Home loan forgiveness

[FactFinder]

page 1 of your typical mortgage agreement is whats called a HUD 1, its spells out costs, a few pages back is the breakdown of payment terms to deed, which when you use an Adjustable Rate Mortgage (ARM) is accompanied by the rate information, it tells you what you are paying NOW and what you will pay when your ARM expires, in dollars and cents....
I submit, if you cannot read that simple explanation, you should not be buying a home, period. Anything there after is just excuses.

Bingo. You know exactly what you are getting yourself in for.

Did they tell you that they don't own the note?
Did they tell you they sold it (numerous times) to investors as "derivatives"?

No they didn't. Because it wasn't in the Loan Paperwork was it?

How can you pay your mortgage to a person, company or bank that doesn't have the note? Isn't that fraud?

Yes it is and it makes that contract invalid.

Now which one of those 25 papers was it supposed to be in?

 

[syrenn]

Some are sophisticated and understand others not. Guess who got fleeced. A young couple out of college, naiive, idealistic, trusting. Yeah, I favor Wall Street hounds over those sons of bitches.

Don't give me that young couple crap. I was 23 when we took about our first loan. I knew what we could afford and pay for. We did not sign for what we would have wanted though.

Did they not have to pass basic math for that college education? I though the whole point of college was to make you less naive?

Somehow I think it was a different age that you & I grew up in than what I see today. The cold hard world was much more obvious then. Now it is all marketing hype about how we are all in it together. That is till the shit hits the fan.

No, its all about wanting everything and instant gratification is not fast enough. Its about wanting more then you can afford. There was a time that you saved and saved for a down payment and took out a fixed rate 30 year loan.

Nothing has changed. You take out a loan and pay for it. If you miss payments they foreclose on your mortgage and take back the house. If they did not put a down payment on the house... they have lost nothing. The payments were essentially the same as rent.

 

[syrenn]

page 1 of your typical mortgage agreement is whats called a HUD 1, its spells out costs, a few pages back is the breakdown of payment terms to deed, which when you use an Adjustable Rate Mortgage (ARM) is accompanied by the rate information, it tells you what you are paying NOW and what you will pay when your ARM expires, in dollars and cents....
I submit, if you cannot read that simple explanation, you should not be buying a home, period. Anything there after is just excuses.

Bingo. You know exactly what you are getting yourself in for.

Did they tell you that they don't own the note?
Did they tell you they sold it (numerous times) to investors as "derivatives"?

No they didn't. Because it wasn't in the Loan Paperwork was it?

How can you pay your mortgage to a person, company or bank that doesn't have the note? Isn't that fraud?

Yes it is and it makes that contract invalid.

I knew they sold the mortgages. It had nothing to do with my payments.

 

[Dr.Traveler]

They got themselves into the mess, they need to get themselves out of it, Tax payers should not be on the hook for someone elses bad decisions.

I agree. But the problem is the sheer number of folks in the hole has destroyed the financial system and put the rest of us that bought houses we could afford into the hole.

I'm not crazy about loan forgiveness or bailouts, but I've yet to see an alternative that didn't basically mean "Let the World Burn!".

 

[Dr.Traveler]

We have the freedom to succeed that goes hand in hand with the freedom to fail

When the neighbor's house burns down because he was smoking in bed, we as a community still make sure that the means exist to put out the fire. And that's a reasonable response as his fire has the potential to destroy other folks homes through no fault of their own.

That's what's happening here. The folks defaulting are ruining it for literally everyone. We need to put out the fire. I absolutely hate bailing folks out. But I'd like to hear another way to put this fire out.

 

[LoneLaugher]

It doesn't matter, Doc. The nutters demand that "they" suffer.

 

[jillian]

There's an opinion in today's WSJ about a guy named Ed DeMarco. He's the acting head of the Federal Housing Finance Agency, an independent regulator of Fannie and Freddie. He's basically the cop that prevents bad policy decisions that taxpayers would have to pay for. F&F are already some 141 billion in the hole, so his job is to make sure the situation doesn't get appreciably worse.

Which brings us to the question of principle write downs, when lenders would reduce the mortgage principle amount for loans owned by F&F. IOW, a bailout, just in time for the 2012 election, another stimulus plan that bypasses Congress, imagine that.

Except Mr DeMarco won't play ball, he says the taxpayers loseout in the deal, which is true. He says principal forgiveness is not within his statuatory mandate, and Congress should be the ones to appropriate money to fund the idea if they wish.

Hard to argue with that, but of course the democrats are outraged. Bear in mind we've seen several housing relief programs in the lst few years, none of which have worked. And how fair is it to reduce somebody's mortgage but not somebody else's?

So, this all leads to the question: what do you think of the idea of lowering somebody's mortgage principle with the US taxpayers paying for it? I can see extending the mortgage period out to 40 or even 50 years, or requiring a lower loan interest. What's your opinion?

you're kind of mischaracterizing a little bit. absent a link to Acting Director DeMarco's editorial, I can't comment. however, there are already laws requiring that banks act in good faith to renegotiate the loans of ELIGIBLE borrowers. that is all this would require banks to do. It would cost the "taxpayers" far more to let tens of thousands of people, who could pay reasonable loans, get tossed from their houses.

in many of these instances, the banks can't even prove that they own the properties in question because of the bundling and sale of debt from bank to bank to bank... often ownership of the mortgage isn't even properly recorded.

now, on a purely fiscal level...the reason so many of these loans went into default (not all, but many) was because unscrupulous lenders gave people adjustable rate mortgages the banks knew they would be unable to afford, while assuring the borrowers they'd get re-fi'd before the ARM kicked in (usually about 5 years). so how much interest has the bank already gotten for the premises. often, that interest matched the price of the property by the end of the loan term.

like i said... i might be missing something b/c the editorial wasn't linked and frannie and freddie have some unique characteristics. but i'm not seeing a huge problem here.

what's the alternative? letting people be homeless and giving the lenders a huge windfall for their irresponsibility?

 

[jillian]

page 1 of your typical mortgage agreement is whats called a HUD 1, its spells out costs, a few pages back is the breakdown of payment terms to deed, which when you use an Adjustable Rate Mortgage (ARM) is accompanied by the rate information, it tells you what you are paying NOW and what you will pay when your ARM expires, in dollars and cents....

I submit, if you cannot read that simple explanation, you should not be buying a home, period. Anything there after is just excuses.

does your HUD1 tell you that your lender may not re-fi you like they said they would before the ARM kicks in?

nope.

does your HUD1 tell you that if your bank is irresponsible and bundles your debt with others you may or may not be able to figure out who owns your note?

nope.

does your HUD1 tell you that if the market crashes because of those irresponsible banks that your home won't be worth the price you're paying for it and you won't be able to re-fi or sell?

nope.

address those problems instead of blaming the people who got screwed.

on another note, a little trivia about your HUD1. the ONLY reason you have that is because a democratic senator named william proxmire got ticked off when his daughter closed on a home and couldn't explain the charges and didn't understand them. if corporations aren't forced to do things to protect consumers... they don't.

how horrible.... .nanny state-ism. right?

 

[editec]

Here's a thought.

All mortgages go back on the books of the originating banks that took them. Those banks pay back the bondholders that they screwed by selling them debt instruments with false risk assessments.

Then let those banks go down as the mortgages they write that they KNEW were bad go belly up.

All this system does is allow the Banksters to get away with the FRAUDS they committed.

They wrote those mortgages, let THEM go down.

Why should the taxpayers REWARD the Banksters?

 

[chanel]

Editec - not a bad idea. Obviously their are banks who are charlatans and others who have integrity. My bank has strict lending standards and never got into the sub-prime nonsense. But of course they have been criticized in the past.

Banks do not want to be in the real estate business. Restructuring of loans has been around for a long time. They do not want people's homes; they want their money back. But even before the meltdown, we all knew people who bought homes they could not afford. I can't tell you how many I know who live paycheck to paycheck. And yes, they are "decent, hardworking people". But that does not immune them from suffering the consequences of risky decisions. Their neighbors should not have to pay their bills now.

All investments have risk. And a home is no different.

How about the people who have lost half their 401K's or are paying off outrageous hospital bills? Should they be reimbursed as well? Where does it stop?

We have a moral duty to provide "welfare" to our most vulnerable citizens: poor children, the elderly and the disabled. Not to able bodied people who live beyond their means.

 

[jillian]

Here's a thought.

All mortgages go back on the books of the originating banks that took them. Those banks pay back the bondholders that they screwed by selling them debt instruments with false risk assessments.

Then let those banks go down as the mortgages they write that they KNEW were bad go belly up.

All this system does is allow the Banksters to get away with the FRAUDS they committed.

They wrote those mortgages, let THEM go down.

Why should the taxpayers REWARD the Banksters?

i have a better idea. prosecute the people who gamed the system. that's what we do with con men.

then let the government take over the banks they bail out so the debt isn't socialized while the profits are capitalized.

 

[chanel]

I agree Jillian, but is "gaming the system" a crime? It seems to me that this "easy money" was perfectly legal. "Home Ownership for All" was promoted by both Clinton and Bush.

 

[editec]

Editec - not a bad idea. Obviously their are banks who are charlatans and others who have integrity. My bank has strict lending standards and never got into the sub-prime nonsense. But of course they have been criticized in the past.

Good point.

IN FACT most banks are as SCREWED by the INSIDER banks as WE ARE

Banks do not want to be in the real estate business. Restructuring of loans has been around for a long time. They do not want people's homes; they want their money back. But even before the meltdown, we all knew people who bought homes they could not afford. I can't tell you how many I know who live paycheck to paycheck. And yes, they are "decent, hardworking people". But that does not immune them from suffering the consequences of risky decisions. Their neighbors should not have to pay their bills now.

All investments have risk. And a home is no different.

How about the people who have lost half their 401K's or are paying off outrageous hospital bills? Should they be reimbursed as well? Where does it stop?

We have a moral duty to provide "welfare" to our most vulnerable citizens: poor children, the elderly and the disabled. Not to able bodied people who live beyond their means.

Good points.


You'll note that I did NOT propose that anyone EXCEPT the BONDHOLDERS be reimbursed?


And the only reason I think they deserve consideration is because they were LIED TO by the Bansters.


The reason so many BANKS are terrified is because they are holding those DEBT INSTRUMENTS (read bonds) that are essantially worthless.

And they bought this dubious assets from whom?

From the Insiders who lied to them about the inherent risk of those bonds.

 

[jillian]

I agree Jillian, but is "gaming the system" a crime? It seems to me that this "easy money" was perfectly legal. "Home Ownership for All" was promoted by both Clinton and Bush.

Yes. Gaming the system was illegal and a fraud. They knew they were bundling the bad debt in unidentifiable ways so the investors would lose money. They knew this. That is why the attorneys general are doing investigations.

It wasn't tone home ownership for all that was the problem.

 

[Trajan]

There's an opinion in today's WSJ about a guy named Ed DeMarco. He's the acting head of the Federal Housing Finance Agency, an independent regulator of Fannie and Freddie. He's basically the cop that prevents bad policy decisions that taxpayers would have to pay for. F&F are already some 141 billion in the hole, so his job is to make sure the situation doesn't get appreciably worse.

Which brings us to the question of principle write downs, when lenders would reduce the mortgage principle amount for loans owned by F&F. IOW, a bailout, just in time for the 2012 election, another stimulus plan that bypasses Congress, imagine that.

Except Mr DeMarco won't play ball, he says the taxpayers loseout in the deal, which is true. He says principal forgiveness is not within his statuatory mandate, and Congress should be the ones to appropriate money to fund the idea if they wish.

Hard to argue with that, but of course the democrats are outraged. Bear in mind we've seen several housing relief programs in the lst few years, none of which have worked. And how fair is it to reduce somebody's mortgage but not somebody else's?

So, this all leads to the question: what do you think of the idea of lowering somebody's mortgage principle with the US taxpayers paying for it? I can see extending the mortgage period out to 40 or even 50 years, or requiring a lower loan interest. What's your opinion?

page 1 of your typical mortgage agreement is whats called a HUD 1, its spells out costs, a few pages back is the breakdown of payment terms to deed, which when you use an Adjustable Rate Mortgage (ARM) is accompanied by the rate information, it tells you what you are paying NOW and what you will pay when your ARM expires, in dollars and cents....

I submit, if you cannot read that simple explanation, you should not be buying a home, period. Anything there after is just excuses.

Now let's look at the real world. A young couple getting slammed with 20 offers a week in their studio apartment. "Pre Qualified" You can move into your 2 bedroom dream home tomorrow.! Easy financing. No down payment. No Worries. Trust Us. Keep your eyes on the prize. That paperwork crap is just formality.

and there ya go, see, thats just an excuse. if whomever, thinks purchasing a home is like buying a vacuum cleaner or used car, well, thats not reality, thats a disconnect from reality.

How should we correct for that?

I got it, every deal someone made that they think later they got hosed on or did becasue they could not figure out that, they can pay $1800 a month now and cannot pay $3000 3 years from now, presto, lets have the taxpayer pick up the tab, lower their payment, rework their payment, becasue they could not do simple household finance math .......

lets do it for Cars too, trendy yuppie buys the hottest sexiest car out there, no money down, 1% interest and a rebate!!!!!

He she signs a note for a $500 a month payment, in a year they realize what the hell, I cannot afford this, all my money goes into my car, I got nothing left let me sell it ( he naturally takes a bath on it), well? Should we bail them out too?

 

[Trajan]

I agree Jillian, but is "gaming the system" a crime? It seems to me that this "easy money" was perfectly legal. "Home Ownership for All" was promoted by both Clinton and Bush.

Yes. Gaming the system was illegal and a fraud. They knew they were bundling the bad debt in unidentifiable ways so the investors would lose money. They knew this. That is why the attorneys general are doing investigations.

It wasn't tone home ownership for all that was the problem.

It wasn't tone home ownership for all that was the problem.

actually yes, that was the root cause of problem, not everyone can own a home and telling people you'll lower standards to get them in the door is just the how, not the why, the why is the philosophy that if someone cannot afford or qualify they should get one anyway......

 

[whitehall]

When are they going to forgive my car loan?

 

[Trajan]

page 1 of your typical mortgage agreement is whats called a HUD 1, its spells out costs, a few pages back is the breakdown of payment terms to deed, which when you use an Adjustable Rate Mortgage (ARM) is accompanied by the rate information, it tells you what you are paying NOW and what you will pay when your ARM expires, in dollars and cents....
I submit, if you cannot read that simple explanation, you should not be buying a home, period. Anything there after is just excuses.

Bingo. You know exactly what you are getting yourself in for.

Did they tell you that they don't own the note?
Did they tell you they sold it (numerous times) to investors as "derivatives"?

No they didn't. Because it wasn't in the Loan Paperwork was it?

How can you pay your mortgage to a person, company or bank that doesn't have the note? Isn't that fraud?

Yes it is and it makes that contract invalid.

IF they are NOT paying what difference does it make?

so it invalid, ok, so? they are also holding and occupying an asset they are not paying for, and?

 

[The T]

I agree Jillian, but is "gaming the system" a crime? It seems to me that this "easy money" was perfectly legal. "Home Ownership for All" was promoted by both Clinton and Bush.

Yes. Gaming the system was illegal and a fraud. They knew they were bundling the bad debt in unidentifiable ways so the investors would lose money. They knew this. That is why the attorneys general are doing investigations.

It wasn't tone home ownership for all that was the problem.

It wasn't tone home ownership for all that was the problem.

actually yes, that was the root cause of problem, not everyone can own a home and telling people you'll lower standards to get them in the door is just the how, not the why, the why is the philosophy that if someone cannot afford or qualify they should get one anyway......

Indeed. Ensuring equal outcomes is the problem and has shown to be unsustainable.

 

[Wiseacre]

Yes. Gaming the system was illegal and a fraud. They knew they were bundling the bad debt in unidentifiable ways so the investors would lose money. They knew this. That is why the attorneys general are doing investigations.

It wasn't tone home ownership for all that was the problem.

It wasn't tone home ownership for all that was the problem.

actually yes, that was the root cause of problem, not everyone can own a home and telling people you'll lower standards to get them in the door is just the how, not the why, the why is the philosophy that if someone cannot afford or qualify they should get one anyway......

Indeed. Ensuring equal outcomes is the problem and has shown to be unsustainable.

Ensuring equal outcomes = buying votes with taxpayer money.