http://apnews.excite.com/article/20090125/D95UAMHO1.html

“A bill to give judges authority to alter loan terms for primary residences may be the quickest way to arrest the housing market’s collapse. Most Democrats in the House and Senate support that plan. President Barack Obama told Democratic leaders Friday he also backs it, according to a Senate aide who was not authorized to be quoted by name.”

What does the MBA think?

“The chief lobbyist for the Mortgage Bankers Association, Steve O’Connor, said new homebuyers would end up paying higher interest and bigger down payments if lenders are saddled with the risk that a judge could change mortgage terms.”

“The bankruptcy solution would not cost taxpayers money, as would mortgage modification programs that could become part of the government’s huge economic bailout package. But it certainly would harm the bottom line for lenders and investors holding mortgages.”

Very interesting.

Above quotes from AP article (link above) by LARRY MARGASAK

Steve, you have an inspired way of getting your point across. I do agree with many of the freedoms of renting you tout. But, I’d much rather mow a lawn or paint an occasional room then “just move down the street” every time a landlord rubs me the wrong way.

I don’t move often, but I must say, I’d rather go mall shopping with C.C. then move.

And, there is no lie about the tax deduction. If a typical PITI pmt is $3000 and one gets back 30% on their I&T then the effective house payment is about $2300. Not too bad if a similar house rents for $2100 in today’s dollars. Rents go up. 30-year mortgage payments don’t.

Now, I’ll send you $100 this April if you’ll send me back $60. But you better come mow my lawn.

Some of those loans were nothing short of a sin. They were deceptive.

The broker/bank gave people the impression that everything would be alright. A friend of mine was approached by one of those predatory lenders – they gave her a story that was so twisted she couldn’t explain it to me but kept saying “I can get money out of my house.” I convinced her to keep the fixed loan that she had. She’s ok now. If she had bitten, she would now be among the homeless.

It was bad enough that people were allowed to get into products they couldn’t afford and they lost their homes. Now it looks like the second deception is going to be worse. Those who should walk away are being tricked into rewriting their notes so that they will be “owned by the company store” for the rest of their lives.

I am convinced that these mortgage mods are designed to benefit the banks. If a homeowner makes out ok, then that’s just a collateral benefit to the program to help out the bank.

Here we go trading one deception for another one.

“There is already empirical evidence that some of the lenders will utilize legal verbiage that will protect their interests—as contemplations for a loan mod—to limit the recourse a borrower can have regarding the original loan. With mortgage loan document audits fast becoming the favorite tool of loan modification companies and attorney throughout the nation, the lenders are attempting to pare their losses.”

“These audits are showing a common violation in adjustable rate mortgages, where the amount financed is understated. If it is as little as $100—-it can be a statutory defense against foreclosure. We expect these audits to spawn attempts at class certification against some of the larger servicers and lenders, if accepted by the courts….””

Those two quotes were taken from:

http://www.pr.com/press-release/123522

If this is true, this makes a lot of sense.

Bankers talking to each other: Boy did we mess up. Looks like our mortgage documents are junk. We need to do a CYA. Let’s create an excuse.

(Bankers exit right and proceed to create a credit crisis.)

Homeowner: This credit crisis caused my job to go away and my house value to drop. What can I do?

(Bankers enter right.)

Bankers: We can save you. We will give you a mortgage mod. We’ll lower your rate and even reduce your principle (with this TARP money). You can live in your house for as long as you live as long as you keep up with these new lower payments. All you have to do is just sign new mortgage documents.

You won’t have to be bothered with all that fine print. It’s the same legalese mumbo jumbo that you signed before. We just took out half a word. (Banker points to docs with “non-recourse” changed to “recourse”.)

Homeowner: I’m desparate. I’ll sign anything that will let me keep my house.

(Bankers tear up old (junk) mortgage docs. Homeowner signs new loan. Bankers grin.)

Scene fades to black.

Why even appraise the home? Non-recourse is the only incentive lenders have to make responsible loans. Down payment is the only incentive borrowers have.

We’ve seen the result of one of those being eliminated. Why not go for a FULL free for all. Another grand idea, Kevin!

Like every other type of loan that exists. Makes perfect sense. Their modification is more than enough reward to actually be liable for their newly reduced debt. Better than hitting the lottery.

mortgagereliefformula.com/recourse/