Comments on: Banks Giving 1-2% Teaser Rates as Modifications

By: Bank-Implode! » Foreclosure Forestalling and Fake Modifications

Bank-Implode! » Foreclosure Forestalling and Fake Modifications — Fri, 14 Nov 2008 17:48:55 +0000

[...] or later house prices are going to collapse there’s no stopping it, these new programs are swimming upstream against the subprime [...]

By: Susan Day

Susan Day — Fri, 14 Nov 2008 02:07:17 +0000

The problems owners are homeowners who purchased in the last 5 years approximately with a fixed or adjustable,with or without a down payment, that 93.57% of homeowners are paying their mortgages on time. That percentage is as of 8/31/08, with values still decreasing and more adjustable mortgage still waiting to re-set that percentage should also decrease though, those are your problem owners.

The real problem is the government does not want to let the lenders or investors take a loss in their income producing mortgage back securites. Everyone in government and the mortgage industry is aware that home prices are headed toward over-correcting creating more of a mess. Until the government mandates a blanket reduction in mortgage loan principal balances for all homeowners affected by the negative equity and controls the deflationary cycle of housing at the same time, the foreclosures and falling home prices will continue.
I had faxed a 46 page proposal that will end the downward cycle and benefit all homeowners affected by negative equity, but it called for the lenders/investors to take a 20 cent on the mortgaged dollar loss to all the senators and FNMA. Surprise FNMA is the only response I received back, that they are forwarding the plan to Sheila Bair, Chairman of the FDIC for data base review.

By: Kurt Dinga

Kurt Dinga — Thu, 13 Nov 2008 02:40:49 +0000

I agree 100 percent. The answer to this mess is to clear it out (all the problem owners)…The Govt needs to stimulate buying if they can qualify under conforming limits at a fixed rate of 3 percent. Anyone who can qualify can get this rate. New Home Purchases only. All Refinances are allowed only if they are paying on time. Anyone late, no benefits. YOu do not reward a better rate to subprime clients (ones that are late right now). This is the answer and you have to shop the loans , get appraisals, close with closing attorneys, call a title company and stimulate the economy all the way to moving companies to banks, to brokers to appraisers..this is the answer and the only one..it will be painful but we will see the light and this is not a bandage like every other option I have seen..

Kurt D

By: fedwatcher

fedwatcher — Wed, 12 Nov 2008 10:07:34 +0000

David,

It still pays to live within your means and save. One must accept the world as it is and adjust to it. It is not fair and never will be, but lower housing prices are coming and buying to rent out will soon be back.

CompaJD,

They do not have enough new money to prop up housing prices. They are just trying to delay the day of reckoning.

Auggie,

There never will be justice for those who do the “right thing”. Just see the world as it is and adjust.

What is happening now is the “politically correct” response to those suffering from being upside-down.

Many were the victims on mortgage brokers and many gladly took whatever the mortgage broker was offering. Very high paid investment managers bought ‘shit’ and should be in Joe Arpio’s Tent City in the Arizona desert.

That is all water under the bridge.

What can you do now?
Get your latte from McDonalds rather than Starbucks
Embrace free digital TV and get rid of your cable
Be less aggressive in your driving and save on gas and wear and tear on your car
Have a brown bag lunch
Be frugal and start saving!

By: Auggie

Auggie — Wed, 12 Nov 2008 03:33:12 +0000

Where is the frickin justice for those of us who are responsible with our credit? I turned my home in Sacramento area into a rental and have been making my payments on time all the while this home keeps going down in value. I may just have to join the heard, stop paying making my mortgage payments, both HOA payments, insurance and property taxes, collect the rent to pay my new rent, screw my renters over and let the bank deal with yet another foreclosure or let them completely wipe out my 2nd and modify the 1st into a 30 year fixed (permanent) not temporary 1 – 2% fixed. I’M SO SICK AND TIRED OF HEARING ABOUT THE F’ING BAILOUTS, WHERE IS MY BAILOUT?????? The $1200.00 check I received ain’t cutting it. Maybe I should also quit the damn mortgage business and go to work for AIG or Goldman Sachs so I can get a golden parachute compensation package and stop trying to lead an honest and ethical life. I know some of you will laugh, I’m in the mortgage business andI said honest and ethical in the same sentence. Believe it or not it does happen. Anyways, this thread has just made me cringe. All the big banks are finally waking up and stating publicly that they better start modifying, but the problem is how do you trust the same damn bank that let you get into the predicament that you are in? 2009 is shaping up to be a real sh%$t pickle!!!!

By: mortgage analyst

mortgage analyst — Wed, 12 Nov 2008 01:16:29 +0000

In this post, you state that 60% of mortgage holders in CA have negative equity but on your previous post, Bubble-States Awash in Negative-Equity, the chart you posted shows 27.4% of CA mortgages with negative equity. Which one is it? Or are you just being dramatic in this post?

By: Chuck Beef

Chuck Beef — Tue, 11 Nov 2008 21:51:08 +0000

a necessary evil mr. m

what’s the alternative;

homeless, or more pressure on the rental market which will find itself in the same predicament requiring REO’s to be flipped with low balances or govt rent subsidies…

that sucking sound u here:
no matter which path is taken from this point it is a redistribution of wealth and assets.
in other words govt ends up a landlord in the long run, so why bailout these banks for the purpose of cap redux programs when all they are going to do is divvy the cash and close shop.

plan = hold off on bailouts until all the losers are dead.

By: CompaJD

CompaJD — Tue, 11 Nov 2008 20:55:18 +0000

This is just another way of propping up home prices. Price controls have never worked in any economy. This will surely lead to a prolonged recession. The sad thing is that banks are doing this to buy time and eventually .gov will be getting the printing presses working 24/7 to bail them out. We will have hyperinflation along with a recession which will be very, very frightening.

By: Dalvinder

Dalvinder — Tue, 11 Nov 2008 20:17:52 +0000

Looks like the Banks have not learnt anything. They are back on this option arm, the real root cause of the crisis. People will never learn either from their mistakes. Now they will pay the minimum 1-2% interest and the rest will be charged on their current mortgage. At the end of the year they will owe more than their property is worth and we will be back to square one.
We the people need not give out another bailout to such idiotic Banks who are only looking to get rich.

By: Pamela

Pamela — Tue, 11 Nov 2008 20:02:36 +0000

Amen David!!!