Congress forces mortgage modifications

re: Congress forces mortgage modifications

Alessandra — Thu, 26 Mar 2009 12:28:49 GMT

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Alessandra

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re: Congress forces mortgage modifications

Lynn — Wed, 28 Jan 2009 18:22:16 GMT

We need a revolution! I just cannot understand the ideals of the banking industry with respect to their lack of interest in modifying loans to keep families in their homes. To my limited knowledge, the loan holders electing to foreclose on so many homes is another catestrophic loss for America. To have so many families homeless, unemployed, and neighborhoods of vacant homes held by a slew of lenders....how does an economy recover from these ideals? I know my lender does not care, their on the top 10 list of preditory lenders. Why do I live in a America like this? Where are the principals of those who fought and died for a better life in this blessed land? Where is my government?

Lynn in Florida

re: Congress forces mortgage modifications

chris — Thu, 15 Jan 2009 10:49:42 GMT

Instead of having cramdowns the banks/government should rerfinance all the distressed homes at say 4.5-5.0 % at present net value so that it stabilizes home prices. There has to be a major caveat in that the home owner has to be owner occupied and stay there for say 10 years and then they can move out/sell their home. Any money gained from any sales past the the refinanced amount goes bank to the bank or holder of the original mortgage untill the orignal amount is paid and any amount beyond this goes back to the homeowner. Mortgage backed securities were bought by more than just banks i.e. retirement accounts and others. To prevent futher homeowners from defaulting and that are current on their existing mortgages, refinance them at say 3.5-4% loans 30 year fixed. This would decrease their payments and hopefully let them spend more. Once the housing markets stabilizes go back to stricter lending standards with a significant down payment, a cash reserve, and verifiable income.

re: Congress forces mortgage modifications

Suck it up Wallstreet — Wed, 14 Jan 2009 04:31:51 GMT

Hope you got the message Todd and Andy. Looks like most people completely disagree with your bank industry sided scenario. Time we did something for the people of this country.

By the way, are you all bank lobbyist?

re: Congress forces mortgage modifications

Eat this one Wallstreet!! — Wed, 14 Jan 2009 04:17:21 GMT

I think you're completely wrong Todd. Mortgage rates for other (2nd, 3rd, vacation etc.) have not changed and bankruptcy has allowed loan modiications or these for a long time. All the banks want us to think this and if it does happen it'll only be a self fulfilling prophecy. The banks are going to lose money on these properties anyway. Why would the banks resist and through up such hype? Well they're going to lose all that high rate ARM money, duh. If they can keep draining a little more high rate interest out of these properties before the families finally collaspe financially then that's more in the pocket for them. They could care less about the homeowner.

Most of the banks fighting this have already taken taxpayer TARP funds so why not help people stay in these homes. The banks already have more foreclosed and distressed properties than they can responsibily handle already. Suck it up Wallstreet!

re: Congress forces mortgage modifications

Fredrik — Tue, 13 Jan 2009 04:40:24 GMT

David, you're overstating the numbers there QUITE a bit. You stated

"here is the truth about what to expect people, and i think he very very light

The U.S. recession will last seven full years, with gross domestic product falling a cumulative 25%, said Nouriel Roubini, chairman of RGE Monitor. Roubini was one of the first economists to predict the recession and the credit crunch stemming from the housing bubble. For 2009, Roubini predicts GDP will fall 23.5% with declines in every quarter of the year. The unemployment rate should peak at about 19% in early 2011, he said. Consumer prices will fall about 20% in 2009. Housing prices will probably overshoot, dropping 64% from the 2008 through mid-2010. "The U.S. economy cannot avoid a severe contraction that has already started and the policy response will have only a limited and delayed effect that will be felt for years to come he see at least 7 years of decline."

Here's the actual article. Get your facts stright numnuts....

WASHINGTON (MarketWatch) -- The U.S. recession will last two full years, with gross domestic product falling a cumulative 5%, said Nouriel Roubini, chairman of RGE Monitor. Roubini was one of the first economists to predict the recession and the credit crunch stemming from the housing bubble. For 2009, Roubini predicts GDP will fall 3.4%, with declines in every quarter of the year. The unemployment rate should peak at about 9% in early 2010, he said. Consumer prices will fall about 2% in 2009. Housing prices will probably overshoot, dropping 44% from the peak through mid-2010. "The U.S. economy cannot avoid a severe contraction that has already started and the policy response will have only a limited and delayed effect that will be felt more in 2010 than 2009," he said.

re: Congress forces mortgage modifications

David Schulze — Tue, 13 Jan 2009 04:02:33 GMT

I feel the money should have somehow been put directly in the hands of the people needing the help, not given to the banks. On the battle field we would not give a commander another 100 people to lose if the first ones he last were due to his mismanagement. We would fire him.

I think the banks have gotten way to greedy. Why do I have to pay $300,000 in interest charges on a loan of $100,000 while my bank continues to build a new bank on every street corner it can. Within a mile of my house there are six banks--with in two miles there are fifteen. Why is this?

At most over the life time of my loan, it should not cost them over $25,000 to service it. This sounds much fairer and would keep many more people in their homes. That would make my monthly payment $347 instead of $800.

Since Congress is using my tax money for this bailout, then I believe the banks should be forced to except my new deal and make it retroactive--which means the bank owes me back $42,000 in interest--they can take that and apply it to my loan which would mean I would owe them just about $50,000.

Seems simple enough to me--

By the way by our Wal-mart a restaurant chain built a brand new building. I guess the restaurant folded. Chase came in and tore down the new place and built its own building--this seems such a waste--

visit me at www.iraq-up-close-and-personal.com

re: Congress forces mortgage modifications

John Gaffney — Tue, 13 Jan 2009 03:05:08 GMT

When governments bail out lenders (or anyone for that matter), what do they do it with? Money, right? A Federal Reserve Note (your money) says "This Note is Legal Tender for All Debts, Public and Private". Well, just how does this work? Just where does this money come from?

For starters, it is ISSUED. In a "production-exchange" system such as ours, money is the medium. Ethically managed, it is a good medium. But it is easily corrupted. For example, one can cause money to make money in the absence of production. Some capitalists discovered this upon the founding of our Federal Reserve System. Since money is used to buy "stuff", this essentially means that someone can consume without producing themselves. Although rarely viewed as "Indigence", it stresses any production-exchange system just as an indigent person does. So here's an interesting question, no matter your party affiliation, have we not just become a system being run by indigents for indigents?

Don't misunderstand me, I love America. But having managed a great company with a superior philosophy of service and delivery, that was later acquired and devoured by a corporate giant with a philosophy of "move ALL manufacturing to low-cost manufacturing centers" (i.e. Malaysia), one discovers that placing blame becomes intensely difficult.

We are witnessing the greatest of money games. Last night on 60 Minutes, it was stated by an "expert" that Enron started the speculation bubble leading to record high gas prices that depleted our savings and retirement accounts. Some smart investors bought houses that sit vacant today, hoping that someone will rent them and help pay their real estate taxes. Some who are sitting on wads of paper money wondering just what these pieces of paper are going to be worth after Congress and the Courts rescue us.

Does no good to blame the Democrats or the Republicans, any more than it does to try and pay your taxes with chicken eggs. I'm afraid neither party has a majic wand. It's just back to you and I, restoring the trust that built our nation. It may also take growing some chickens in the yard, and a willingness to accept eggs as payment for services rendered. At least until everyone understands a little bit more about what money is and how it is best managed. Who knows, we may even find a friend in a foreign country, struggling to survive just as we are!

re: Congress forces mortgage modifications

Earl — Tue, 13 Jan 2009 00:01:22 GMT

Bankers have universally refused to participate in the government's programs to stimulate the economy and stem the foreclosure crisis. One wonders how their powerful lobby even obtained the "only" exception to bankruptcy law in the first place.

No other lenders have suffered the doom and gloom scenario you posit in your article. They make loans at decent interest rates without dire consequences. They market sets the interest rates, risk is already factored into the rates.

Foreclosure cost banks a lot of money as well. Can you show that they would recieve less from a modified loan than from a foreclosure sale? Can you truly prove that the risk would increase?

One wonders who is paying you to write such an irresponsible article. How deep are your ties to the banking industry?

Banks have failed to act and deserve to be regulated in this area.

re: Congress forces mortgage modifications

Irma — Mon, 12 Jan 2009 23:59:55 GMT

OH No - regulate an industry that has been allowed for years to make its own rules. And whose doorstep we can dump this economy on. Now that they can't sell mortgages as fast as they close - remember when each loan package held a mortgage assignment? Now, they have to go back to earning their money the old way - each payment that is made contains interest - you may not make all your money back right away - but you do get paid. How much do you get paid to foreclose on a property that sits on the market for a year or two - seems like that's just costing money. Not to mention the money poured into the financial market by Paulsen on behalf of the Bush Adminstration - does anyone know where it has gone and what it was used for?