Mortgage Mods, Defaults, Home Prices, Home Sales & Giving Taxpayer Money Away

Posted on December 9th, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage's Personal Opinions/Research

Well folks, the past few days of news have been peppered with stories about the very things that I have been warning you about for the past year. As a matter of fact, some big shot analysts and media types are suddenly writing and speaking using lingo very few out there use. Hmm… I wonder where they got it.

I really have no comment other than ‘tolja.’ For my opinion on all of this, just CLICK HERE and read back over the months. Now it is time for some solutions, so let’s hope the right decisions are made going forward, such as mortgage modifications done the right way. Thanks for letting me gloat…and vent. -Best, Mr. Mortgage

Recent News Aggregation by

Ouch! Borrowers Keep Defaulting After Mortgage Modification (
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Foreclosure bailouts unlikely until Obama in office (
When Lower Mortgage Rates Don’t Boost House Prices (
Lower mortgage rates aren’t the answer (
Lower mortgage rates no silver bullet (
New lending deals won’t bring back 2006 (
Lower mortgage rates aren’t the answer (
Where’s the strategy for $700 billion? (
Paulson Considers New Plan to Screw Responsible Borrowers and Renters (
Treasury urged to screw retirees and savers (
Treasury Tries to Re-Inflate Housing Bubble (
Treasury Weighs Messing with Mortgage Rates (
Let House Prices Fall (
Stabilize House Prices By Cutting Them Drastically (
Mortgage fraud incidents up 45% in second quarter (

Recent Mr Mortgage Research


    5 Responses to “Mortgage Mods, Defaults, Home Prices, Home Sales & Giving Taxpayer Money Away”

    1. The biggest problem with current modification efforts is that they only work on one-half of the financial statement – the cash flow – and neglect the net worth side.

      The second thing to consider is that a majority of people who get in trouble get so because of loss of employment/income. The banks’ responses, especially through Hope Now, are to set up repayment plans, forbearance agreements, or temporary interest rate reductions. It’s like using a band-aid to heal a gaping wound.

      Maybe when Obama takes office, the banks will be so fearful of a BK judge cramming-down their loans that they will start doing so themselves.

    2. Mr. Mortgage,

      I don’t think they will ever do the bailout you propose that is needed to fix the problem. Simply because it is such a hotly contested issue of bailing out the homeowners and if one person gets bailed out, everyone else is screaming “What about me”. We have seen this very strong feelings on this played out time and again on this board. Unless they can hide the fact of what they are doing it would be political suicide.

      Look at how these politicians bend with the wind. When anti bailout sentiment ruled it was “No Way Jose” to the automakers. When it suddenly became “Holy Crap, we have a jobs problem” they turned right around and did what I said they should have done from the outset, fund them to Obama and get the negative economic jobs outlook off the Christmas shopping season.

      We have a bigger problem looming. It is called California flight. People leaving California to find jobs and escape the coming tax increases. This will further to drive down rents and make the disparity of rent verses house payment much wider.

      Arnold Schwarzenegger is proposing a 1.5% sales tax increase. This will bring the city of LA from 8.25% to 9.75%. But the city is in dire straights too. Expected deficit is 110 million dollars and will likely be worse when all totaled. I clearly see the City of LA taking an additional 1% sales tax increase in the future to balance out. That would put LA city sales tax to 10.75%. People are not going to stick in CA with these type of tax increases. Seniors with fixed incomes are going to seriously going to be shopping states to avoid this.

      Job seeking flight and tax flight will be the next wave to hit California rents and home prices. We will be going back to the huge fluorescent banners screaming one/two months free rent like it was back in the LA County south bay after Aerospace moved out a decade and a half ago.

    3. I live in Chicago and:

      The city of Chicago has the highest total sales tax of all major U.S. cities.[37] It is also one of the most complex. 10.25% is levied on all non-perishable goods purchased, while 2% is levied on qualifying food, drugs, medicines and medical appliances.[37] The Illinois Department of Revenue collects a 3% Chicago Soft Drink Tax and a 1% Metropolitan Pier and Exposition Authority (MPEA) “Food and Beverage Tax”, on prepared food and beverage purchases in the downtown area (These “downtown” boundaries are: Surf Street on the north, Ashland Avenue on the west, Stevenson Expressway (I-55) on the south, & Lake Michigan on the east. Furthermore, O’Hare and Midway airports also fall under the 1% MPEA tax district).[38] In addition, the Chicago Department of Revenue collects additional sales taxes on items such as fountain drinks, bottled water, liquor, and cigarettes.[39]

      I can say there was little outrage over this high tax. Personally, it is not worth getting in your car and driving to the suburbs to buy items. Too much traffic and a big hasstle. It is almost like your are trapped.

      Our neighboring state of Indiana ousted the Governor becuase he raised property taxes. His replacement lowered property taxes back down where they orginally were and raised the state tax from 6% to 7%. Everyone seem happy….at leaset for now.

    4. MM, you deserve the cred! Your analysis is excellent.

    5. The escalation of taxes in a depressed economic environment reads like a playbook. And we will see it played out wherever local & state governments think they can get away with it. It’s as old as the hills because that is how Government works, 101.

      What you see at the federal level is what you will see in kind at the local level:

      Take from producers to support programs which are nothing more than extensions of government tentacles designed to make dependent, the citizenry.

      Economic hardship in a climate of cultural decay (victimology) simply reinforces this deadly, Liberty-robbing cycle.

      Taxation (without representation) functions on an apathetic electorate when asset prices are on the rise, your money still has purchasing power and there are still jobs to be had.

      As the aforementioned attributes of a sound economy begin to implode, such as what is happening now, tensions rise in direct proportion to the accompanying desperation felt by the electorate.

      Yes, there will be tax revolts as the rift between those who clamor for more bailouts (government) and those who want to keep the purchasing power of their hard-earned savings, widens.

      Purchasing power is something you will be paying attention to as this current phony dollar rally crumbles like feet of clay under the weight of $Trillions newly created debt with no backing.

      Mortgage, banking, commercial real estate, bail-outs, etc. Our currency (Read: Your savings) is the ‘victim’ in the cross-hairs of the near future.

      Peace –


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