foreclosure idea (real estate, foreclosures, mortgages)

[yamahastar]

Since there are so many foreclosures nation wide, I have an idea. First, we set asside the lack of planning by the home owners that bought through subprime rates, the idiot banks who backed this and the real estate companies who knew these people would never be able to pay. Since interest rates from bank to bank is so low why not pass that on to these home owners. Charge them one per cent interest for remaining balance on their much too large homes for their pocketbooks. The banks would still make some type of profit, even though this is what they are not accustomed to. They should automatically reduce length of paying for a home. Reduce terms to 15 years max. If a subprime home then cannot be paid for so be it. I am tired of poor management and being rewarded for doing so. What do you guys think?

[msta999]

I agree! I have been against the bail outs since the beginning. If the banks really wanted to stop most of the foreclosures, they could have changed the loans to fixed at a low rate. Also, I have no problem with poorly run companies being bought out by well run companies. Tell me this, why is it, you never hear of Credit Unions having the problems banks do?

[blackhillsdreams]

Actually, we're paying for BOTH now. The bail out money is probably supplementing the bad loan money so they can make their "margins" (hate that word) work as ORIGINALLY planned AND, many shaky loans are being modified to try to make them work out without foreclosing. The banks still make a profit on the loan mods AND get bail out money from what I can tell...

[DRvortec]

Originally Posted by msta999

I agree! I have been against the bail outs since the beginning. If the banks really wanted to stop most of the foreclosures, they could have changed the loans to fixed at a low rate. Also, I have no problem with poorly run companies being bought out by well run companies. Tell me this, why is it, you never hear of Credit Unions having the problems banks do?

Agree! We should NOT reward the banks who are not rewarding the home owners. For every home they "save" refi, loan modification. We will then match their bail out is how it should have been done. Show us a house $250k you just helped by loan modification and we will issue you a check for $250k!

I know sooooo many people (personally) who have walked away and bought another house. Why pay $350k on current house when they could go buy a house down the street. Same neighborhood for $225k! Then BK (chapter 7) old house out. Harder now with banks not loaning. But, last year it was done a lot. Instead of the bank doing a loan modification. I have seen houses that had owed $320k and now after bank owes it, they are selling it for $225k! Ummm what college educated person thought taking the home back at a loss of almost $100k BESIDES foreclosure fees and other fees would be cheaper than giving that person a $500 a month reduction for "x amount" of time?

[yamahastar]

I do not fault the people who sold their homes for huge profits during the real estate bubble. At some point the banks need to show a margin of loss which use to be a mere 5%. Why does the government allow two men to decide who gets the bail out money? It should encourage even more people not to pay their mortgages. They could just request bailout money from our government. LOL.

[Chris19]

I have mixed opinions, but the lenders need to do a better job of working with homeowners. I would suggest that the subprime owners and those with arms have a fixed-rate loan at reasonable rate, so that they can have a better chance of getting back on their feet. The banks need to do their part but the homeowners have responsiblities. It is a two-way street.

Both banks and homeowners got hurt, although responsiblity and sensibility is definitely needed.

Regarding foreclosures, the banks will end up taking a loss on a good chunk of their properties. They will either need to discount their property in this depressed national housing market or eat up more money with paying taxes along with mainting and securing the property. If the bank is not maintaining and securing the property, it is doing a poor job of protecting its secured property. Either way, the banks will eat up money.

Just handing money to the banks is not the solution. There has to be reasonable and logical terms to ensure the money is to help free up the credit markets for borrowing to consuemers of good credit and to help the banks work with their borrowers who are having trouble (due to job loss, medical problems, etc.).