Mortgage investors may sue on modified loans

[DiveCon]

I don't understand the motivation here.

These houses are in danger of going into foreclosure. If that happens don't these investors get hosed?

no, they get the value of what was forclosed on

Which is considerably less than if the mortgages were just honored to the end, right?

depends on what happens to the market


either way, it is breaking a contract

 

[Article 15]

no, they get the value of what was forclosed on

Which is considerably less than if the mortgages were just honored to the end, right?

depends on what happens to the market

So it's possible for investors to make more money if the house gets foreclosed?

How so? Its seems pretty remote to me.

either way, it is breaking a contract

Forcing the banks to rewrite the loans?

 

[DiveCon]

Which is considerably less than if the mortgages were just honored to the end, right?

depends on what happens to the market

So it's possible for investors to make more money if the house gets foreclosed?

How so? Its seems pretty remote to me.

either way, it is breaking a contract

Forcing the banks to rewrite the loans?

forcing, yes


have fun trying to get people to invest in a market where the details of a contract can be changed without your participation
you'll see the mortgage market dry up totally at that point

 

[Article 15]

depends on what happens to the market

So it's possible for investors to make more money if the house gets foreclosed?

How so? Its seems pretty remote to me.

either way, it is breaking a contract

Forcing the banks to rewrite the loans?

forcing, yes


have fun trying to get people to invest in a market where the details of a contract can be changed without your participation
you'll see the mortgage market dry up totally at that point

Does something like that already happen when someone voluntarily refinances their house?

 

[DiveCon]

So it's possible for investors to make more money if the house gets foreclosed?

How so? Its seems pretty remote to me.



Forcing the banks to rewrite the loans?

forcing, yes



have fun trying to get people to invest in a market where the details of a contract can be changed without your participation
you'll see the mortgage market dry up totally at that point

Does something like that already happen when someone voluntarily refinances their house?

and that is volentary, correct?
or they take out a new loan after paying off the old

 

[Article 15]

forcing, yes



have fun trying to get people to invest in a market where the details of a contract can be changed without your participation
you'll see the mortgage market dry up totally at that point

Does something like that already happen when someone voluntarily refinances their house?

and that is volentary, correct?
or they take out a new loan after paying off the old

Just a simple voluntary refinancing to a lower rate.

What say does the investor who holds the mortgage based securities have in that?

 

[DiveCon]

Does something like that already happen when someone voluntarily refinances their house?

and that is volentary, correct?
or they take out a new loan after paying off the old

Just a simple voluntary refinancing to a lower rate.

What say does the investor who holds the mortgage based securities have in that?

wouldnt it effect the profit?

 

[Article 15]

and that is volentary, correct?
or they take out a new loan after paying off the old

Just a simple voluntary refinancing to a lower rate.

What say does the investor who holds the mortgage based securities have in that?

wouldnt it effect the profit?

I would think so, you?

 

[DiveCon]

Just a simple voluntary refinancing to a lower rate.

What say does the investor who holds the mortgage based securities have in that?

wouldnt it effect the profit?

I would think so, you?

then i think the people in the story have a point
no?

 

[toomuchtime_]

Does something like that already happen when someone voluntarily refinances their house?

and that is volentary, correct?
or they take out a new loan after paying off the old

Just a simple voluntary refinancing to a lower rate.

What say does the investor who holds the mortgage based securities have in that?

The bank or mortgage company that holds the mortgage has a contract with the purchaser of the debt backed security. If the bank or mortgage company reduces the interest rate to get the payment under 31% of the person's income, that will reduce the value of the debt backed security that mortgage supports, and under ordinary circumstances that would constitute breach of contract, and if the bank or mortgage company modified the mortgage just to get the cash fee the government is offering, that would increase their liability. That's why the House is considering and will probably pass legislation preventing lawsuits by the investors who will lose value in such cases.

The larger issue here is that Geithner's Financial Stability Plan hinges of persuading investors to buy just this type of security that some believe is being undermined by Obama's housing bill. This is the second time in a week that Geithner and Obama didn't seem to know what the other was doing.

 

[Article 15]

wouldnt it effect the profit?

I would think so, you?

then i think the people in the story have a point
no?

Yes, I think they do have a point. But they aren't making many friends in the process. Being "right" doesn't always make you right. This will help people keep their homes and investors will still get paid. Stopping this to make a few extra bucks doesn't exactly make these investors look good.

 

[toomuchtime_]

I would think so, you?

then i think the people in the story have a point
no?

Yes, I think they do have a point. But they aren't making many friends in the process. Being "right" doesn't always make you right. This will help people keep their homes and investors will still get paid. Stopping this to make a few extra bucks doesn't exactly make these investors look good.

No one is complaining about modifying the mortgages of those who are in default or in imminent danger of going into default. Obviously, modifying that mortgage will benefit everyone, but Obama's plan will pay mortgage servicers to modify the mortgages of anyone whose monthly payment is more than 31% of their income even if they are paying on time and are in no imminent danger of default. The cases the investors are threatening to sue about have nothing to do with keeping people in their houses.

And this is not an oversight. In the FAQ sheet Treasury put out they specifically advise people to apply for mortgage modification even if they are not in danger of default if their monthly payment is more than 31% of their income. This is what the investors are pissed off about.

 

[DiveCon]

I would think so, you?

then i think the people in the story have a point
no?

Yes, I think they do have a point. But they aren't making many friends in the process. Being "right" doesn't always make you right. This will help people keep their homes and investors will still get paid. Stopping this to make a few extra bucks doesn't exactly make these investors look good.

making the "extra bucks" is what draws investors in the first place
what this is telling them is to invest in something else


trust me, this will be a bad deal for the financial industry

 

[DiveCon]

then i think the people in the story have a point
no?

Yes, I think they do have a point. But they aren't making many friends in the process. Being "right" doesn't always make you right. This will help people keep their homes and investors will still get paid. Stopping this to make a few extra bucks doesn't exactly make these investors look good.

No one is complaining about modifying the mortgages of those who are in default or in imminent danger of going into default. Obviously, modifying that mortgage will benefit everyone, but Obama's plan will pay mortgage servicers to modify the mortgages of anyone whose monthly payment is more than 31% of their income even if they are paying on time and are in no imminent danger of default. The cases the investors are threatening to sue about have nothing to do with keeping people in their houses.

And this is not an oversight. In the FAQ sheet Treasury put out they specifically advise people to apply for mortgage modification even if they are not in danger of default if their monthly payment is more than 31% of their income. This is what the investors are pissed off about.

right, which brings in a whole nother group of people
and makes the potential loss that much greater

 

[Care4all]

Yes, I think they do have a point. But they aren't making many friends in the process. Being "right" doesn't always make you right. This will help people keep their homes and investors will still get paid. Stopping this to make a few extra bucks doesn't exactly make these investors look good.

No one is complaining about modifying the mortgages of those who are in default or in imminent danger of going into default. Obviously, modifying that mortgage will benefit everyone, but Obama's plan will pay mortgage servicers to modify the mortgages of anyone whose monthly payment is more than 31% of their income even if they are paying on time and are in no imminent danger of default. The cases the investors are threatening to sue about have nothing to do with keeping people in their houses.

And this is not an oversight. In the FAQ sheet Treasury put out they specifically advise people to apply for mortgage modification even if they are not in danger of default if their monthly payment is more than 31% of their income. This is what the investors are pissed off about.

right, which brings in a whole nother group of people
and makes the potential loss that much greater

anyone owing a mortgage more than 31% of their income is considered high risk....no?

So, even if they are paying it now, foreclosure could be here a year from now with them....

so i am just guessing, but maybe this is good because it stops this continual drip drip drip of foreclosures and uncertainty of the housing market getting worse as the years continue on....?

to a degree i can see why investors would be upset...

but also to a degree i could see how the home owner PAYING his mortgage regularly, which was more than 31% of his income be pissed that he did not get the chance to refinance and the guy who DID NOT PAY his mortgage on time could....etc.

what a mess! a real mess!

 

[Article 15]

Ok, so the problem is the plan is too broad and lacks oversight therefor investors want to hold the right to sue if they suspect fraud, waste, or abuse.

I still like the idea but I think the gripe is legit.

 

[DiveCon]

No one is complaining about modifying the mortgages of those who are in default or in imminent danger of going into default. Obviously, modifying that mortgage will benefit everyone, but Obama's plan will pay mortgage servicers to modify the mortgages of anyone whose monthly payment is more than 31% of their income even if they are paying on time and are in no imminent danger of default. The cases the investors are threatening to sue about have nothing to do with keeping people in their houses.

And this is not an oversight. In the FAQ sheet Treasury put out they specifically advise people to apply for mortgage modification even if they are not in danger of default if their monthly payment is more than 31% of their income. This is what the investors are pissed off about.

right, which brings in a whole nother group of people
and makes the potential loss that much greater

anyone owing a mortgage more than 31% of their income is considered high risk....no?

So, even if they are paying it now, foreclosure could be here a year from now with them....

so i am just guessing, but maybe this is good because it stops this continual drip drip drip of foreclosures and uncertainty of the housing market getting worse as the years continue on....?

to a degree i can see why investors would be upset...

but also to a degree i could see how the home owner PAYING his mortgage regularly, which was more than 31% of his income be pissed that he did not get the chance to refinance and the guy who DID NOT PAY his mortgage on time could....etc.

what a mess! a real mess!

yes, too bad congress passed laws forcing them to MAKE those high risk loans

 

[Care4all]

right, which brings in a whole nother group of people
and makes the potential loss that much greater

anyone owing a mortgage more than 31% of their income is considered high risk....no?

So, even if they are paying it now, foreclosure could be here a year from now with them....

so i am just guessing, but maybe this is good because it stops this continual drip drip drip of foreclosures and uncertainty of the housing market getting worse as the years continue on....?

to a degree i can see why investors would be upset...

but also to a degree i could see how the home owner PAYING his mortgage regularly, which was more than 31% of his income be pissed that he did not get the chance to refinance and the guy who DID NOT PAY his mortgage on time could....etc.

what a mess! a real mess!

yes, too bad congress passed laws forcing them to MAKE those high risk loans

i differ with you dive con on this....

first...they didn't FORCE anyone to make those loans as you put it.....

second...out of our entire mortgage crisis with subprime mortgages issued.....ONLY 6% were made to those in areas covered by CRA, the community reinvestment act....i repeat, only 6%....

94% OF THESE SUBPRIME loans that have brought us to our knees, were made to people not involved with fannie/freddie and the congress's/president's initiative to put more people with lesser means in to homes.

care

 

[DiveCon]

anyone owing a mortgage more than 31% of their income is considered high risk....no?

So, even if they are paying it now, foreclosure could be here a year from now with them....

so i am just guessing, but maybe this is good because it stops this continual drip drip drip of foreclosures and uncertainty of the housing market getting worse as the years continue on....?

to a degree i can see why investors would be upset...

but also to a degree i could see how the home owner PAYING his mortgage regularly, which was more than 31% of his income be pissed that he did not get the chance to refinance and the guy who DID NOT PAY his mortgage on time could....etc.

what a mess! a real mess!

yes, too bad congress passed laws forcing them to MAKE those high risk loans

i differ with you dive con on this....

first...they didn't FORCE anyone to make those loans as you put it.....

second...out of our entire mortgage crisis with subprime mortgages issued.....ONLY 6% were made to those in areas covered by CRA, the community reinvestment act....i repeat, only 6%....

94% OF THESE SUBPRIME loans that have brought us to our knees, were made to people not involved with fannie/freddie and the congress's/president's initiative to put more people with lesser means in to homes.

care

6% is a rather LARGE chunk


and quite frankly, i dont trust those numbers
just because thats what was reported, doesnt mean that some werent done just so that law wouldnt be envolked

 

[manu1959]

anyone owing a mortgage more than 31% of their income is considered high risk....no?

So, even if they are paying it now, foreclosure could be here a year from now with them....

so i am just guessing, but maybe this is good because it stops this continual drip drip drip of foreclosures and uncertainty of the housing market getting worse as the years continue on....?

to a degree i can see why investors would be upset...

but also to a degree i could see how the home owner PAYING his mortgage regularly, which was more than 31% of his income be pissed that he did not get the chance to refinance and the guy who DID NOT PAY his mortgage on time could....etc.

what a mess! a real mess!

yes, too bad congress passed laws forcing them to MAKE those high risk loans

i differ with you dive con on this....

first...they didn't FORCE anyone to make those loans as you put it.....

second...out of our entire mortgage crisis with subprime mortgages issued.....ONLY 6% were made to those in areas covered by CRA, the community reinvestment act....i repeat, only 6%....

94% OF THESE SUBPRIME loans that have brought us to our knees, were made to people not involved with fannie/freddie and the congress's/president's initiative to put more people with lesser means in to homes.

care

didn't acorn sue banks to force them to give loans to people that couldn't afford them because that would be discrimination against people that can't afford things.....