Deja vu - Mortgage Train gaining momentum!!!! (lawyer, Merry Christmas, statistics)

[Norm Barnes]

"Just Like to Complain??????" Wow!!!!! The property is underwater - a lower rates given them -- the resultant payment is lower --- possibly? Since all the complainers have done some research how much do you think a payment will decrease if it goes from the low 7's to 3.75%. Will this save them the frustration of a lower home value and paying on a mortgage which is greater than what the property is worth. Get real!!!!! Let's say you are one with this circumstance or you know a family member with this situation -- where do you think his mind is every time he makes a payment -- hmmmmmm!!!! Just complaining are we.

[Norm Barnes]

No response!!! The rate does result in a significant lower payment however what I was looking to respond was that a 30 Year amortized loan amortizes over 30 years regardless of the rate. The amount applied to principle chasing a balance which is out of line with its home value could seem like taking forever to catch up and the strain it will cause will be immense. I'd like something done reduced real estate taxes in line with today's actual values. Lending programs which are sensible. Job programs which provide training for those less fortunate to affford a 100K education. A National Lottery to assist education much like Florida. A Medical program that provides relief from excessive costs. There's many way the monies can be spent -- I don't think this program is one of them.

[LetsRock]

Originally Posted by mb1547

How is it punishing the banks? People are still paying their mortgages, and they'll be able to refinance to pay competitive rates with everyone else. Right now, if you have more borrowed on your house than it's worth, you can't get it refinanced to take advantage of lower interest rates. This will go ahead and let you do that. Our house is paid off in the next few months, but I'd be jumping on the around 3% interest rates (with the right credit) offered right now if we still had time to go.

Having your home value go down due to market changes is not the same thing as buying a house you can't afford. These people are still making their payments, but their house is worth way less than it was before. We've put major sweat equity into our house (a century old farmhouse), and we'd probably still make a profit if we had to sell, but our appraised value has gone down nearly $80,000.00 over what it was when we had it appraised after the remodel 5 years ago. If we had bought the house with all the work done, and paid market value, we'd be way under water on our mortgage too.

It punishes the banks because they agreed to loan you money at 6% and now you want them the accept all the risk and only earn 4% interest.

[UNC4Me]

Originally Posted by Norm Barnes

You know one thing you can say about enterprise is that the same thing can be dressed in many ways, take different shapes and be the same thing. I see ad's again about obtaing a home mortgage with bad credit scores. I sense that B. Obama is planning a refinancing of the refinancings which we used to consider as hiding the inevitable failure of a mortgage in days past. We have taken small steps to solution of the massive problem at hand but this notion that you can bail, bail, bail -- stroke, stroke, stroke will inevitably lead to his ship sinking. I had great admiration for this man taking on a job at such a disastrous time and was on board with many of his solutions but you lose me when it comes to rolling delinquency -- which unequivocally is what he is planning. We now have a weakened FHA and about to have a dose of refinancing which oft times will fatten the mortgage bankers with the incidental fees but do very little to support home values which needs to be done to keep the buyers of today's homes from value deterioration. You do that by liquidating the bad mortgages to the point that new purchases support existing home values. If I'm wrong tell me I'm wrong. This sounds like a couple of years deferral of the monumental problem that now exists and an incremental step to further destruction of property values. Tell me it ain't so. Will this plan protect the interests of FNMA, FHA, other programs and the money invested by institutional lenders and incidentally weaken lending programs overall. If the programs provide for partial charge offs of balances and refinancing in line with property values the economy will still be a mess because assessments are locked in to support tax needs by the communities who assumed that there spending levels could be locked based on the tax revenues from Real estate taxes. It is grossly unfair to be taxed on a $184K property that is now worth $130K. He has no program that provides a solution to the needed rollback of Real Estate Taxes in our communities -- he's dancing in the shadows.

Because it's the responsibility of your city/county to re-evaluate property values on whatever time table they have established. This just happened in my city (every 7 years is their time) and my tax bill went down a bit. I also know in my city, you can contest the value of your home when tax bills are created. Perhaps you could get some relief in that manner.

[GradyBaaBaa]

Originally Posted by Fox Terrier

Of course it doesn't. It wasn't meant to help home values.

Punish the banks? Don't you think they deserve a swat on the bottom?
(more than one, actually)

The only thing that is going to help home values rise is a rise in employment. But the republicans won't pass any jobs bill coming from Obama and they don't have a plan of their own, so ...

When a party states that their only mission is to prevent Obama from receiving any credit for anything he might be able to do to help the country, then that party owns the current crisis. Don't think people ARE NOT watching.

You must be getting stoned to death with your ows crew.

[baruchel23]

Instead of reducing interest rates or reducing the amount owed on a mortgage, how come we cant modify their loans to a longer payment cycle such as 35 or 40 year mortgages. If the owner truly loves living there why couldt they accept this idea? Their mortgage payment would be lower and the bank would eventually get the total amount owed. Lets face it, while rates are much lower than four years ago, 7% is still drastically lower than in the "old" days.

[Norm Barnes]

No easy answer for sure. Stabilizing home values is a step in the right direction. What it will take to stabilize the market remains to be seen. In the background though is some positive working by all those who have a 401K or matching conribution funds those monies will build and sooner or later they are going to pop and be invested most probably in housing. Probably like always it will come to happen simultaneously and have the negative impact of driving home values up too quickly unless regulated by the the FED. I feel for those underwater but to stop the bleeding the market has to be first stabilized. I think some innovative move to do this is needed. What it is God only knows.

[Cletus Awreetus-Awrightus]

Originally Posted by Norm Barnes

No easy answer for sure. Stabilizing home values is a step in the right direction. What it will take to stabilize the market remains to be seen.

No, it doesn't remain to be seen. Everybody knows good and well what it will take to "stabilize home values."

That is: reckless lending.

The more credit you extend, the more risks you take, the more housing prices will go up. That's why they went up in the first place. When you've saturated the market with bad loans, and the consumer rejects more debt (like right now), then you lower the standards even more.

As to WHY people are willing to destroy the entire financial system just to increase home values, is anybody's guess. My guess is that they probably work in the housing finance sector somewhere.

In the background though is some positive working by all those who have a 401K or matching conribution funds those monies will build and sooner or later they are going to pop and be invested most probably in housing. Probably like always it will come to happen simultaneously and have the negative impact of driving home values up too quickly unless regulated by the the FED. I feel for those underwater but to stop the bleeding the market has to be first stabilized. I think some innovative move to do this is needed. What it is God only knows.

God forbid we stop trying to pump money into housing to use it as a job stimulus, and we actually let land and real estate prices fall to a level where people can afford to buy them without government-backed credit.

Driving up housing prices artificially ultimately gives more money to the financial sector, because we all pay higher interest on the bigger mortgages we need to live in them. Do some of y'all make money in the deal? Sure, at the cost of the rest of us who are waiting for housing to fall to more realistic levels.

[Norm Barnes]

How far was regulators from the pulse of the problem?? Supervison in almost any field is stressful and even annoying. So what!!! Its needed to keep the ruthless from operating with reckless abandon. Federal and State Bank regulators are there for a purpose. How weak a system when a cup of coffee or a few drinks make them sympathetic to the operators in the field. Its not all that intentional when you like someone this can occur and every one who has had an audit knows what it is to be on your best behavior and aim to impress with friendliness and professionalism. Much of the lending I saw that was "Plain stupid" originated from private firms with a "Blueprint" and were backed by Bank Money. I find a few things to be prevalent in these firms with reckless ideas: 1) The plans were credit score based; 2) Their focus was on less paperwork; 3) Rate compensated for risk; 4) They paid large dividends to correspondents and lenders that offered their products. Lending became a temporary profession with the object of making as much money as you could with the minimum of effort and courting your peers with bonuses and field trips. This isn't uncommon -- I'm sure its done every day right up to the highest seat of office. We humans are weak and of a very temporary nature. We can be extremely good or extremely bad -- recently we saw an example of the extremely bad and are now suffering the consequences. Be watchful - very watchful - because I believe the unemployed financial crew that brought us disaster 2007 is now in the insurance business and will bring us another financial Armageddon.

[Norm Barnes]

Well when you think you saw it all -- well then cometh another chapter. About a week or two ago a property was listed as a short sale. A buyer made an offer for the full asking price but wanted to go FHA 203K because the perimeter of the basement had a 18 inch wide by 18 inch deep trench that needed to be attended. The 203K provides dollars for work like this to be done and seemed like a logical way to tender the offer. The lender a FNMA lender turned it down saying it did not have good experiences with 203K's yet a few(more than 2) FNMA appraisers agreed they would not pass the basement as it was. We learned a couple of days ago that the lender/seller has reduced the asking price by 20K and it is now listed for less than what the other buyer agreed to purchase it. Between the foolish remodifications and tales like this do you really think things will get any better -- I hope so.