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Old_Cold, I'm not going to go to the trouble to explain it again, especially to another inflexible, narrow-minded person that has it all figured out. If you are truely interested, you will go back and read through the thread. Your sarcasm is not appreciated and it appears that mostly in this forum, there is no room for meaningful discussion, there is only room for denegration of each other and/or any new ideas AND you absolutely don't know what you are talking about!
I'll just let you people turn your know-it-all attitudes toward each other as you have nothing else constructive to offer. Shame on you!
ccmusica, with all due respect, you have responded to several people who disagree with you with the comment that they obviously don't understand your idea. Is it possible that we are all right and you are wrong? Disagreeing with your proposal doesn't mean that someone is "inflexible" or "narrow-minded." You need to open up your own mind.
ccmusica, with all due respect, you have responded to several people who disagree with you with the comment that they obviously don't understand your idea. Is it possible that we are all right and you are wrong? Disagreeing with your proposal doesn't mean that someone is "inflexible" or "narrow-minded." You need to open up your own mind.
I don't mind people disagreeing with me. I have only responded that way when people have accused me of having an idea whose intent was underhanded, self-serving, and quite frankly, didn't understand it, otherwise they would not have responded in such a manner. I am very disappointed that people in this forum cannot have a discussion without being accusatory, demeaning, sarcastic, and mean spirited...and I am supposed to just ignore it? If you go back and read through the posts, I was not that way to anyone until they started "attacking" me personally as having devious intentions. By the way, you were also demeaning and accusatory, but I didn't come back at you did I? Can't people just disagree without trying to belittle someone???
I apologize for my behavior letting this discussion devolve into what I was trying to avoid, name-calling and belittling. I am only human and I, like anyone else, have a hard time ignoring personal snipes.
Here is the heart of my frustration: The only arguements I have heard are from a personal moralistic, judgemental standpoint, and nothing that refutes the possible viability of this plan from a purely economic standpoint.
My question is, purely from an economic standpoint, if my plan has potential and works to help lenders mitigate losses, shouldn't it be considered?
I apologize for my behavior letting this discussion devolve into what I was trying to avoid, name-calling and belittling. I am only human and I, like anyone else, have a hard time ignoring personal snipes.
Here is the heart of my frustration: The only arguements I have heard are from a personal moralistic, judgemental standpoint, and nothing that refutes the possible viability of this plan from a purely economic standpoint.
My question is, purely from an economic standpoint, if my plan has potential and works to help lenders mitigate losses, shouldn't it be considered?
We have refuted the economic viability of your plan many times and it has nothing to do with a judgment about the borrower's ethics. Under your plan, the amount of outstanding loans owed to the lender doesn't change, but the value of assets owned by the lender is reduced. That is not good for the lender. Which part of that do you disagree with?
We have refuted the economic viability of your plan many times and it has nothing to do with a judgment about the borrower's ethics. Under your plan, the amount of outstanding loans owed to the lender doesn't change, but the value of assets owned by the lender is reduced. That is not good for the lender. Which part of that do you disagree with?
The part I disagree with is that the value of the "swapped" REO is substantially increased ($375,000 vs. $300,000) over asking price, larger than the margin of reduced value on the "buyer's" house, thus a net gain for the lender, regardless if the loan is a new one or an old one.
The part I disagree with is that the value of the "swapped" REO is substantially increased ($375,000 vs. $300,000) over asking price, larger than the margin of reduced value on the "buyer's" house, thus a net gain for the lender, regardless if the loan is a new one or an old one.
Let me just make sure that I understand your reasoning. You believe that the house that the lender gives to the borrower who is "trading up" (i.e. the more valuable house) will automatically and immediately have an increased value once it is in the borrower's hands (presumably because it is no longer bank-owned)? And you further believe that the house that the borrower gives back to the lender (i.e. the less valuable house) will automatically and immediately go down in value when it is transferred to the lender (presumably because it will become bank-owned). BUT, you believe that the increase in the first house will be greater than the decrease in the second house.
OK...I'll admit to using memory to come up with figures.
I just re-read and can see where my last post concerning selling yours plus borrowing $25 more would have annoyed you.
Those figures didn't apply at all and it just ended up being stupid
(I don't mind being stupid occassionally....it keeps me humble
Let me explain something...home values are established 2 ways; approximate value by appraisal, and actual value upon transfer of title. If on the transfer of title the REO is valued at $375,000 then that is the basis (value) of the house. Even if the appraisal comes in much higher, the actual value of the house is what it transfers for. The bank uses the transferred amount to calculate its profits and losses. Tranferred home values are what establish market values, up or down.
The banks would not go into this blindly and hope for the best. Different areas have different discount margins for selling REOs. The banks would probably qualify people on the basis of appraisals of both houses. If the bank assesses that they will probably realize a net gain by the deal with the 2 houses, then it goes through. If the average REO discount is 20% for a given area, then it might work. If the average REO discount for a given area is 50% (such as certain areas in LA) then it probably would not work.
The banks would have the ultimate say on who can participate and who can't. People would have to apply for these trades, and through appraisals and economic demographics, the banks would evaluate if it is feasable to realize a net gain from the deal. If they felt they couldn't make enough "net profit", they would probably turn down the applicant.
OK...I'll admit to using memory to come up with figures.
I just re-read and can see where my last post concerning selling yours plus borrowing $25 more would have annoyed you.
Those figures didn't apply at all and it just ended up being stupid
(I don't mind being stupid occassionally....it keeps me humble
You might want to hold that hug.
The posting with erroneous figures during pre-dinner cocktail time doesn't mean I still don't see flaws in your proposal.
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