Bloomberg: Senators Ask Fannie / Freddie to Freeze Foreclosures
Submitted by
CalculatedRisk on Thu, 09/11/2008 - 11:04am (151 comments)
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The goal is to push new foreclosures until after the election.
Naw, the goal is to kick them past the elections.
Cheers,
Liv,
Cheers,
Except now the taxpayer is definitely on the hook for the MBS guarantees.
So this will amount to a straight transfer of taxpayer dollars to MBS investors, in lieu of payments from deadbeat borrowers.
Sounds fantastic.
do Socalists countries end socalism at election or does they wait for the regimn to fall ?
Welcome to Japan! This will only delay price discoveries. Why keep people in homes they can't afford? Why buy a house if you know there will be an avalanche of foreclosures after 90 days, especially when the unemployment rate heads above 7%? Senators are such idiotts.
elections?
No CR, the goal is to let people stay in their houses indefinitely without paying their mortgages. Or, to look at it another way, the goal is to use money borrowed from China etc. to pay people's mortgages.
If you do not think "90 days" will become "180 days" will become "360 days", then you do not think like a Democratic senator.
Nemo,
It's tasty and wonderful. All those nice people who bought that MBS expected no risk. So it's simply FANTASIC that the taxpayer is on the hook for this.
It's also SUWEET to know that we're on the hook for all the short term paper on the liability side of the balance sheet as well.
This makes me feel so warm and fuzzy inside. It's PROZAC-A-RIFIC!
Cheers,
ext will be a 90 day freeze on bank failure's, financial firms bk, inflation, and of course layoff's.
I can't say that I'm surprised by this.
Once the problem becomes political instead of economic, we're going to hand out money willy-nilly.
You guys are missing the really important part - It's BIPARTISAN!
ational disgrace - Dodd is a certifiable idiot. Barney Frank is close behind
I suppose the goal is work out more modifications ... nothing else will change in 90 days.
Well, in 90 days that home might not have copper wiring or piping, or fixtures...
but other than that, yes. Just the same.
The real topic of discussion is this: why isn't the bond market punishing even the hint of this stupidity????
I think they'll ask to freeze hell next.
OK, which senator has a relative, or staff member, who is about to be foreclosed on by F or F ?
a trillion $ here, a trillion $ there, and pretty soon it adds up to real money.
Real money. Exactly. So why isn't the bond market punishing them?
There sure seems to be a fight going to keep the Dow green today.
A $T here and $T there and pretty soon you're talking used toilet paper.
Cheers,
The only thing this will accomplish is to put off a bottoming and a recovery for 90 days.
bond market is happy as long as big daddy is willing to eat their mistakes for them.
Lessee--if you're an FB on the edge of default, money is tight, and you hear this in the news, what does it incent you to do?
Um, stop paying your mortgage, of course! You just got a free 90-day reprieve!
Kick the Molotov cocktail down the road
boy i must not have paid attention in college , because all of this creative accounting and changing rules and laws ..............i never remember a chapter like this
Yeah MoM, it's bipartisan. Yep, that's pretty scary...cuz the only time they work together is when someone is about to get fleeced.
BAAHHH
Cheers,
Does that only apply to occupied homes? Because a lot of the ones I see turning up as REOs were vacant for months prior.
Deflation vs. Inflation?
I think the answer is we'll stumble through these half-assed bail outs while deflation takes hold until the pain becomes unbearable, at which point the Fed directly monetize debt we'll have massive inflation.
We'll convulse our way through to the glorious other side of this monetary cat 7 storm.
I suppose the goal is work out more modifications ... nothing else will change in 90 days.
I can only assume the goal is to convince people that there will be no penalty if they stop paying their loans.
Bloomberg:
Senators invited to visit the new particle collider.
O.k. now, you step into this side, and you step into that side, and we're just going to step back and flip this little old switch.........>| :::
Everyone gets a 90 day interest free loan on their mortgage!!!
is sure wish we hadn't stopped R&D on the neutron bomb.
A nice, limited yield neutron (that clears the humans and saves the buildings on Wall Street's leeches) would allow us to start again fresh. Don't forget to ask for the option that takes all the WSJ debt/paper along too.
these ain't no baby steps , these are giant leaps forward!
Our system will rapidly turn into a system of rulers and serfs. If you're fidgeting with Haloscan comments, don't have an 18K sqft house and don't have a G550 with vanity napkins that say 'Air Asshole', you're a serf. And you're going to pay.
Holy shit.
This recession is going to be long and painful. Welcome to Japan, 2.0.
I'm beginning to think that prices will drop 80% in real terms before this is over. A slow bleed on housing prices is going to bankrupt an entire generation of Americans.
Oh good, we will bleed to death more slowly....
It sounds like they are going to force FF to repurchase any loans out of the MBS before the loan servicer forecloses the loan. That goes back to Tanta's post about the two-year rule:
Calculated Risk: Freddie Mac and the "Two Year Rule"
...The servicer makes efforts to collect the past-due payments from the borrowers. Generally at around 90-120 days, if the loan is still delinquent, the servicer's obligation to advance payments stops and Freddie Mac is the one obligated to advance payments to the bondholders. The basic contractual terms of the MBS are that Freddie has the right, but not the obligation, to buy a seriously delinquent loan out of the pool at this point. The repurchase price would always be par, since the bondholder must receive 100% of principal invested per the terms of the guarantee. Obviously, a seriously delinquent loan is likely to have a fair value of much less than par, but Freddie has to take that loss, not the MBS investor.
However, that is an option, not an obligation. Alternatively, Freddie can allow a seriously delinquent loan to remain in the MBS, while continuing to advance payments to the bondholders, until foreclosure or modification, for up to two years. To my knowledge the two-year limitation has always been part of the MBS rules--it's just the outside limit on how long Freddie (same for Fannie) can keep advancing on delinquent MBS loans before they have to give up and repurchase them...
Oh good, we will bleed to death more slowly....
I think WS calls that 'fading': no pain, just blissful decent into unconsciousness.
I have a 9pm rule for having a drink after the kiddos are in bed. I am seriously considering cracking a beer.
LEH now below $4.00.
JimPortlandOr,
I think they also refer to this as unwinding, but I prefer deliberative hemorrhaging.
Call the vet to do a put-down for LEH: it is cruel to make an animal suffer.
No surprise here. Congress has made it abundantly clear that they will do whatever it takes to maximize losses for the tax payers.
Woohoo! Free lunches!
Note to self: Remember to send nasty note to my "federal special interest representative" (fna congressman)
Ah, below $5.
"GS is on line one, they say your wearing their trousers."
mer $19
MERde!
They're following Lehman into the black hole.
Damn that LHC! snicker snicker.
shazzammm: MER's haircut isn't scheduled until next week. Lots of hair to cut on WM, GS, C, LEH. But you might be able to get on the cancelation list.
I'm beginning to doubt that nominal prices will stabilize for the next three years.
What a disaster!
perhaps this has something to do with it:
"The chairman of the Republican Party in Macomb County Michigan, a key swing county in a key swing state, is planning to use a list of foreclosed homes to block people from voting in the upcoming election as part of the state GOPs effort to challenge some voters on Election Day...
The Macomb County partys plans to challenge voters who have defaulted on their house payments is likely to disproportionately affect African-Americans who are overwhelmingly Democratic voters."
staying classy as usual.
All three indices still fighting for green.
That's right, Senators, start making indirect moves for the public purse.
Read your own press releases, dummies: Federal collections in August are 6% below last August.
http://www.fms.treas.gov/mts/mts0808.pdf
The only way to stop these Congressional idiots is to cut off their funding. Unfortunately for them, that is exactly what is happening, now.
jg said: "The only way to stop these Congressional idiots is to cut off their funding."
Ain't gonna work, jg. They've still got checks left.
Viva La France
Great, now underwater homedebtors will have one more reason to NOT pay on the mortgage - thinking that a foreclosure won't happen even if they don't make the payments. If I was in that situation, that's definitely what I would be thinking.
A foreclosure moratorium will have the opposite effect as intended, by creating a whole lot of underwater mortgages that are now 180 days of no payments that haven't even begun the foreclosure process. Who thinks up this crap?
When is LEH just going to declare BK? Wipe out the shareholdes, and just work it out with the vendors and debt holders.
Isn't that what BK is for?
Clearly wamu at sub 3$ needs to merge with LEH at sub $5 and become too big to fail.
It's just that easy.
Now where's my fee?
Deflation v. Inflation
According to the blue print of the FED's battle to prevent/cure deflation, the next step is printing money "willy-nilly" style.
From Chairman Bernake's 2002 speech:
"But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation. "
http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm
A foreclosure moratorium is a rent subsidy.
In this case, Congress really is giving our money away to deadbeats.
someone is desperately fighting to keep this tape gree
WM is in the green on the day! Yaaay!
Well, the equity is in the green. The short term debt is trading at a 135% yield.
I want a mortgage moratorium! It's my right!
/head on desk
bump
bump
Ha, ha, T-!
The end is near. It is good to be short the market.
The schmucks/shysters/shylocks are fighting to the bitter end, trying to prop things up via futures purchases, again.
And, they will do so until they are dead; so what if they don't pay back their loans to The Fed?
But, the holdout investment managers seem to be waking up and puttting strong selling pressure on the market (or, at least, on the financials).
Why, what do you mean that in 60 days, nothing will change?
There'll be a new President elected, who promises change.
Do you think he's lying?
Why do you hate Murka???
OTOH, what better way to save up for a down payment than make no payments on your house for many months, and live rent free!
Heck, maybe you can even work out a principal forgiveness plan, AND live rent free all at the same time. Sounds pretty sweet, but there's got to be a catch in here somewhere right?
In this case, Congress really is giving our money away to deadbeats.
Mr. Beach | 09.11.08 - 3:50 pm
yeahbut, in this case, the deadbeats are bankers and mortgage brokers...
You know, for folks like tj and me, this is heaven: market nearing its collapse point, with gold tumbling as the hedgies are forced to unwind.
I look forward to buying $600 gold with my short-the-market gains.
healthy market: has the feel of a drunk driver..accident coming
While I agree this is stupid, they ASKED. They can be refused and I'm certain they will be. This is just political grandstanding and nothing to work up a sweat over. Look like you're doing something, senators, when you really aren't.
In the meantime, the desired effect is being achieved anyhow. Rates for a 30 year fixed have fallen below 6% and will probably be at or below 5.5% by election time. So what will happen is a lot of people will be switched to a nice, affordable 30 year fixed 5% loan and a big chunk of pending problems will be solved. Again, a 1% drop in the rate is like a 10% price discount.
So let's see...oil is trying like hell to go below $100 (it will), mortgage rates are dropping, and the unemployment rate is still not catastrophic. Looks like this election is shaping up as expected.
Who thinks up this crap?
Darth Toll | 09.11.08 - 3:48 pm
imho, mainly folks who think the middle class is still way too big...
This recession is going to be long and painful. Welcome to Japan, 2.0.
I'm beginning to think that prices will drop 80% in real terms before this is over. A slow bleed on housing prices is going to bankrupt an entire generation of Americans.
These guys are talking about deconstructing the mechanisms that make the credit markets work.
Repossessions are harsh, but they convince people to make their payments and give lenders and opportunity to recoup the losses on bad loans.
If we develop a culture that doesn't take credit seriously, then we're going to have a culture in which people won't be comfortable in lending out their wealth.
All the economic advantages that come with the sort of resource sharing that credit markets enable could be lost.
We're not talking about a Japan type scenario here. We're talking about potentially becoming a third world country.
THe Goal is definitely to prevent people from associating their foreclosure with the present administration. That is, pin the blame on the next administration while letting the taxpayers pay the interest.
ipodius, stupid question: Who can refinance that is underwater on the mortgage?
I look forward to buying $600 gold with my short-the-market gains.
jg | 09.11.08 - 3:55 pm
dang, wish I'd saved that reb ate. I coulda bought a whole OUNCE...
Easyenough writes:
THe Goal is definitely to prevent people from associating their foreclosure with the present administration.
Eggs Actly
Modifications? What modifications? I know that my clients (bankruptcy attorney here) are being met with unreturned phone calls, ignored letters, and agreements they thought they had that are sitting on someone's desk...etc.etc.etc. If these modifications are happening, I know I'm not seeing it, and I know many of my colleagues are not either.
Who can refinance that is underwater on the mortgage?
That's just a rule silly. Didn't you see the memo? It won't matter, it will be refinanced. Or can't you see this coming...
How close is "urged" to "ordered"?
3 mo. isn't going to do much for the "free lunchers" you're talking about. And pity the poor homeowner who just wants to get the albatross OFF his back. I don't think the govt. wants to own housing. Unless maybe they decide they do and will do it en masse all at once, new policy. That would be something.
What % of mortgages are F/F?
Fannie and Freddi Please help us get re-elected
that is all I hear with this.
of course the joke will be on the republicans if they actually win come November -- you can punt these down the road 6 months, maybe a year, but not for four...
ac, during this forthcoming Greater Depression, I will lend out my wealth only after they bring back debtors' prisons or reinstigate indentured servitude.
I will be reasonable, and not demand a pound of flesh on failure-to-pay.
these ain't no baby steps , these are giant leaps forward!
One small step for Paulson, one giant leap for all debt-kind. Because in the 60s we put man on the moon, and in the aughts, we're keeping idiots in homes they can't afford.
It's a bird! It's a plane! No, it's Congress!
Hooray, we are saved!
So let's see...oil is trying like hell to go below $100 (it will), mortgage rates are dropping, and the unemployment rate is still not catastrophic. Looks like this election is shaping up as expected.
Did you see that recent episode of Short View on the Financial Times comparing oil prices to McCain's popularity in the polls?
It's basically the same graph flipped upside down.
Dow up by 100. Just amazing!
ipodius, true.
Next stupid question: who would WANT to refinance that is underwater, especially if there won't be a foreclosure and they can live rent free in their golden prison?
Next stupid question: who would WANT to refinance that is underwater, especially if there won't be a foreclosure and they can live rent free in their golden prison?
Oh but there WILL be an eventual foreclosure, and they WILL lose the house. Or you can keep the house for an amazing low payment of XXX if you act NOW and sign up by 12 midnight tonight!
And what do you think they'll do??? I rest my case.
bac in talks to buy LEHamn...this is really becoming the junk barge.. per WSJ
dow +165
I love a free market....
Something's brewing, I'll guess a fed-aided WFC takeover of WM, that would allow a coverup of WFC's radioactive Heloc dump and safe harbor for sinking WM, eliminating 2 big negatives in the collapsing credit/debt markets. Bought WM at 2.14. Maybe I'll know in 10 minutes.
BOA may buy LEH according to WSJ.
We should probably write letters to reps asking them to give out even more goodies. Why not collect some instead of bitching about it?
Write an email to your represntative asking them to pump some liquidity your way. Why not?
Looks like BoA decided they don't have enough problems already. They've always wanted to have an investment bank. Be careful what you wish for as the saying goes...
This action would provide immediate relief to many homeowners'' and let the companies ``turn these non-performing loans into performing assets to minimize losses,''
I say we freeze them for 99 years.
That will turn the non-performing loans into performing assets for 99 years.
No losses for F&F means no cost to the taxpayer.
Also, relief to homeowners is that they get 99 more years of rent free living, which will give them more X-mas money to spend at Mao-Mart
Everybody.....hop on the bus.
Lewis told investors in October he'd had ``all the fun I can stand in investment banking'' after about $2 billion of writedowns and trading ...
I give up. I hate it this is going to drag on as Japan 2.0. If we can't get price to go down, lets do the reverse:
The govt should just pardon all mortgage and gift every homedebtor the house.
That'll solve the Dem's demographics.
Then, the govt should just gift 500billion capital to all wash st companies.
That'll solve the Republican's demographics.
Then the govt should declare war on the rest of the world that don't send us their deposits. We'll tacitly split it with all nuke-owning countries.
That'll teach those foreigners to mess with us.
We own the nukes, your move?
Might makes right.
"BofA may only do a Lehman deal if it is encouraged by the federal government, since it has its hands full digesting mortgage lender Countrywide Financial Corp."
Lehman Races to Find a Buyer - WSJ.com
"But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."
The speech that destroyed a nation.
Dow up 350 points from open. Is this action all PPT and IBs? Incredible.
"Without explicit government support, a range of other suitors have proven uninterested in absorbing Lehman and its $600 billion balance sheet."
WSJ
REBear: Write an email to your represntative asking them to pump some liquidity your way. Why not?
Apparently politicians are too f*cking stupid to understand that the problem isn't over until people can once again afford houses. To that end, I propose that they announce a new program called the Patriot Bonus. It would be an annual income supplement for everybody who renounces terrorist ideals such as government criticism.
If we develop a culture that doesn't take credit seriously, then we're going to have a culture in which people won't be comfortable in lending out their wealth
You can't stop them from lending out your wealth via inflation, taxation, borrowing, etc.
Property rights are being trashed.
You can't stop them from lending out your wealth via inflation, taxation, borrowing, etc.
That takes away the incentive to create wealth.
They can use this mechanism to take away the wealth people currently have, but they will quickly find that people stop producing new wealth to take.
covered leh.....grrrrr, short bac...right here.
Dow up 350 points from open. Is this action all PPT and IBs? Incredible.
Nah, just the volatility of a grizzly bear market.
"We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."
People who believe this also think they can push on a string.
I hope Ben lives long enough into the deflationary collapse to choke on his words.
We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
Out government is VERY determined.
Which senators?
I want to call each one personally.
Dow up 350 points from open. Is this action all PPT and IBs? Incredible
It's possible that the big move up was orchestrated. However, I would posit that it is a relief rally stemming from the realization that the world will not end without another IB or two.
The "too big to fail" mantra is BS.
"turn these non-performing loans into performing assets to minimize losses,"
WTF? They're non-performing because they're not being paid. Not foreclosing for a few weeks doesn't make the payments start rolling in. If the payments don't come, they're still non-performing. Let's all pretend we're solvent for this quarter, mmkay? Can I pretend I paid my taxes?
If foreclosures can be pushed out another 90 days, why not 180 days? Or how about 365 days? Heck, why not 10 years? Why can't they just legislate no more foreclosures?
Lemme outta here!!!
ipodius,
Good lord man, do they pay you to infect financial blogs and spin the "unicorns and rainbows" line???
Real simple, personal story being played out by myself and a BUNCH of my friends right now. We are all in our early 30's, ex-business owners (now) and figured out YEARS ago what the game was and was going to be, because they (the bankers) TAUGHT us how to screw people.
Typical scenario, and trust me it is being repeated. Make 250K plus for three years. Run credit score up to 820. Buy stuff at 0 down, long term payments at ridiculous cheap service terms. Pay minimum payments, on everything, cards, loans, anything. take funds across border to nice up and coming beach area, buy condo. Use income to pay down so you own.(can be done in three years,;p) move all toys and goodies including the gold and silver and rv's and dirt bikes and etc. down to the beach pad. Keep 150-200K cash in mattress. (several actually) Oh yeah, big balances left on EVERYTHING.
The government is NEVER going to pay they're bills so why the hell should I???
BYE BYE
You can get BETTER healthcare,dental, perscription, education and generally live WAY better for 10K a year.Probably even cheaper now.
Can't domesticate me or my debt to Mexico, and if they found a way it would add 30% to the total write down with very little chance of recovery.
There are SOOOOOO many of us, you haven't even seen the tsunami of default yet.
Hear that? that is the sound of a lime getting cut by the housekeeper for my beer. Full time, 60 bucks a week.
let me know how your retirement works out.
That takes away the incentive to create wealth.
In a free market yes. But much of the wealth created over the past 25 years was un-earned and the result of credit inflation. The wealth is so concentrated now in the non-productive financial sector that I suspect we will have a long drawn out confiscation via negative real interest rates.
The days of making money from money are over. Our economy, as it now stands, can simply not pay the interest the finacial sector has placed on it. Compounding has exceeded productive capacity. That's the deflation part. The government will add the inflation part.
Stagflation.
next will be a 90 day freeze on bank failure's...
That would mean a 90-day freeze on your accounts. Which would encourage bank runs.
Schumer always seems to keep his name in the bright lights. Very nice move and it keeps folks happy and in their houses for free longer. Why not just stop all foreclosures until the election of 2010?
The absurd idea suggestion box is now accepting any and all ideas with priority given to Congressmen.
Temporary Open Market Operations - Federal Reserve Bank of New York 36 billion shoveled into the markets today
I sincerely regret not having a mortgage with them so I could stop paying and get some of this free money.
Panic by the PPT/schmucks/shylocks/shysters: in the 18 mos. that I have been logging S&P futures purchases, today's volume was bested only over Mar. 13-17.
The end is near.
jg -
Where do you get the futures data? Is it publicly available?
90 days means only that a tidal wave will build during the next 90 days. Rather than a manageable constain flow, you will see a huge massive surge as everyone puts their inventory out there at the same time. Nice plan.
Two possibilities here for today's action:
1) No way 'they' were going to let the market fall on 9/11.
2)There's a surprise rate cut or some other gift to Wall Street from the Fed to be announced tomorrow. They just gave their buddies a heads up so they could position themselves a little better. What's wrong with a little inside info among friends?
Liv, here's the datasource (free):
Intraday Futures Prices - Markets Data Center - WSJ.com
The data is perishable: SP500 Mini cme contracts get swiped clean at 1:30 p.m. PT.
Let's do this then. All those houses that get a deferred foreclosure become owned by HUD. That way when these people get their Democrat free ride, their neighborhoods get guaranteed to go to Democratic hell eventually. Within five years, for sure.
Good... good!
Let's set up a special new plan:
Nothing can possibly go wrong with this idea! ARGH!
@stealthwii
The senators Sherrod Brown of Ohio, Bob Casey of Pennsylvania, Bob Menendez of New Jersey and Charles Schumer of New York wrote that the companies should "take whatever actions are necessary" so more families "do not have to suffer the economic and personal disaster of foreclosure."
The article requested is no longer available.
Their goal is to avoid more foreclosures until the election and take credit for it. What changes is that, after November, they don't need to pose as saviors anymore and can let the foreclosure mill running again.
"avoid more foreclosures until the election"
that just doesn't make sense to me. the Dems don't need to do that, they aren't the incumbent party. the Repugs are on the hook for the current economic mess anyways, so why do something like this, because it doesn't matter anyway. the repugs are out.
Ok, here is ll at ground zero for mtg foreclosures. 2 clients 2 days. Both formerly rich. Both long term investors in real estate.
one has property in a county near Orlando--5 houses severely underwater.
I've been wondering why he continues to pay an extra 1500 per house per month on these houses (which have a couple of other investors, too). Multiply it X 5 times a year X 10 years. Oh, and it's interest only.
One has a house he bought at peak, with 30% down, and he's still 'way underwater.
The first one will probably default this month; the 2nd defaulted 5 months ago, is asking for a mod and being ignored.
Both lenders? Countrywide now BofA.
Neither one of these borrowers is going to pay one red cent more, unless they get a mod. One will live free-no foreclosure filed yet; the other will get rent payments, until the people move out. I suggested that he send the payments to Countrywide, to avoid being accused of skimming the rent. I'm pretty sure the payments will not be accepted.
Don't know if either of them have F/F involvement. But if they did this moratorium would mean absolutely nothing unless a mod was offered. Neither lied on anything.
They've just come to realize that they are never gonna be above water, so why throw their hard earned money down the toilet?
Also, I have actually couseled people to save up money and walk away. If the lenders were co-operating (and maximizing profits to do so), I would feel guilty. But they are not. In the most notable case, the closing atty stole the money that was supposed to pay off the first mtg in a refi, so he is technically liable on 2 mtges; the title underwriter wasn't paying right away; this was 5 months ago, don't know if they've done so yet; don't know if they will ever do so. Not one shred of guilt to be had there, except from the theiving atty and the nonpaying underwriter. I don't think foreclosure has been filed at all in that case.
I am small potatoes. But this week, the combined loss for the banks from my clients will be nearly a million bucks.
And don't talk to me about deficiency judgments. Nobody's asking for them.
The banks are too poor stupid or cheap to compare what people put on their applications as their assests to the houses being foreclosed. Nobody even checks this unless a short sale is asked for.
And I think I finally persuaded the hub to move our money out of Washington Mutual. Not that we have that much in there, but I'm doing my job in trying to bring them down.
Run, runn, runnnnn. . .
So what will happen is a lot of people will be switched to a nice, affordable 30 year fixed 5% loan and a big chunk of pending problems will be solved.-ipodus
We are lucky long-term rates are so low. I'm surprised that inflation and the government running a deficit that we don't have higher interest rates. The government keeps selling more and more bonds; they pay less than inflation; but people carry on buying them.
It makes me think things aren't that bad. Investors must anticipate lower inflation and the US gov't getting its budget under control.
If LT bond yields were way up, this out of refinancing into low fixed rate mortgages would not be available.
So temporarily living in a house one could never afford, for a minicule monthly rent, and eventually having to go back to renting is.....what?....suffering economic and personal disaster of foreclosure?
Can I haz suffering, plez, preferrably on or near a nice beach?
You CAN'T get a 5% mtg, or a 4% mtg, or a 1% mortage if you are underwater, unless you bring lost of money to the closing table. See the banks raising the cushions, which should have been done years ago, and now will serve to drive them futher under and more and more underwater drowning folks walk away, or stop paying. If you are "only" 10%underwater, yeah, there's some hope of poking your head above water someday. Most of my clients are hopelessly underwater, sometimes by as much as 50%!!
Oh, and for those who don't know, I'm in Florida.
ipodius: While I agree this is stupid, they ASKED. They can be refused and I'm certain they will be. This is just political grandstanding and nothing to work up a sweat over.
Ha. These guys are banking committee senators. They have extraordinary influence. Fannie and Freddie are now their plaything. Who the hell do you think is going to stand in the way of this? The Bush Administration? Mortgage finance is nationalize and politics will carry the day.
the dance aint over till someone dances with the ugly girl!
hey lawyerliz, I'm in California a "escrow state" and am wondering if in Florida a "lawyer closing state", does the Lawyer have a "Fidicuary" obligation to their client. If so has this opened a whole can of worms as to lawsuits from clients??
Let's keep in mind that the so-called counsumer advocates who are pulling the senators' strings are being financed by us taxpayers. The acronym ACORN is so very appropriate, given that the members are nuts.
the Dems don't need to do that, they aren't the incumbent party.
They're the incumbent party in both houses of congress. It's not a given that a change in party in the White House means an increase in party seats in congress.
well, that's what happens when we elect people into the government who tell us what we want to hear instead of telling us what they plan to achieve.
Is it time for the USSA = United Socialist States of America, official name change yet?
Sad.
Oops. Make that "consumer," not "counsumer," advocates.
Hey, Louie.
Umm depends who the client is. If I'm just doing the closing for the bank, I'm representing the bank. Things get more hazy if I sent my client off to the broker and am now closing for the bank and borrower. have to be real careful that no toes get stepped on. There are non real estate attys who think everybody should be represented by an atty. would be hopelessly expensive.
We compete against title companies here, who are usually more guilty of stealing money that attys are. but then, I'm an atty, and I would say that, wouldn't I?
Lawyerliz, reason for the inquiry is that in California, the Lawyers are trying to make a lot of hay over what they are saying that lender/loan officer not fulfilling their "Fiduciary" obligation, and are trying to be very pharisaic over this to void out loan, modify, and suits in general.
I don't see how this responsiblity conveys the spirit of the law.
It seems to me that the tort concept of "implied fitness" for use might actually be more to the point. I defend foreclosures, yep, it started as my vengenance on banks for how mean they treated the applicants and only when I thought the client could come current, which usually they did.
Now, since there aren't hardly any more loan closings, well, I stretch things out a bit. Once in a while the client is able to come current.
I have never used the implied fitness argument, don't what to face charges of frivolousness.
All the banks had to do is make people put 5% down and not do liars' loans and we wouldn't be in this mess.
Maybe a small mess; but one that we would be able to easily clean up.
Well - we just bought all the mortgages from fannie and freddie, so lets just default, wipe out everyones mortgage balance and start all over again, we can afford to pay higher taxes because we have no mortgage payments, therefore we can fund healthcare and social security and a couple more wars. Foreign governments nationalize shit on us all the time and screw us. Screw the russians and the chinese all in fell swoop. Let it be known as the biggest orgy and screw of all time.... Sorry just working on my new campaign speech, I think I use the theme Change.
LawyerLiz, are you saying the borrower would/could argue the lender/l.o was or should have been aware how the loan would fullfill their need/use?....if so, how/could it be used with a lot of alt a or sub prime loans where there was "no doc" or stated incomes??
it's seems like those guys were watching a little bit too much of Superman and similar movies, during their launch breaks.
Can someone turn off the TV in the Senate' cafeteria please?
it's like an open season on "i want to be a superhero" just started. why do they fail to realize that a superhero with a children size brains rather becomes a villain?
They have been putting off auctions quite a bit of late.
I suppose the goal is work out more modifications ...
You cannot modify a loan that didn't make sense in the first place.
trust me.
The real housing crisis is people who can't afford homes are living in them for zero rent, and people who now can afford them aren't allowed to buy them. This is why we need to get rid of the Fed - they've simply done far more harm than good these last few years.
Welcome to the People's Republic of America.........
sue, you cant. if you default on 800b bonds belonging to chinese, the chinese wont lend you 800b a year and then you would have to spend 800b a year less. sry wont gonna happe
Sad, a waste of tax payers money and ultimately futile. What's next, is the government going to propose freezing credit debt or even provide interest free credit cards for those that are having problems paying off their credit card debt? Give me a break. For folks like me, who have been prudent and careful with their finances, it really irks me that we are bailing out people who have not been responsible with their finances.