DUH!!..69% Say Those Struggling With Mortgage Should Sell, Buy Cheaper Home

[syrenn]

No, because your declining stock portfolio doesn't affect me. But you foreclosing on your home does.

I don't understand something . . . isn't it in everyone's best interest (and that includes the bank) to keep these folks in their homes? I don't mean the ones who over bought or took out a second mortgage for a boat or used their homes as an atm . . . I mean the ones that Katie is talking about. Ones who did buy within their means, who did do it all by the book, who did prepare for a rainy day but due to the massive crash are now struggling and on the brink of foreclosure? Isn't it better for the banks to rewrite the terms of the loan? So they don't get their money back in 30 years, they get it back in 40. Isn't that better than not getting it back at all?

I agree... its a bad deal all around and very sad.

I have no idea if it would work... but i would think...something like trading down would be a good solution.

No, you cant afford the mortgage on the home you are in.... but you CAN afford this home that is also going under kind of thing....


Other then that.... When i signed my loans i knew that if i defaulted i was out the house. It made no difference WHY i would not be able to pay, but if i could not i did not expect to be allowed to keep the house AND not pay the loan i signed. Mortages are a gamble... sometimes you win and sometimes you lose. The banks are in it to make money.

If these were isolated incidents then I'd agree, those people should just foreclose and get on with their life. It's bigger than that and fixing it - er, helping it get fixed - is in everyone's best interest.

If the banks restructured the loans and that included lower monthly payments so folks could stay in their homes, not go into foreclosure, everyone would benefit from that. At least that's how it seems to me.

I agree.... just so long as the lower monthly payment does not change the amount of the loan.

BUT.... if you can't even make the lower monthly rate... that's it. They simply can not afford the house.

 

[eflatminor]

If my neighbors go into foreclosure how does that affect me positively?

Ask the neighbor that is renting trying to save enough money to buy a home. Downward prices help him tremendously. There was a time when a computer or a television cost a fortune. It's a GOOD thing that prices decreased. While YOU might suffer from declining home values, others will prosper. That's the way markets work.

 

[eflatminor]

This has all been most enlightening but duty calls. Thanks for the insight, everyone.

 

[Zoom-boing]

If my neighbors go into foreclosure how does that affect me positively?

Ask the neighbor that is renting trying to save enough money to buy a home. Downward prices help him tremendously. There was a time when a computer or a television cost a fortune. It's a GOOD thing that prices decreased. While YOU might suffer from declining home values, others will prosper. That's the way markets work.

How does my neighbor being in foreclosure affect me positively? It doesn't, it ends up decreasing the value of my home even more.

It's certainly a buyers market now (even without who knows how many more houses to choose from if many more foreclosures take place) and yet . . . I'm not seeing things moving.

 

[The Rabbi]

If my neighbors go into foreclosure how does that affect me positively?

Ask the neighbor that is renting trying to save enough money to buy a home. Downward prices help him tremendously. There was a time when a computer or a television cost a fortune. It's a GOOD thing that prices decreased. While YOU might suffer from declining home values, others will prosper. That's the way markets work.

How does my neighbor being in foreclosure affect me positively? It doesn't, it ends up decreasing the value of my home even more.

It's certainly a buyers market now (even without who knows how many more houses to choose from if many more foreclosures take place) and yet . . . I'm not seeing things moving.

Every movement in price is a benefit to one party and a liability to another. Whether that price is up or down. There is no reason artificially to keep prices high.
In the 90s when the S&L crisis hit we had a similar housing market for similar reasons. The gov't pushed the RTC and they sold off bank held properties within about 24 months. After that the market recovered. Now we are at 3 years and counting. One approach was a success, one a failure.

 

[Katiegrrl0]

You are the one who seems focused on bailouts for homeowners. This is no bail out. It is a relief for the entire system.

You say tomato...

In fact the lender will make more in terms of interest.

Then there ought to be no need for governmental interference in the contract between lender and borrower. If you're correct, the lender will happily modify the loan. Of course, you could have no frickin' idea what you're talking about, but let's not even go there.

You seem to be blind to helping anyone...

Helping is someone one does of their own volition. You're advocating charity through force. Big difference.

...who through no fault of their own are in a pinch

So if my stock portfolio declines in value, through no fault of my own, will you write me a check?

1. How is it a bailout? If you think it is you explain how extending the loans life at added interest is a bailout to the homeowner. I see this as an assist to prevent default.
2. In what post did I mention government? Lenders should be jumping at the chance to renegotiate these loans. Under the terms I have stated it would work. The lender would have a certain amount of upfront expense in doing this but that cost would be added to the loan. Both parties would have to be agreeable to the terms.
3. This might well be a plan designed by government and submitted to the lenders. It would be up to the lender to do this or not. If some lenders agree and others didn't the loans could be sold to those that would work such a program. No business should be force.
4. I don't think I ever mentioned stock. That is far more risk than home purchase. You my friend would be on your own. This is a plan for home ownership. It prevents default and it keeps the people in their home. If you lose your home because of a bad stock investment this would not be for you. I am speaking of someone who due to a job loss in this difficult time will lose their home.
That's why this is no bailout.

 

[Katiegrrl0]

And I've found that most who are quick with someone else's money are typically dooshbags who wouldn't contribute a dime of their own to any charity.

Who is being quick with someone else's money? Nothing is given away. The terms of the loan are renegotiated to save the loan and to repay it without everyone losing. This wins on both sides. In a couple of years at most times will get better and these mid road loans will be paid off and the bank makes more money so who are you kidding? No one is asking anyone to forfeit anything or give anything away.

Do you understand the concept of "time value of money"?

As I said, if banks and borrowers come to a private agreement, fine. But imposing one from above is a violation of the rule of law. Not that that every bothered the Obama Administraiton, the most lawless in history, before.

I have never mentioned imposing anything on anyone. The government could set up a structure that would work and present it to the lenders. If they wanted to participate without the headache of design they could. If not, it would the decision of the business.

 

[Katiegrrl0]

The only banks being told they HAVE to do HAMP modifications are those which took government bail outs. It was a condition of their obtaining those loans.

Banks that didn't take money aren't forced to do good faith modifications.

That's true they are not forced but it would be wise business practice to keep someone in their home. It would be good for the economy and the banks bottom line.

Do you run a bank or sit on their board?

I do not but I do know enough about it that this could work. It may be time consuming and an ordeal to set up but worth it in the end. If the government took the time to work out the details and present such a package lenders might well use the vehicle. That is the only government involvement. The lenders would be on their own thereafter.

 

[Katiegrrl0]

Banks do that kind of thing all the time. I have no issue if they willingly enter into modification agreements with borrowers.
I have a big problem when the gov't tells them this is what they must do. If so, what's the point of any contract if the gov't can simply abrogate it when it becomes politically feasible? That would destroy any notion of the rule of law. No one in his right mind would give a mortgage after that.
About 80% of the people who have gone through one of the Obama Admnistrations' limitless programs find themselves in foreclosure anyway 18 months later. Why prolong the agony? Trhis is why the housing market is still the weakest sector in the economy.

The housing market is weak because there are many homes available and more foreclosures on the horizon. If those are eliminated though creative financing that is reevaluated from time to time by the lender you have stopped the bleeding. This strengthens the housing market. Those that got themselves in the jam or the lenders that screwed up that's their problem. But for the many who have tried and because of circumstances could use help they get help.

We have had 3 years or more of "helping out homeowners" and the housing market is the weakest sector in the economy. Housing needs less help from the govt.
I do not distinguish between someone who was making bonuses in Vegas and bought a house he could never afford and someone who worked hard and saved for a downpayment. There is no moral issue here, that some people deserve bailouts and some don't. No one does. Not with taxpayer money.

If homeowners were helped in a realistic way the problem would not still be going on. A plain such as this might take some homeowners five years to get fully back on track. The family that I used for an example lost a large income and it has been replaced temporarily with a small income. Each month they lost more and more. mid last year it became extreme. It will take them time to dig out of the hole but they can.
This would stop foreclosures and keep property in the hands of the original owner. It eases the problem considerably. But it will takes years to right the ship. As it is it may never get right on it's own.

 

[Katiegrrl0]

No, because your declining stock portfolio doesn't affect me. But you foreclosing on your home does.

I don't understand something . . . isn't it in everyone's best interest (and that includes the bank) to keep these folks in their homes? I don't mean the ones who over bought or took out a second mortgage for a boat or used their homes as an atm . . . I mean the ones that Katie is talking about. Ones who did buy within their means, who did do it all by the book, who did prepare for a rainy day but due to the massive crash are now struggling and on the brink of foreclosure? Isn't it better for the banks to rewrite the terms of the loan? So they don't get their money back in 30 years, they get it back in 40. Isn't that better than not getting it back at all?

I agree... its a bad deal all around and very sad.

I have no idea if it would work... but i would think...something like trading down would be a good solution.

No, you cant afford the mortgage on the home you are in.... but you CAN afford this home that is also going under kind of thing....


Other then that.... When i signed my loans i knew that if i defaulted i was out the house. It made no difference WHY i would not be able to pay, but if i could not i did not expect to be allowed to keep the house AND not pay the loan i signed. Mortages are a gamble... sometimes you win and sometimes you lose. The banks are in it to make money.

Trading down would be a great solution but when that far in debt no one will make a loan. If you loss nearly everything there is no place to start. If you are able to stay in place at a lower rate which will increase as your income level improves it solves the problem with no governmental interference. It is a business decision.

 

[Zander]

The banking industry is mostly to blame for the boom and consequent drop in home values.

Big fucking deal. Did they force you or anyone else to buy a house? You are responsible for your own life and decisions. It's a shame that so many people refuse to accept personal responsibility for their lives.

Why aren't loan agents responsible for their decisions?

Who should know more about home mortgages - loan agents, or ordinary joe?

When you sign a document- you owe it to yourself to understand what it says. It always comes back to one concept that leftists cannot or will not grasp = PERSONAL RESPONSIBILITY. It's your life- own it, all of it......even the bad shit.

 

[Katiegrrl0]

And I've found that most who are quick with someone else's money are typically dooshbags who wouldn't contribute a dime of their own to any charity.

Who is being quick with someone else's money? Nothing is given away. The terms of the loan are renegotiated to save the loan and to repay it without everyone losing. This wins on both sides. In a couple of years at most times will get better and these mid road loans will be paid off and the bank makes more money so who are you kidding? No one is asking anyone to forfeit anything or give anything away.

So long as the full price of the loan is paid... fine...i don't care how they renegotiate it...and they SHOULD. A lower interest rate or a fixed loan.... great. But asking the bank to eat the cost of the decrease in value of a home is crazy. Asking them to care that your personal finical circumstances has changed is crazy.

In the end the full loan is paid plus the added fees and extra interest. This is not a bailout or a giveaway. It serves as a help. I see no reason a business should lose money on this idea. They would hold the loan longer at a lower payment rate. When the owner recovered they would be happy to get the loan back to normal. They would not have to pay the long term interest. It would also be good for the lender in terms of business and public relations. Imagine an ad where person X says such and such helped me save my home. They were there when I needed a hand. They will be there for you as well. It makes a catchy ad.

 

[Katiegrrl0]

yes we have been over this before...... i am about personal responsibilities and paying your bills.

The people I am suggesting that could use a program such as this are those that are about personal responsibility and had circumstances back them into a corner.

Change in life circumstances makes no difference to a loan. Taking out any loan is a gamble.

In the economic crisis the US just went though it quadrupled the risk, When housing and jobs went down at once for many there are helps that can be done. You seem to still think I am talking about a handout here. You have read my posts and it is a help.

 

[syrenn]

No, because your declining stock portfolio doesn't affect me. But you foreclosing on your home does.

I don't understand something . . . isn't it in everyone's best interest (and that includes the bank) to keep these folks in their homes? I don't mean the ones who over bought or took out a second mortgage for a boat or used their homes as an atm . . . I mean the ones that Katie is talking about. Ones who did buy within their means, who did do it all by the book, who did prepare for a rainy day but due to the massive crash are now struggling and on the brink of foreclosure? Isn't it better for the banks to rewrite the terms of the loan? So they don't get their money back in 30 years, they get it back in 40. Isn't that better than not getting it back at all?

I agree... its a bad deal all around and very sad.

I have no idea if it would work... but i would think...something like trading down would be a good solution.

No, you cant afford the mortgage on the home you are in.... but you CAN afford this home that is also going under kind of thing....


Other then that.... When i signed my loans i knew that if i defaulted i was out the house. It made no difference WHY i would not be able to pay, but if i could not i did not expect to be allowed to keep the house AND not pay the loan i signed. Mortages are a gamble... sometimes you win and sometimes you lose. The banks are in it to make money.

Trading down would be a great solution but when that far in debt no one will make a loan. If you loss nearly everything there is no place to start. If you are able to stay in place at a lower rate which will increase as your income level improves it solves the problem with no governmental interference. It is a business decision.

Sorry... keeping the house is not an option in my opinion. That is what i mean by trading down. Whoever it is has to move to a home of less value, less desirable location... less bedrooms....whatever.... and one that they CAN afford to pay for. No hassles so long as they can make the mortgage payment of a lower interest rate or amount.

I agree about staying in a home that you can make lower monthly payments on if the interest rate is restructured. A restructure should not change the amount of the loan. If even at a lower interest rate that person cannot make the payment... the only option is to foreclose. Sorry, they don't get to keep a house they are not making payments on.

I know that is not the option that the homeowner wants..... its not the option that the bank wants. But it IS the gamble and risk they took and lost.

 

[OohPooPahDoo]

Big fucking deal. Did they force you or anyone else to buy a house? You are responsible for your own life and decisions. It's a shame that so many people refuse to accept personal responsibility for their lives.

Why aren't loan agents responsible for their decisions?

Who should know more about home mortgages - loan agents, or ordinary joe?

When you sign a document- you owe it to yourself to understand what it says.

Everyone who has signed a home mortgage in recent decades and does not hold a law degree falls into the category of not understanding 100% of everything that is in the mortgage they signed, and if they claim they do, they are liars.

It always comes back to one concept that leftists cannot or will not grasp = PERSONAL RESPONSIBILITY. It's your life- own it, all of it......even the bad shit.

Why does personal responsibility not apply to loan agents? How come it only applies to those with the least knowledge of the process?

 

[syrenn]

Who is being quick with someone else's money? Nothing is given away. The terms of the loan are renegotiated to save the loan and to repay it without everyone losing. This wins on both sides. In a couple of years at most times will get better and these mid road loans will be paid off and the bank makes more money so who are you kidding? No one is asking anyone to forfeit anything or give anything away.

So long as the full price of the loan is paid... fine...i don't care how they renegotiate it...and they SHOULD. A lower interest rate or a fixed loan.... great. But asking the bank to eat the cost of the decrease in value of a home is crazy. Asking them to care that your personal finical circumstances has changed is crazy.

In the end the full loan is paid plus the added fees and extra interest. This is not a bailout or a giveaway. It serves as a help. I see no reason a business should lose money on this idea. They would hold the loan longer at a lower payment rate. When the owner recovered they would be happy to get the loan back to normal. They would not have to pay the long term interest. It would also be good for the lender in terms of business and public relations. Imagine an ad where person X says such and such helped me save my home. They were there when I needed a hand. They will be there for you as well. It makes a catchy ad.

lets be realistic here.... age is going to be a factor in all of this.

A 30 year loan is long enough. Do you really think someone in their 50's is still going to be earning enough to pay for a mortgage in their 80's? Do you think a person in their 40's with a 40 year loan is gong to still have a well paying job in their 80's or will they be on SS and just making it by on that?


I agree it would be a catchy add if they could save people their homes..... IF they can afford to make the payments.

 

[saveliberty]

Who is being quick with someone else's money? Nothing is given away. The terms of the loan are renegotiated to save the loan and to repay it without everyone losing. This wins on both sides. In a couple of years at most times will get better and these mid road loans will be paid off and the bank makes more money so who are you kidding? No one is asking anyone to forfeit anything or give anything away.

So long as the full price of the loan is paid... fine...i don't care how they renegotiate it...and they SHOULD. A lower interest rate or a fixed loan.... great. But asking the bank to eat the cost of the decrease in value of a home is crazy. Asking them to care that your personal finical circumstances has changed is crazy.

In the end the full loan is paid plus the added fees and extra interest. This is not a bailout or a giveaway. It serves as a help. I see no reason a business should lose money on this idea. They would hold the loan longer at a lower payment rate. When the owner recovered they would be happy to get the loan back to normal. They would not have to pay the long term interest. It would also be good for the lender in terms of business and public relations. Imagine an ad where person X says such and such helped me save my home. They were there when I needed a hand. They will be there for you as well. It makes a catchy ad.

Banks do allow interest only payments on loans they hold. Most of these loans are held by investors. Withholding payments from them may create a situation where they can't pay their bills. Of course defaults are a problem too. Basically the problem here is too much distance between the lender and borrower.

 

[saveliberty]

So long as the full price of the loan is paid... fine...i don't care how they renegotiate it...and they SHOULD. A lower interest rate or a fixed loan.... great. But asking the bank to eat the cost of the decrease in value of a home is crazy. Asking them to care that your personal finical circumstances has changed is crazy.

In the end the full loan is paid plus the added fees and extra interest. This is not a bailout or a giveaway. It serves as a help. I see no reason a business should lose money on this idea. They would hold the loan longer at a lower payment rate. When the owner recovered they would be happy to get the loan back to normal. They would not have to pay the long term interest. It would also be good for the lender in terms of business and public relations. Imagine an ad where person X says such and such helped me save my home. They were there when I needed a hand. They will be there for you as well. It makes a catchy ad.

lets be realistic here.... age is going to be a factor in all of this.

A 30 year loan is long enough. Do you really think someone in their 50's is still going to be earning enough to pay for a mortgage in their 80's? Do you think a person in their 40's with a 40 year loan is gong to still have a well paying job in their 80's or will they be on SS and just making it by on that?


I agree it would be a catchy add if they could save people their homes..... IF they can afford to make the payments.

That and a mobile society means many people have to sell their homes long before the mortgage is paid off in fuul.

 

[saveliberty]

Why does personal responsibility not apply to loan agents? How come it only applies to those with the least knowledge of the process?

The loan officer's responsibility ends with meeting the legal requirements of completing the loan and truthfulness in disclosing the contract terms and conditions.

 

[syrenn]

The people I am suggesting that could use a program such as this are those that are about personal responsibility and had circumstances back them into a corner.

Change in life circumstances makes no difference to a loan. Taking out any loan is a gamble.

In the economic crisis the US just went though it quadrupled the risk, When housing and jobs went down at once for many there are helps that can be done. You seem to still think I am talking about a handout here. You have read my posts and it is a help.

I am sad for the people in this situation. I understand the economic situation. I understand people though no fault of their own, their life situation changed. It sucks...

It does no change the fact they signed for a loan...and are defaulting on it. Its the same as if you default on a car loan.... the car gets repossessed.

Great, some people will be able to refinance at a lower interest. Good for them, I hope it helps them keep their homes. For the ones who cant even pay for that i am very sorry but they will just have to deal with trying to sell their home, buy or rent something that they can afford.. or lose everything in a foreclose.


It would help if you would say if this is you we are talking about. At times you allude to it.