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A bank takes in depositors money and loans it out on purchases such as homes, cars , etc to make an interest fee. If the principle is not paid nor the interest who is the biggest loser?That money lent is the depositors money.
The FDIC is there to protect the peoples money to a degree. 250 thousand for each depositor is guaranteed by the FDIC. The government backs the FDIC. The government is the taxpayer.
Then perhaps you should have a word with Clinton for deregulating banks so they could play haphazardly with depositors' monies.
Would paying off a 30 year mortgage in 10 years cut your effective interest rate paid by a third as well?
Example:
30 years @ 6.125% paid off in 10 years would be the same for the borrower as paying 2.042% for that 10 year period.
Depends on the loan, but yes... it can if someone gets the right loan. If they double up payments or triple up them, they could effectively get the home with much less paid over time.
Then perhaps you should have a word with Clinton for deregulating banks so they could play haphazardly with depositors' monies.
Deregulation isn't nor was ever the problem.
The argument made by those for more government control is to effectively remove responsibility from the buyer. If the lender violates the agreement, this is a wrong and will be dealt with in court anyway. Regulation only puts a means for companies to gain advantage through lobby.
The argument made by those for more government control is to effectively remove responsibility from the buyer. If the lender violates the agreement, this is a wrong and will be dealt with in court anyway. Regulation only puts a means for companies to gain advantage through lobby.
Why can not the buyer be responsible here?
I agree with you, and I am all for responsibility. However, we have learned that individuals will gladly take a risk when they can flip a house and clear $100k in 6 months. However, there are very, very few who can honor a $100k drop, so they bail. So, allowing that kind of gambling is terribly risky. Real estate is just to big for individual speculation. This whole meltdown proved it. I am not excusing anyone, buyer or banker, but the truth is when billions, probably trillions in equity are manufactured through real estate speculation or simple herd effect buying by many thousands of people, no entity except the whole middle class can pick up the bill when it crashes, and it nearly sunk us. This can never happen again, and it will if controls are not in place. Bear in mind that the same meltdown that bankrupted our government and left millions underwater enriched hundreds of thousands, perhaps millions in the same society. It was a grotesque chapter in our history, where irreponsibility was rewarded by hardworking Americans. Never again.
The argument made by those for more government control is to effectively remove responsibility from the buyer. If the lender violates the agreement, this is a wrong and will be dealt with in court anyway. Regulation only puts a means for companies to gain advantage through lobby.
Why can not the buyer be responsible here?
Are you suggesting all responsibility for failed speculative lending should fall onto the borrower?
When all those borrowers put their name on the contract it is their responsibility to pay that mortgage. To sit in a home for free for years and deliberately not paying their mortgage is fraudulent. I do not support them as many others struggle to pay their mortgages each month.
These people are abusing the system , some states , it takes up to three years to go through the mortgage process. Many buyers of expensive homes have put no money down and live in homes they could not afford in the first place.
The lawyers are collecting money in the process. The banks are in trouble now and it may well do the United States economy in,- for millions of mortgages are not being paid to the banks.
That means banks have no money coming in to lend to new buyers of homes and the selllers of homes will not find buyers who can get any financing from the banks. It is a danger to our economy , more than one can imagine.
It could collapse our banking system and FDIC will be broken, and our government could well go into bankruptcy trying to help this entire financial catastrophe. The banks may go belly up leaving our government holding the bag.
The only reason home owners are able to stay in their homes for so long without paying is BC the lenders aren't foreclosing. Your gripe, then, should be directed at the lenders that are strategically dragging their feet.
The only reason home owners are able to stay in their homes for so long without paying is BC the lenders aren't foreclosing. Your gripe, then, should be directed at the lenders that are strategically dragging their feet.
The banks are not dragging their feet. It was the robo signing that slowed down the foreclosure rate to a trickle.. They now have to take much time in the paperwork to track the mortgage. The banks are overrun with tens of thousands of foreclosures.
The Foreclosures will again start up soon and it will be a huge wave coming in 2012.
Plus the banks have to have money 5 times what the mortgage is sitting on their balance sheets, this is required by the fed.. each mortgage is gladly sold to get it off the banks books because the money that is needed to cover what is on their books is a strain on the bank.
The banks are not dragging their feet. It was the robo signing that slowed down the foreclosure rate to a trickle.. They now have to take much time in the paperwork to track the mortgage. The banks are overrun with tens of thousands of foreclosures.
And if, when loans were sold, often even before the first mortgage payment was made, lenders weren't so quick to bundle and sell what they knew to be crap and greedy investors/lending institutions weren't so quick to buy crap, with no paper backing it up......... oh, but, no, I forgot. We don't hold corporations to the same standards as the average American. They are bullet proof. Freakin teflon.
I'm embarrassed to say that I was working in the closing department of a major home builder during this cluster f of greed. Starry-eyed families that were told that they could afford a first and a balloon mortgage. Average Joes that believed that if the lender said they could do it, they certainly could. After all, the lender wouldn't make a risky loan. The lender knew more about rising property values than they did.....
Were there greedy folks out there? Yes. I outed a guy with six fraudulent loans, all set to close on the same day. But I saw the families at the closing table- their kids and all their belongings in a truck outside, just waiting to sign on the dotted line and live the American dream that they never thought they would have. They believed the lie. And now they get kicked in the gut by their neighbors who are holier than thou and talk about ethics.
Last edited by Magnolia Bloom; 08-15-2011 at 07:12 PM..
And if, when loans were sold, often even before the first mortgage payment was made, lenders weren't so quick to bundle and sell what they knew to be crap and greedy investors/lending institutions weren't so quick to buy crap, with no paper backing it up......... oh, but, no, I forgot. We don't hold corporations to the same standards as the average American. They are bullet proof. Freakin teflon.
I'm embarrassed to say that I was working in the closing department of a major home builder during this cluster f of greed. Starry-eyed families that were told that they could afford a first and a balloon mortgage. Average Joes that believed that if the lender said they could do it, they certainly could. After all, the lender wouldn't make a risky loan. The lender knew more about rising property values than they did.....
Were there greedy folks out there? Yes. I outed a guy with six fraudulent loans, all set to close on the same day. But I saw the families at the closing table- their kids and all their belongings in a truck outside, just waiting to sign on the dotted line and live the American dream that they never thought they would have. They believed the lie. And now they get kicked in the gut by their neighbors who are holier than thou and talk about ethics.
Good example. When I bought our home, I was told to immediately get a realtor and mortgage professional to get pre-approved. Little did I know they were all in on the take, and getting honest information was near impossible. Many people move into a new area and depend upon their realtors to be the experts on housing trends. It is a textbook case of what happens when an industry controls nearly all the information and can manage the message. Sure there were greedy fools, but many more had absolutely no clue about the larger market patterns. And towards the end, anyone who could fog a mirror, and many who couldn't could get pre-approved for loans. Sleaze all the way through.
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Cry me a river
