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Old 12-21-2008, 08:04 AM
8,945 posts, read 7,908,000 times
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Their credit is already damaged by the delinquent payments. The foreclosure will eventually come off the credit report, usually by the time the real estate cycle bottoms.

Even in good times, loan modifications have had high rates of re-default. The system was able to put off the defaults because of the rapid prices increases and the repetitive refinancing to pull out cash and keep payments up to date. Without lending standards allowing for very high loan-to-value ratios, this Ponzi scheme wouldn't have been available.
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Old 12-21-2008, 08:28 AM
Location: Nebraska
4,178 posts, read 9,650,776 times
Reputation: 9592
Originally Posted by HappyTexan View Post
I think it would have been an excellent program had some regulations been in place to make sure people got homes/mortgages they really could afford.

They (the gov't) were acting like it was only a high interest rate problem with ARMs resetting when it was actually much, much more. Interest resets were the least of their problems.
The whole problem started when Congress (with Obama's FULL support, BTW) decided to demand that lenders 'put everyone in a home' and lower their qualifications for getting loans. Sorry, everyone does NOT 'deserve' to own their own home- especially when they have no income, no credit record, and no inclination to pay off their debts even prior to purchasing a home. Congress demanding that the restrictions be eliminated or lowered is what caused the problem in the first place - now they get to pretend to be saviors.

I know a girl who worked minimum wage, a 40-hour-a-week job, hubby worked 15 hours a week as a magician, and they had two young children. She was 'qualified' for a $256,000 home - and then bought a brand new car right afterwards. They never made a single payment on the house, lived in the house for two years before the bank reposessed - but they were 'qualified'. As someone who has worked all her life to get what she wanted, I was appalled at who was getting loans - and as far as I'm concerned, getting evicted is their just desserts. No sympathy here. Those who think that the world or taxpayers 'owe' them a living - be they individuals, banks, or Congresscritters - ought to get what they deserve. Sady, they rarely do.
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Old 12-22-2008, 09:28 AM
Location: Great State of Texas
86,068 posts, read 74,801,293 times
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Re-defaults on the rise. Even with modifications many people still could not afford the home they bought.

Mortgage re-defaults rising with no sign of slowing - Yahoo! News (http://news.yahoo.com/s/nm/20081222/bs_nm/us_financial_defaults_4 - broken link)
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Old 12-22-2008, 05:11 PM
Location: Los Angeles Area
3,306 posts, read 3,559,622 times
Reputation: 592
Originally Posted by neil0311 View Post
So allowing a foreclosure, walking away, and ruining your credit is better than living in the house for a few years until the market improves? It's not a "clean slate". It's a damaged credit record . I don't understand that logic.
Yeah, in a "few years" when the market improves.... Going to take much longer than a mere "few years" for nominal prices to return to peak.....unlikely to see a return in real pricing in our life time.
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