: 2346
Quote:
Originally Posted by odinloki1 View Post

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.
Because the banks would lose billions of dollars that they projected out. Of course, we "can't let that happen". Bankers know that if a home gets foreclosed, they can either write it off the books if it never gets bought, or some flipper will pick it up and be willing to pay for what they're offering it for. There are foreclosures in my area that are still over $400k, for a home that's worth maybe $200k. The prices stay high because people are buying at those prices. If everyone stopped buying the foreclosures, the prices would drop naturally. That's of course not happening, so the banks are trying to pinch every bit of profit from those who haven't foreclosed.

Regarding loan modifications maybe you haven't read the various news articles about the banks either (A) refusing loan mods, (B) making ridiculous modifications that don't really help the matter, i.e. $100 or so off of the monthly payment, (C) taking an abnormally long time to approve a modification, or (D) waiting until the borrower is a month away from foreclosure before considering it. Now the government wants to basically bribe the banks to do it? Wrong approach. The right answer is to give them an ultimatum:

1: Modify the loan so that it's affordable for the borrower based on their current income level as verified by paystubs or other documentation, and you've got NO MORE than 90 days from when the borrower contacts you to do it. If you don't do that, the government will fine the bank the difference between the value of the home and the current total amount owed. I guarantee you, banks will get off their butts and start modifying. If the borrower is unemployed, this rule does not apply.

2: Loans that are currently interest only convert to a principal/interest loan and configured so that the payment does not increase more than 25% of what the borrower is currently paying. However they need to work it to make this happen. Proof of income is required. Same rule applies; 90 days to comply.

3: Loans where the borrower's income could not have possibly met standards when they took out the loan and still don't, are eligible for "hand over the key" walk away with no foreclosure action. The borrower can be placed into collection actions for the remainder of the loan difference. Some might consider that unfair, but the reality is, you knew when you went in there that you didn't have enough to pay for the loan.

4: More scrutiny into why someone wants to buy a foreclosure or bank owned home. First time home buyers should get priority over all others, period. Why? Because they're least likely to foreclose given the new more strict criteria for lending AND it keeps flippers from buying up inventory.


My opinion on how to fix things. No bribery, just responsibility.
Reply With Quote Quick reply to this message
 
Old 03-26-2010, 08:42 AM
 
Location: Londonderry, NH
41,505 posts, read 49,566,735 times
Reputation: 24548
Most of the places now "underwater" were purchased by people wanting to play the speculation game. They and the bankers that encouraged these gamblers, can no longer make the margin calls. The result of the lost bet on permanently increasing prices is just that - a lost bet. Both the borrowers and the lenders suffer. If the bookie does not know, or the stock broker lending the margin or the banker making the mortgage does not know the markets mat stop inflating, they do not know their business and they should all be liable for the loss. The bookie loses his book, the banker his investment and the home speculator his down payment, any payments made and the property.

I did not play this game. I got a mortgage, refinanced to a lower interest and shorter time and am about to pay the place off. I did not get any speculative gains because I do not speculate. My in-laws got into the California market in the beginning and bailed before the collapse. They made a bundle and used it to rebuild a family farmhouse to the benefit of all of us. Good for them.
Reply With Quote Quick reply to this message
 
Old 03-26-2010, 08:51 AM
 
Location: Great State of Texas
86,093 posts, read 69,904,378 times
Reputation: 27519
Quote:
Originally Posted by GregW View Post
Most of the places now "underwater" were purchased by people wanting to play the speculation game. They and the bankers that encouraged these gamblers, can no longer make the margin calls.
They have to bail the speculators out because these are the types of people who will spend with no care. The responsible people are no good to them. They need people who will extend themselves beyond all means because they make money off of these types of people. They don't make money off of responsible people.
Reply With Quote Quick reply to this message
 
Old 03-26-2010, 03:54 PM
 
1,842 posts, read 1,452,388 times
Reputation: 169
Yip
Reply With Quote Quick reply to this message
 
Old 03-26-2010, 03:58 PM
 
Location: Sacramento
13,755 posts, read 23,223,535 times
Reputation: 6092
Quote:
Originally Posted by summers73 View Post
This has been an ongoing problem. I've never supported the modifications in the first place, and argued against them extensively when they were first proposed.

It is unfolding just like I thought it would. Now, they will go and expand the program by providing reduced outstanding loan balances.

Dumb program, poorly thought out.
Reply With Quote Quick reply to this message
 
Old 03-26-2010, 04:01 PM
 
1,842 posts, read 1,452,388 times
Reputation: 169
Quote:
Originally Posted by NewToCA View Post
This has been an ongoing problem. I've never supported the modifications in the first place, and argued against them extensively when they were first proposed.

It is unfolding just like I thought it would. Now, they will go and expand the program by providing reduced outstanding loan balances.

Dumb program, poorly thought out.
Smart program well thought out. Not for doing what it was supossed to but for compleating the ruin of America.
Reply With Quote Quick reply to this message
 
Old 03-26-2010, 04:07 PM
 
Location: Sacramento
13,755 posts, read 23,223,535 times
Reputation: 6092
Quote:
Originally Posted by newonecoming View Post
Smart program well thought out. Not for doing what it was supossed to but for compleating the ruin of America.
In that way it has been very effective.
Reply With Quote Quick reply to this message
 
Old 04-01-2010, 06:22 AM
 
Location: Raleigh, NC
20,006 posts, read 15,177,900 times
Reputation: 3739
Default Green shoots! Jobs cuts accelerated by 61%

Where is LordBalfor when you need him? I need someone to offer me some blind optimism and tell me that Obama is going to make everything OK.

Challenger: Employers planned to cut 61% more jobs in March - Apr. 1, 2010
Reply With Quote Quick reply to this message
 
Old 04-01-2010, 06:44 AM
 
Location: Central Maine
4,641 posts, read 5,341,821 times
Reputation: 4782
A little context would be nice.

The second paragraph of the story you linked to:
Employers announced plans to cut 67,611 jobs in March, according to outplacement firm Challenger, Gray & Christmas Inc. That's up 61% from February, when 42,090 jobs were lost, the lowest level in nearly four years.
So there's a 61% increase in job losses when March is compared to February, and the job losses in February were at the lowest level of monthly job losses in almost 4 years. This is not exactly "the sky is falling" material.
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.

2005-2018, 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