Oops they did it again!!!! (foreclosure, mortgage companies, mortgages, sales)

[Norm Barnes]

I've read of 310+ Billions in bonus and payouts in the financial industries will be taking place. Amazing isn't it. Credit Suisse recently made a projection that by 2012 8.1 million homes will be up for foreclosure and that this will equate to 16% of all mortgages. Let me see if I can accurately portray how severe a problem this really is. If you recently purchased a property for $210,000 and placed 10% Down you would have financed a mortgage of $189,000 and from your P&I (Principle and Interest) of $958 about $709 would be chargeable to interest in the first month and decrease from that amount monthly. If a loan made in 2007 fails to perform say for the same amount there is a potential loss of $189,000 now more than likely the loss will not be that severe so lets say the loss is $28,000. In actuality the loss would be more immediate then I will describe. Your payment paid faithfully for 40 months will make up that loss. Now how about we scale that to a loss averaging about $42,000 per property and multiply that by 8,100,000 homes the lost could be as much as $3,402,000,000,000. This could be a predictable loss of 3 trillion, 402 Billion dollars. This may be doom and gloom or it could be a precipe to disaster. Fact is there has to be performing loans in portfolios to offset this dismal potential reality and we have made little baby steps towards offsetting these losses and at present rate it is highly unlikely that we will be able to accelarate portfolio growth enough to wipe out these potential losses. And so tighten your belt because although preaching tax reduction will get you elected - only tax increases can preserve the economy. Some of these monies must go to increase employment opportunities. The world doesn't have to end in 2012. Life as we know it will radically change unless we chart a course to correct this huge impending event. Now tell me is it realistic that financials payout 300 Billion?

[chet everett]

Taxes do not translate into jobs. Quite the opposite, higher taxes destroy the creation of employment.

Lenders do not need to have any theoretical reductions in the value of the property they lend on be made up.

OP does not understand real estate, employment, taxes...

[Flat2MT]

According to the federal government, they do....

[jmking]

310+ Billions in bonus and payouts on Wall Street=a jobless recovery? In my 53 years I still don't get this. Are we so global now what happens here in the states does not matter anymore. A communist regime (China) apparently does.

[Norm Barnes]

Chet -- I agree. Increased Jobs translates to more tax revenue. One thing that I have seen is that a boon in Real estate Sales and particularly refinancing creates an influx of monies in the municipal government tils because mortgage companies in refinancing a debt requires all these taxes to be current. Even acts of foreclosure recover this revenue. Improved home values also could - a monstrous could equate to more tax revenues based upon increased assessments. The fear I have is that decreased values of homes, poor job growth, lack of confidence, and a poorly directed Federal reserve will lead to a financial direction that will further deter recovery, stifle growth, and lead to a mega-disaster. Tax increases may be the method of Government recovery of these potential losses for which they will be called upon to administer. I see no other plausible alternative. I'm no reknown economist but I have seen delinquencies within a mortgage structure and it always seemed you had to wean your way back to a more solvent position by payment concessions, refinancing, and hopes that an improved economy will improve income of the delinquent and his home value increase will stabilize the potential loss.

[eric#1]

There are a variety of ways to establish a better environment for creating jobs. If there was only one way to do it (changing tax rates) countries with high rates would subsequently and automatically have greater issues with unemployment - when looking at all countries unemployment vs. tax rates there seems to be no correlation. List of countries by unemployment rate - Wikipedia, the free encyclopedia
Tax rates around the world - Wikipedia, the free encyclopedia One thing is for sure, governments that don't use tax $ to help establish an environment for the lower class to move out of poverty are stuck with their population buying rice and linen since the majority of the population can't afford a cow or a car.
The current corporate mindset is not doing enough to distribute profits to their employees - IMO that would be the fastest way to funnel $ in to the economy, if they keep distributing mass bonus's to the top our country will be no different than the 3rd world countries that do the same - you can't run a healthy economy on luxury items alone and that is what the upper level buys while the lower level just reduces the number of basics - lower tax rates for the upper end does not do enough alone to stimulate purchasing of basics on the lower and middle end (over 90% of the pop.) so why would businesses hire more people if they aren't selling more products?

Long story short, I agree with the OP - hoarding of mass $ at the top can most definitely contribute to the nations economic woes.

[Norm Barnes]

Based on data reported my MSN today the national debt is about 10.15 trillion dollars. If risks of 3.4 trillion was added to this national debt every family would go from oweing $86,019 (Reported by MSN) to almost $120,000. When is it time to start worrying? Mortgage Bankers would never want to hear of this suggestion but how about after financial review tacking the past due payments to the end of the contract if the individual can show that he can again honor payments (One opportunity per Household and no more than 4 payment extension). Wouldn't this be easier than throwing people out of their homes, extend the life of Private Mortgage Insurers and protect the vestiture of major bank holding companies and investors alike. How about Home Value Protection Insurance used in the depression era to insure buyers against risk of property values declining unreasonably -- risk insurable if value declines more than a predetermined % of original purchase price -- premium based upon insured risk. We have to think out of the box or our families will suffer and the problem is at our doorstep and cannot be ignored.