So we tax payers are going to bail out the bad loans

[2Driver]

1990 all over again. When do lenders and borrowers get to feel the pain for their idiotic financial decisions? Now I have to help pay to clean their $hit up? :rolleyes: :mad:
President George W. Bush is expected to outline on Thursday a plan to freeze mortgage rates for five years for many U.S. homeowners facing sharp increases in their monthly payments, industry sources said on Wednesday

[Mandelon]

There isn't supposed to be any taxpayer money involved. Its a better deal for the banks to show some leniency and extend the teaser rate out a couple of years, and maybe make up the difference at the end of loan....instead of foreclosing on thousands more homes and driving the US economy and possibly the world's into the shitter.

[centerhill condor]

well, I don't know about a taxpayer "bail out"...but I'm guessing that we'll have to pay the difference between what the borrowers should've paid and what they will be paid.
Either way, its a total load of crap created by the gov't. Almost the same thing happened in the early 90's. These "loan originators" don't care about you paying back the money. It ain't theirs! They get paid the same.
I say kick these nonpayin' sons of female dogs out! and let the investors take the loss. They loaned money at higher rates with higher risks and this is what happens. This is suppossed to be lose/lose when you try to beat the system.
By doing any form of "bail out"...taxpayer funded or not all they're doing is extending the pain and causing more harm to the markets, real and financial.
CC

[phebus]

If it's not taxpayer money, I'm all for it. It's better then a bunch of homes in your neighborhood going into foreclosure and driving home prices down further.

[C-2]

If it's not taxpayer money, I'm all for it. It's better then a bunch of homes in your neighborhood going into foreclosure and driving home prices down further.
Too late in my hood - got 4 already :mad:

[mbrown2]

There isn't supposed to be any taxpayer money involved. Its a better deal for the banks to show some leniency and extend the teaser rate out a couple of years, and maybe make up the difference at the end of loan....instead of foreclosing on thousands more homes and driving the US economy and possibly the world's into the shitter.
Bingo...folks are worried right now about some guy not paying for his boat parts....(ie: everyone feeling a little pinch)........if we let the chips fall where they may and the whole darn thing will be owned by foriegn interests within 12-18 months...I mean the entire US banking and finance system....I am not sure this Gov move will help but it is a start...

[HOSS]

phuc `em,,,let live on the street! If they couldn`t afford it they shouldn`t have bought it. Again,PHUC `EM!

[AZJD]

Honestly it is 100% the borrowers fault. Self control people. If you are living in a house you cannot afford, it's your own damn fault. Now the average home buyer can't get a loan unless you have spotless credit and a chunk of money in the bank. Lenders are all scared. (which is their own fault)

[LhcBrad]

If we want to move things in a better direction, we need to REDUCE government handouts, not INCREASE them.

[2Driver]

Honestly it is 100% the borrowers fault. Self control people. If you are living in a house you cannot afford, it's your own damn fault. Now the average home buyer can't get a loan unless you have spotless credit and a chunk of money in the bank. Lenders are all scared. (which is their own fault)
Yep and I have to think if the Government is involved it going to cost us somewhere, (agents, monitoring etc).
Gee I over extended on my home, took what equity I had to buy an RV and a new home theater and now I am upside down when they called my ARM. Somebody should be responsible to help me

[beerjet]

phuc `em,,,let live on the street! If they couldn`t afford it they shouldn`t have bought it. Again,PHUC `EM!
Thats what I'm phuckin sayin PHUCK 'EM ! :mad:

[Mandelon]

Geez, there's no handouts. The administration is simply trying to coordinate the lenders to reduce the crazy number of foreclosures. The idea is the teaser rate, or a similar rate will be extended for a few extra years. Hopefully the market can recover pricing and then they can sell or refi at that time.
It will be cheaper for the banks in the long run, which should keep us from having to pay higher fees to make up their losses. Its a good thing for the economy. It will keep YOUR home's value from dropping further.
I agree it isn't quite fair for these borrowers to catch a break due to their own poor choices, but the hard lesson will be painful for all of us if there isn't something done.
Values drop, property taxes drop, and suddenly your local government has to cut back cuz they're overbudget... keeping home values from dropping will benefit everyone.

[Big Warlock]

I love how there is always one or more assclowns on here that blame "W"!! Yea, George went out and created this.....right!!!!
Look at the other parameters of the economy. Overall, not too bad shape. The press does more damage on a daily basis!!
You want to help? Go out and buy something!!

[OutCole'd]

Geez, there's no handouts. The administration is simply trying to coordinate the lenders to reduce the crazy number of foreclosures. The idea is the teaser rate, or a similar rate will be extended for a few extra years. Hopefully the market can recover pricing and then they can sell or refi at that time.
It will be cheaper for the banks in the long run, which should keep us from having to pay higher fees to make up their losses. Its a good thing for the economy. It will keep YOUR home's value from dropping further.
I agree it isn't quite fair for these borrowers to catch a break due to their own poor choices, but the hard lesson will be painful for all of us if there isn't something done.
Values drop, property taxes drop, and suddenly your local government has to cut back cuz they're overbudget... keeping home values from dropping will benefit everyone.
Ding Ding Ding, like it or not, Mandy's right. It will cost everyone a lot more to do nothing.

[socalmofo]

Ding Ding Ding, like it or not, Mandy's right. It will cost everyone a lot more to nothing.
Very good points. You usually seem like the sky is falling but I really agree with what you just posted.

[beerjet]

Next time you fall on hard times because of your own stupidity , see if the banks or the gubment will help you out or let you slide on some shit . :idea:
:rolleyes:

[centerhill condor]

Ding Ding Ding, like it or not, Mandy's right. It will cost everyone a lot more to nothing.
I disagree...the harder the lesson the better learned.
CC

[McIntyrelocal]

If it's not taxpayer money, I'm all for it. It's better then a bunch of homes in your neighborhood going into foreclosure and driving home prices down further.
i agree and if you put it back on the investers it will screw everything up.The same investers behind the housing industry are the same investers behind most of the economy and if they lose money we all lose money.vicious circle

[C-2]

Sell, sell, sell and refi, refi, refi seemed to be the best advice given here a year ago.
Not sit tight cuz the market is going to fawkin crash and open up a can of whoop arse like we’ve never seen before.
I’m sure nobody on this board steered anybody wrong? Oh, wait, I know the answer to this question cuz whenever this topic is discussed on the other message boards I visit (collectively totaling about 500K peeps), not a single one of them did it either. In my best Beavis voice….uhhh .hhh hhh hhh uhhhh ….those were some other guys.
Gimmie a break. Everybody had their hands in the cookie jar.:jawdrop:

[mbrown2]

Look at the other parameters of the economy. Overall, not too bad shape. The press does more damage on a daily basis!!
I agree on the press comment...
But what other parameters are signaling green and trending in the right direction? Every bank is reporting losses, right downs, layoffs.....housing starts down, unemployment trending up 3nd and 4th qtr....Consumer spending down...
What others are so good?
Also, go back and look at the poorly managed government monetary policy during the 20's and 30's and see what helped us get into a depression and keep us there for longer then needed.....unrestricitive in the wrong places, and too restrictrive in others (cash infusion in the markets, interstate banking laws)....the government now better be agressive in dealing with it....

[RitcheyRch]

My thoughts exactly.
phuc `em,,,let live on the street! If they couldn`t afford it they shouldn`t have bought it. Again,PHUC `EM!

[McIntyrelocal]

The regulation has nothing to do with gov. money, he is mandating the banks to freeze the rates.not give them any money.everyone should be held resposible for there own actions (lenders) but if some people are to stupid to not read when they sign a contract or just not care what happens down the road when these loans do get called thats there own fault.

[Dave C]

lesser of two evils.
Beside most of these assclowns will probably default anyway.... its better to spread this out a little so the economy can absorb it better.
We don't want them defaulting all at once because that would create problems.
Its doesn't cost us a thing so lets extend their misery a while. :devil:

[2Driver]

I don’t think anyone blamed W on the subprime thing or anything else here.
Like it or not the bottom line is once again reckless borrowers and reckless lenders have put the entire US economy in a bad position. People that work hard, save and are fiscally responsible have to share in the hang over.
The savings rate for the US last year was negative 1/2% and I am supposed to help the shell game by going out and buying something? :rolleyes:

[3 daytona`s]

phuc `em,,,let live on the street! If they couldn`t afford it they shouldn`t have bought it. Again,PHUC `EM!
don`t hold back,tell us what is really on your mind.
:D

[bigq]

So let me see the investors that have put all this money up are now going to need to wait. How much of that money is with your local bank, give you one guess.
In the end I think it will dry up loans right now and lending will get even harder. Think about it...
If you were an investor would you lend anymore money right now?
Bad idea in the long run, but hey it will get the economy past the next election...right?

[HOSS]

I`m sorry, I disagree. Lets take the hit now and get through it. Lotsa peeps under the bridge? Lotsa crime? I`m packin. I`m not moving. I`m adding on to my humble abode. The country crashes? I`m packin. I`ll grow a big ace garden and eat deer meat. Phuc `em. If your a moron, burn like a moron. If your stupid,,,get off your ace. Looks like the fiddler came to collect. I`m done coughing my share up. Let the mutha crash. I`m safe. Thought you were gonna flip once too many eh? Well,,,the fiddler is there now. Why do you wanna handout from me. You were laughing at me only a year ago. Damn that diesel is sucking out the cash too. And just think,,,you only use it to go to the grocery. Now I`m laughing cause your on your ace. But you may just have the last laugh cause this STOOPID ace democracy seems to give everything to the jackasss that didn`t even care to begin with.
By the way you is for any moron caught up in the biggest real estate gamble in history. Not intended for anyone personnally.
I paid my dues to the club. Have you?:D

[Dave C]

NO the newspaper says its doing badly.... I don't want any of your fancy double talk.... now just do as your told and start worrying, damn it... ;) :devil:
Everything is W's fault... ;)
I love how there is always one or more assclowns on here that blame "W"!! Yea, George went out and created this.....right!!!!
Look at the other parameters of the economy. Overall, not too bad shape. The press does more damage on a daily basis!!
You want to help? Go out and buy something!!

[Dave C]

I kinda agree with hoss... well sort of...
.. even if we give them a bailout, they will probably default anyway for some other reason at some point in the future..... so really we are just delaying the inevitable....:D

[HOSS]

I think it's cool how you wish ill will on others. You ever heard of the word "karma?" I've heard it's a bitch.
Signed,
Shockwave"Still lives in the same house he bought 10 years ago"Bob
KARMA?,,,nah,,,I drink!

[bigq]

Plus this plan is really fair:
Already behind on your mortgage payments? No help there.
Able to make payments even after the rate on your adjustable mortgage moves higher? You can manage on your own.
Have an option arm??? no help there
Investor "flipper", second home?? nope
:rolleyes: :rolleyes:

[HOSS]

I`m fine in my house and will be there no matter what. Katrina (I stayed and rode the biotch out) taught me alot. 2 words my brothas from a different motha that are paying and wont let crime run their ace! Claymore Mine. Its 750 reasons not to be stoopid!:mad: :mad: :mad:

[McIntyrelocal]

So let me see the investors that have put all this money up are now going to need to wait. How much of that money is with your local bank, give you one guess.
In the end I think it will dry up loans right now and lending will get even harder. Think about it...
If you were an investor would you lend anymore money right now?
Bad idea in the long run, but hey it will get the economy past the next election...right?
It has nothing to do with the local banks. where do you think the lending companys get there money if we just let all the houses go into forclosure then the investers are going to get that much less money back. the less money they get back the less money they can invest somewhere else if at all.
if it keeps getting worse they wont want to put money out anywhere. thats how we get into recessions. The money that supports the economy doesnt come from the government or tax payers it comes from investers and people that need to invest because they have to much money and need to put it somwhere so they dont get taxed on it or even for a loss to right it off.

[HOSS]

People show their true colors when others are in trouble. That's all I'm going to say about that.
Yeah,,,a white man who again has to "foot the bill". That`s all I`m going to say about that as well.
Put a fork in that mutha phuca,,,,,it`s BURNT!

[McIntyrelocal]

I know people that could use the help. ive got friends that jumped on the band wagon and bought because it was there only chance.Some were lucky and got out of there arm and subprime loans and locked in a decent rates. and i know some that are struggling and might make it if they had a little extra time to move finances around how could it hurt to put it back on the banks for a little while they will still make the interest just not as much.

[McIntyrelocal]

You know i dont know a ton about this stuff ,just what would make sence to me.and it cracks me up how people just want to talk about how bad things are instead of finding and trying things that may have a chance. i like the economy to be in a good position, why just throw your hands up in the air and say well i guess thats it lets just watch it take a sh$t?

[Rexone]

I agree it isn't quite fair for these borrowers to catch a break due to their own poor choices, but the hard lesson will be painful for all of us if there isn't something done.
Values drop, property taxes drop, and suddenly your local government has to cut back cuz they're overbudget... keeping home values from dropping will benefit everyone.
I respectfully disagree. Values are highly inflated (still). That is not healthy for anyone nor is artificially propping them up. I don't care if my home value falls as long as they all fall, which they will. It's all relative. Government having to cut back I don't see as a bad thing. They overspend every dollar they get their hands on anyway worse than any consumer with a home equity line ever could. At least consumers are limited by their home's inflated value as to what they borrow and spend. Government makes an overextended consumer look like a financial saint as they just spend into the stratosphere when their credit's exceeded (that one we do all pay for).
The only pain that will be felt is by the institutions that made stupid loans, those foolish enough to be in those industries while believing the bubble would never end and not making a plan for when that happened, those who took loans for more they could afford, and those who anchored their businesses around servicing and supporting all these artificially inflated home prices with no alternative plan to make money in the down cycle.
Let it crash. Maybe then a would be first time home buyer will actually be able to afford to buy a home. Right now they certainly cannot and never will if prices are artificially and continually propped up. Get home prices back into reality compared to average incomes at least.
It's called a correction. The bigger the inflated error, the bigger the correction. It's course should be left alone imo.
I know in my business when I make stupid decisions and don't plan for lean times, spend too much for non essentials, etc., I pay the price and suffer the consequenses, no one else. Why should this industry get special treatment and bailout? I think it's bs.

[acatitude]

I'm not an expert on this home loan deal, but I don't think there will be as many happening as you think... There are some rules involved which will rule out most all.. Its just politicians trying to make themselves look good.
I only remember 2 rules and I think there are 4
1. you cannot have missed any payments before
2. your home has to be worth more then the loan.
3. I also think you have to qualify from the lending institute who has your
loan.
4. theres only 3 or 4 places agreeing to do this now, and they probably have sold off a lot of their loans
numbers 1 & 2 will rule out most anyways.
These are the rules I was told by someone in the industry who is doing foreclosures

[McIntyrelocal]

I respectfully disagree. Values are highly inflated (still). That is not healthy for anyone nor is artificially propping them up. I don't care if my home value falls as long as they all fall, which they will. It's all relative. Government having to cut back I don't see as a bad thing. They overspend every dollar they get their hands on anyway worse than any consumer with a home equity line ever could. At least consumers are limited by their home's inflated value as to what they borrow and spend. Government makes an overextended consumer look like a financial saint as they just spend into the stratosphere when their credit's exceeded (that one we do all pay for).
The only pain that will be felt is by the institutions that made stupid loans, those foolish enough to be in those industries while believing the bubble would never end and not making a plan for when that happened, those who took loans for more they could afford, and those who anchored their businesses around servicing and supporting all these artificially inflated home prices with no alternative plan to make money in the down cycle.
Let it crash. Maybe then a would be first time home buyer will actually be able to afford to buy a home. Right now they certainly cannot and never will if prices are artificially and continually propped up. Get home prices back into reality compared to average incomes at least.
It's called a correction. The bigger the inflated error, the bigger the correction. It's course should be left alone imo.
I know in my business when I make stupid decisions and don't plan for lean times, spend too much for non essentials, etc., I pay the price and suffer the consequenses, no one else. Why should this industry get special treatment and bailout? I think it's bs.
i agree with the responsability aspect of your statement but the rest means that just because you bought a house in the last 5-6 years you should pay for there mistakes. i bought mine 3 years ago and i can afford it and will be able to no matter what but if things went your way i would be so upside down i may as well give it back. I couldnt do anything about the market prices when i bought i was young and i had to buy where i did because that was where my buisness is, So i should be punished for that?

[burtandnancy2]

We haven't even seen the Feds plan yet and we're jumping to conclusions all over the place. I would rather bail out the "qualified" home buyers, than have our tax dollars bail out the S & L's and banks. Its not going to work for everyone, and mostly those who have already lost their homes and moved on. But if the new plan actually freezes the current interest rates for 5 years (or so) it should give many people a chance to re-organize (like a chapter 11). The last thing we need are thousands of vacant homes driving prices down and being vandalized by who ever. For once if our government does something for the people with little or no big tax hit, I'm all for it...

[McIntyrelocal]

We haven't even seen the Feds plan yet and we're jumping to conclusions all over the place. I would rather bail out the "qualified" home buyers, than have our tax dollars bail out the S & L's and banks. Its not going to work for everyone, and mostly those who have already lost their homes and moved on. But if the new plan actually freezes the current interest rates for 5 years (or so) it should give many people a chance to re-organize (like a chapter 11). The last thing we need are thousands of vacant homes driving prices down and being vandalized by who ever. For once if our government does something for the people with little or no big tax hit, I'm all for it...
i agree 100%

[ULTRA26 # 1]

I love how there is always one or more assclowns on here that blame "W"!! Yea, George went out and created this.....right!!!!
Look at the other parameters of the economy. Overall, not too bad shape. The press does more damage on a daily basis!!
You want to help? Go out and buy something!!
Like what Rob, more shit from China? :D

[Rexone]

i agree with the responsability aspect of your statement but the rest means that just because you bought a house in the last 5-6 years you should pay for there mistakes. i bought mine 3 years ago and i can afford it and will be able to no matter what but if things went your way i would be so upside down i may as well give it back. I couldnt do anything about the market prices when i bought i was young and i had to buy where i did because that was where my buisness is, So i should be punished for that?
If you can afford it I fail to see how you are being punished. :confused:
If "all" property values decline it would not matter what it was worth vs what you owe. If you sold the prop you buy would be proportionally cheaper too and you would come out fine. So it would not matter.
Being upside down is simply a function of buying at the wrong time (had to or not it does not change that). If you go out and buy a big screen TV for $2000 and the following week the mfg drops the price to $1500 due to competition, oh well, that's life, you suck it up and watch TV for $2000 instead of $1500. You can piss and moan all you want but doubtful you'll get anyone to cough up $500. It's simply capitalism at work. Supply and demand. The house prices hyperinflated because people were willing to pay and were able to get foolish loans. Now they are starting to return to normal. It's simply part of the cycle. If you buy low you realize a gain. If you buy high you realize a loss. No different that stocks or anything else other than it's a real big number usually compared to those (but not always). Bottom line is if you bought your house to "live in" rather than flip, and you can afford the payment, it doesn't matter. Values (real ones) will work their way back up over time. Just as in the stock market, wise investors with wise and stable stock choices (not a lot unlike real estate) hold onto stocks long term and ride out the peaks and valleys.
Of course if you bought with intention to let it inflate and flip it then that's just bad timing again not much unlike the stock market or any other investment that has a risk element.

[ULTRA26 # 1]

If you can afford it I fail to see how you are being punished. :confused:
If "all" property values decline it would not matter what it was worth vs what you owe. If you sold the prop you buy would be proportionally cheaper too and you would come out fine. So it would not matter.
Being upside down is simply a function of buying at the wrong time (had to or not it does not change that). If you go out and buy a big screen TV for $2000 and the following week the mfg drops the price to $1500 due to competition, oh well, that's life, you suck it up and watch TV for $2000 instead of $1500. You can piss and moan all you want but doubtful you'll get anyone to cough up $500. It's simply capitalism at work. Supply and demand. The house prices hyperinflated because people were willing to pay and were able to get foolish loans. Now they are starting to return to normal. It's simply part of the cycle. If you buy low you realize a gain. If you buy high you realize a loss. No different that stocks or anything else other than it's a real big number usually compared to those (but not always). Bottom line is if you bought your house to "live in" rather than flip, and you can afford the payment, it doesn't matter. Values (real ones) will work their way back up over time. Just as in the stock market, wise investors with wise and stable stock choices (not a lot unlike real estate) hold onto stocks long term and ride out the peaks and valleys.
Of course if you bought with intention to let it inflate and flip it then that's just bad timing again not much unlike the stock market or any other investment that has a risk element.
Mike,
Wouldn't the amount of correction make a difference. For someone who bought 5 years ago, a correction to values 10 years ago, would cause them to be upside down, and unable to sell. Is this what you are saying should happen? If so I don't agree

[McIntyrelocal]

If you can afford it I fail to see how you are being punished. :confused:
If "all" property values decline it would not matter what it was worth vs what you owe. If you sold the prop you buy would be proportionally cheaper too and you would come out fine. So it would not matter.
Being upside down is simply a function of buying at the wrong time (had to or not it does not change that). If you go out and buy a big screen TV for $2000 and the following week the mfg drops the price to $1500 due to competition, oh well, that's life, you suck it up and watch TV for $2000 instead of $1500. You can piss and moan all you want but doubtful you'll get anyone to cough up $500. It's simply capitalism at work. Supply and demand. The house prices hyperinflated because people were willing to pay and were able to get foolish loans. Now they are starting to return to normal. It's simply part of the cycle. If you buy low you realize a gain. If you buy high you realize a loss. No different that stocks or anything else other than it's a real big number usually compared to those (but not always). Bottom line is if you bought your house to "live in" rather than flip, and you can afford the payment, it doesn't matter. Values (real ones) will work their way back up over time. Just as in the stock market, wise investors with wise and stable stock choices (not a lot unlike real estate) hold onto stocks long term and ride out the peaks and valleys.
Of course if you bought with intention to let it inflate and flip it then that's just bad timing again not much unlike the stock market or any other investment that has a risk element.
I bought my house to live in it hopefullly for ever and your right to a degree in my opinion but that doesnt mean that we should just let it drop if its not necessary or i should say (possibly) and i use that turm litely because even comercial property went for those high prices it wasnt just the housing market and i dont think property values (inflated as they are) are that far off with in reason in most areas fortunatly im in a desierable area(spelling).But i still dont think we should just pull out and let it take a crap.But thats just my opinion and of course you are entitled to yours.

[mbrown2]

Folks with their own buisness, or those who live moderately working for someone else and think this is someone else's problem and it is only a home value problem need to look back at the depression and the misguided steps the government did not take to bring us out of that.....ie: which is likely to happen if monetary policy does not act accordingly now..
Spring forward to the mid 30's and the "New Deal" after the Crash, Tariff Act, and lack of Monetary control to prevent the banking collapse (more the 9000 banks collapsed in that decade alone)... From the DEAL look at back at those business tax rate increases, individual rate tax increases (79% in some cases)....it caused investment in the market to stop and go away and caused an extension of the depression into 1938...with peak unemployment peaks of 25% during the decade..that is 1 in 4 on this board...
So its gone beyond the guy getting a handout for his adjustable rate loan....this is the government trying to keep the market and banking system from significance collapse...Lack of Monetary Controls lost 1/3 of market capital between 1930 and 1931....the Crash of 29 just put us in a depression.....after that if you let the money go away and banks go under then the vicious cycle starts...

[3 daytona`s]

Couldn't have said it better myself Hoss. IF this applies to any of the 'big ballers" out here then I say Phuck you. I didn't see any of you opening your Havazoo homes or loaning out those high-dollar yachts you're cruising the channel in to any of the others that chose to keep their spending habits under control and now you want those same peeps to feel sorry for you and bail you out.....NOT!!
If any of you over-extended peeps that have to "liquidate some assets" to keep a roof over your heads need quick cash call me and I'll give you about 60 cents on the dollar for your mansion or maybe 35=>40 cents on the dollar for your BDC oh sorry bout that I meant your DCB tubs.
Hope you learned your lesson but paybacks a bitch.
Rio
All was cool,lifted golf carts were not good enough,had to upgrade to a Rhino,then wheels,stereo etc,etc.Now when the going gets tough and I feel will get much worse as usual run to the Fed. to save. This is the kind of people out society has raised,food stamps,unemployment,welfare on and on:idea:

[Rexone]

Mike,
Wouldn't the amount of correction make a difference. For someone who bought 5 years ago, a correction to values 10 years ago, would cause them to be upside down, and unable to sell. Is this what you are saying should happen? If so I don't agree
First I think its unrealistic to think it will correct to 10 years ago values.
What I am trying to get across is that if values decrease, all values decrease, and while being unable to sell at value owed would have little to do with it.
Take a 500K value home (at peak) and let's say a guy owes 450K (90%). Lets say the home plunges to 400K in value (20%). Now the guy is upside down on the loan for 50K.
So can he sell for the 450K he has a loan for? Of course not. He's 50K down.
But... if he could afford the payment before the price reduced he can still afford the payment. Assuming he wants to stay and live in the home.
If he wants to sell he certainly can. Just at 400K (realizing a 50K loss on this home).
However whatever home he buys (higher or lower value) has now also been reduced by that same 20%. So it is all relative. He buys another home, higher or lower, depending on what he can afford and realizes the gain there that he lost on the one he sold. That's the equalizer and the part that many do not see.
Now if he bought that 500K home and really was on the edge on affording the payment, that was a poor decision on his part as he will now not be able to afford to buy something else and if he can't pay the payment he'll lose the house. That is called living within your means (or not).
Now if he bought the home to inflate and flip and not live in for any length of time, he's just in deep shit and made a bad investment. In my opinion its bad policy to play your home as an investment. Do that with rental properties or other stuff besides real estate.
Several different scenarios there.

[McIntyrelocal]

First I think its unrealistic to think it will correct to 10 years ago values.
What I am trying to get across is that if values decrease, all values decrease, and while being unable to sell at value owed would have little to do with it.
Take a 500K value home (at peak) and let's say a guy owes 450K (90%). Lets say the home plunges to 400K in value (20%). Now the guy is upside down on the loan for 50K.
So can he sell for the 450K he has a loan for? Of course not. He's 50K down.
But... if he could afford the payment before the price reduced he can still afford the payment. Assuming he wants to stay and live in the home.
If he wants to sell he certainly can. Just at 400K (realizing a 50K loss on this home).
However whatever home he buys (higher or lower value) has now also been reduced by that same 20%. So it is all relative. He buys another home, higher or lower, depending on what he can afford and realizes the gain there that he lost on the one he sold. That's the equalizer and the part that many do not see.
Now if he bought that 500K home and really was on the edge on affording the payment, that was a poor decision on his part as he will now not be able to afford to buy something else and if he can't pay the payment he'll lose the house. That is called living within your means (or not).
Now if he bought the home to inflate and flip and not live in for any length of time, he's just in deep shit and made a bad investment. In my opinion its bad policy to play your home as an investment. Do that with rental properties or other stuff besides real estate.
Several different scenarios there.
i completely understand and have from your first post and i agree people should not buy anything above there means but i do think it was wrong what the lenders were getting people into,and i guess out of sympathy for the people not understanding totally or the people that took a chance (because owning a home is something that is tough to acomplish)do deserve a chance to figure something out if the gov. can hold things where they are now for a little while that might help.

[sanger rat]

Clinton Says Wall Street Encouraged Reckless Lending. http://news.yahoo.com/s/bloomberg/20071205/pl_bloomberg/a1r4hnfrhcni

[OC28HEAT]

I respectfully disagree. Values are highly inflated (still). That is not healthy for anyone nor is artificially propping them up. I don't care if my home value falls as long as they all fall, which they will. It's all relative. Government having to cut back I don't see as a bad thing. They overspend every dollar they get their hands on anyway worse than any consumer with a home equity line ever could. At least consumers are limited by their home's inflated value as to what they borrow and spend. Government makes an overextended consumer look like a financial saint as they just spend into the stratosphere when their credit's exceeded (that one we do all pay for).
The only pain that will be felt is by the institutions that made stupid loans, those foolish enough to be in those industries while believing the bubble would never end and not making a plan for when that happened, those who took loans for more they could afford, and those who anchored their businesses around servicing and supporting all these artificially inflated home prices with no alternative plan to make money in the down cycle.
Let it crash. Maybe then a would be first time home buyer will actually be able to afford to buy a home. Right now they certainly cannot and never will if prices are artificially and continually propped up. Get home prices back into reality compared to average incomes at least.
It's called a correction. The bigger the inflated error, the bigger the correction. It's course should be left alone imo.
I know in my business when I make stupid decisions and don't plan for lean times, spend too much for non essentials, etc., I pay the price and suffer the consequenses, no one else. Why should this industry get special treatment and bailout? I think it's bs.
Well written,
For the most part most of the borrowers will not have a clue that this is a temporary fix and try to climb out and better themselves they will continue to spend. I have seen numerous studies that say it takes less that three weeks for someone to start spending a raise when you receive it from your employer
I see the inflated values everyday. I talk to the borrowers every day and they say that the bad lender took advantage of them when they wanted the taste of the good life.
the values need to come down and govenment needs to collect less taxes and then the govenment can spend less taxes.
Pretty simple

[OC28HEAT]

First I think its unrealistic to think it will correct to 10 years ago values.
What I am trying to get across is that if values decrease, all values decrease, and while being unable to sell at value owed would have little to do with it.
Take a 500K value home (at peak) and let's say a guy owes 450K (90%). Lets say the home plunges to 400K in value (20%). Now the guy is upside down on the loan for 50K.
So can he sell for the 450K he has a loan for? Of course not. He's 50K down.
But... if he could afford the payment before the price reduced he can still afford the payment. Assuming he wants to stay and live in the home.
If he wants to sell he certainly can. Just at 400K (realizing a 50K loss on this home).
However whatever home he buys (higher or lower value) has now also been reduced by that same 20%. So it is all relative. He buys another home, higher or lower, depending on what he can afford and realizes the gain there that he lost on the one he sold. That's the equalizer and the part that many do not see.
Now if he bought that 500K home and really was on the edge on affording the payment, that was a poor decision on his part as he will now not be able to afford to buy something else and if he can't pay the payment he'll lose the house. That is called living within your means (or not).
Now if he bought the home to inflate and flip and not live in for any length of time, he's just in deep shit and made a bad investment. In my opinion its bad policy to play your home as an investment. Do that with rental properties or other stuff besides real estate.
Several different scenarios there.
when this is all said and done most of the country will have seen a 35-40 percent correction in prices

[OC28HEAT]

It has nothing to do with the local banks. where do you think the lending companys get there money if we just let all the houses go into forclosure then the investers are going to get that much less money back. the less money they get back the less money they can invest somewhere else if at all.
if it keeps getting worse they wont want to put money out anywhere. thats how we get into recessions. The money that supports the economy doesnt come from the government or tax payers it comes from investers and people that need to invest because they have to much money and need to put it somwhere so they dont get taxed on it or even for a loss to right it off.
sorry to say but the investors are going to make money no matter what they have bets on both sides it is called hedge fund for a reason that is why the dow is still not plumeting

[Faceaz]

If it's not taxpayer money, I'm all for it. It's better then a bunch of homes in your neighborhood going into foreclosure and driving home prices down further.
It's already happening. We have our place on the market in Huntington & are thinking about pulling it & renting it out. Last year @ this time we could have gotten around 675k & we have it on the market for 639k. The problem is, in the past 2 weeks there's been 2 forclosure short sales for under 550k in our immediate area. We had a couple of offers, but only from poachers hoping that were in trouble & willing to take anything. One of the offers was over 10% less. Luckily we aren't in trouble & won't be hurt if we need to rent it.

[boatsntoys]

WE all loved the price increases that the A-hole lyeing buyers made our houses evaluate to. If it had not been for all those money grubbing banks, full of s--t ballers, manipulating loan guys, people living beyond their means, etc. etc. We never would have had the price increases we had.. We ALL loved them then. They were the reason we all made a bunch of money or equity. Now we have to give a little back.
Did anyone here turn away a buyer because you wanted to protect the real estate and banking industry and you thought that it was unwise for him to get a 100% ARM loan to buy your house for top dollar ? Or did you grab the money and run ?
I hate admit it, but we were all a part of the problem.

[Faceaz]

This is the most assinine thing I think I've read.
It's simple...the lenders are in biz to make a buck.....they have, you want....everything is explained in great detail so even a moron can understand.->the gov't forces lenders to make that perfectly clear->how many loan docs did you have to sign to buy your house? I have no sympathy for the peeps that TOOK A CHANCE as they could have waited until they were in a better financial position to buy instead of not using their heads and getting into a loan by the skin of their ass or taking a squirrelly type loan. THEY wanted so bad that they were willing to gamble..... oh well, that's life!!
If the gov't would stay out of the biz of artificially propping up the economy we'd be much better off. As it is we have been, are, and will be, living in an economy that can be manipulated by the whims of the gov't instead of a market of supply and demand. The value of whatever will find it's own level by itself.
THE PEOPLE THAT TOOK A CHANCE DO DESERVE A CHANCE TO FIGURE SOMETHING OUT IF THE GOV. CAN HOLD THINGS WHERE THEY ARE NOW FOR A LITTLE WHILE THAT MIGHT HELP.
BULLSH*T
Why do they deserve a chance any more than the rest of us???
As for the comparison to the stock market, The only difference is that people that invest in stocks usually do so with money that is above and beyond what they need to live on. If they lose they'll still have a roof over their heads. They hang for the long term and it'll come back.
I don't really understand all of the ins and outs of the stock market(never really interested me) so I stay away. I'll fool around with real estate but it's never to turn something overnight. I don't use my home as collateral and I keep twice as much as I owe in money market so I'm very liquid. I am scared of being poor. It just doesn't sound like fun and I'll be damned if I ever have to be afraid to answer the phone or the door.
So, I sold some property in Palm Springs at the top of the trend. I'm carrying some paper on the prop and have a nice little bit of pocket money coming in for a good while. If I was a nice guy, according to a few of you, I'd just roll over and take a hit for either a part of the interest or maybe I should go back and revalue the prop a lil lower. NOT!! I sold higher than what I thought it was worth (maybe they're smarter than I ) and I hit them with a substantial interest rate. They wanted, They were made aware of the consequences if they defaulted They bought and as long as they hold up their end of the bargain then I abide by mine. If they default I take it back and it's nothing personal it's just business. If they turn it (not til it's paid in full) for 5 times what they paid -great. It's called LIFE. Sometimes you get the bear and sometimes the bear gets you.
Rio
ps...Hoss...can't you sorta just leave out the race crap? It gets old after a while. JMHO
I don't like the goverment getting involved either, but think they need to. I know a couple of mortgage brokers that say there are many people in default on their loans & haven't made payments in 6 months. The lenders are afraid to forclose on the properties because it will further kill the market. If the housing market stops with brokers & lenders going out of business, it will have a serious effect on the economy. Unfortunately I think the government needs to be a bit proactive. It's help now or help later, if it gets to the point of seriously affecting the economy the gov't will need to get involved anyway.

[C-2]

Like I said – everybody hand their hands in the cookie jar.
Take the boating industry for example. Do you think they would have inflated their prices so quickly without all that equity money floating around? I doubt it.
Those 28’ deck boats that are common as Honda’s at Havasu - $175K-$200K.
Only 7-8 years ago, weren’t they in the $75-$100K range?
Yup, the money was there so they jacked the prices.
Talk about over valued. How about it Rex - you don't mince words on RE - how about on boats?:D

[bigq]

Folks with their own buisness, or those who live moderately working for someone else and think this is someone else's problem and it is only a home value problem need to look back at the depression and the misguided steps the government did not take to bring us out of that.....ie: which is likely to happen if monetary policy does not act accordingly now..
Spring forward to the mid 30's and the "New Deal" after the Crash, Tariff Act, and lack of Monetary control to prevent the banking collapse (more the 9000 banks collapsed in that decade alone)... From the DEAL look at back at those business tax rate increases, individual rate tax increases (79% in some cases)....it caused investment in the market to stop and go away and caused an extension of the depression into 1938...with peak unemployment peaks of 25% during the decade..that is 1 in 4 on this board...
So its gone beyond the guy getting a handout for his adjustable rate loan....this is the government trying to keep the market and banking system from significance collapse...Lack of Monetary Controls lost 1/3 of market capital between 1930 and 1931....the Crash of 29 just put us in a depression.....after that if you let the money go away and banks go under then the vicious cycle starts...
It is beyond just a mortgage problem now a problem that the Fed created ...again.:rolleyes:

[C-2]

I hate admit it, but we were all a part of the problem.
Yes, the first step to recovery.

[boatsntoys]

We All spent the money. They got the bad credit and put into the street.
WE sold them our overvalued homes. Then after we get the cash we call them stupid A-holes for buying them.

[Rexone]

Yup, the money was there so they jacked the prices.
Talk about over valued. How about it Rex - you don't mince words on RE - how about on boats?:D
I think there have been a lot of boats (certainly not all) that were moved at prices a lot higher than increased costs of building would have predicated. Certainly costs have gone up as well, in some cases substantially. But many sell prices have far exceeded the increased cost proportionally. Why? Because they could. Look at Mercury's prices as a showcase example. Engines selling for more than many peoples average annual income.... pleeeeze. But people are paying it.
So the cycle continues until they are no longer willing or able, then the prices and / or volumes drop. Not much different than housing. Boat loans were easy to get based on home equity or direct out of home equity lines of credit. And it's not limited to boats. You can take it across the spectrum, sand toys, high buck truck mods, offroad, trailers, toterhomes, you name it. Times were good and the manufacturers of all types of vehicles were taking every advantage of that. The perception was that people were paying it so the vehicles must be worth it right?. Well I guess that's something everyone has to decide for themselves. Personally I won't buy stuff that's overpriced and I help keep the pre-owned market going. :D

[C-2]

I think there have been a lot of boats (certainly not all) that were moved at prices a lot higher than increased costs of building would have predicated. Certainly costs have gone up as well, in some cases substantially. But many sell prices have far exceeded the increased cost proportionally. Why? Because they could. Look at Mercury's prices as a showcase example. Engines selling for more than many peoples average annual income.... pleeeeze. But people are paying it.
So the cycle continues until they are no longer willing or able, then the prices and / or volumes drop. Not much different than housing. Boat loans were easy to get based on home equity or direct out of home equity lines of credit. And it's not limited to boats. You can take it across the spectrum, sand toys, high buck truck mods, offroad, trailers, toterhomes, you name it. Times were good and the manufacturers of all types of vehicles were taking every advantage of that. The perception was that people were paying it so the vehicles must be worth it right?. Well I guess that's something everyone has to decide for themselves. Personally I won't buy stuff that's overpriced and I help keep the pre-owned market going. :D
Agreed.
Sadly, I think they too have their blinders on, but have passed the point of no return.
I asked the question a while back about financing, and was told it's still really easy.
I don't get it. They're tightening the noose on a $400K home loan, but a $200K boat - sure, no problem. I guess we'll find out in a few months. I'm sure many deals will be inked, but few delivered.
I too cannot justify the price. At last years show they had a 29' Fountain with a 525 for $99K - which seemed like a great deal. Wifey was all over it, maybe soon :)

[77charger]

Only 2 people to blame the lender and the borrower.Lender knows the borrower really cant afford the loan they are applying for but manipulates it plus tells the future big baller about this line of credit deal sign now live big then give it up later.
Then the borrower says yeah sounds good where do i sign.Then sign up on hot boat to find out the latest greatest boat.The other ballers here say buy this one use it for one year then sell it for more than you paid for buy another bigger boat,dont forget the lifted golfcart while you are at it too you will need that to cruise around the neighborhood.
Now the money aint around to spend,home prices are tanking,toys are for sale for a long time and dont sell as hot as they did only a year or 2 ago,The equity line of credit is dried up,and so on.And now they are waitin for a bailout from the feds gimme a break only lesson the feds should give in economics and money management 101!!
The ones who didnt spend as much to keep up with the big dogs and invested or saved while everyone was spending are going to be in for some good deals cause IMO the economy is still going to bottoom out if they plan on buying.I myself cant afford to buy or upgrade but just happy with the older simple stuff i have.cause i still have about 25 years of fixed interest mortgage to pay.Just glad i bought in 2000 before this overated home prices came into play.
:D :) :rolleyes:

[cxr133]

We All spent the money. They got the bad credit and put into the street.
WE sold them our overvalued homes. Then after we get the cash we call them stupid A-holes for buying them.
I have a question.. lots of people sold houses at inflated prices.. made shitloads of cash.. then bought bigger houses at 100% financing, 0 down
My question is where did all this cash go? is it under matressess or sitting in the bank?

[cdog]

Judging by how late they are to the party I still don't think they will help much by this so called intervention. I see more focus by the talking heads and government on what already happened and who’s to blame instead of a focus on how to get out of it. Temp rate locks will only delay the inevitable. Band aid on a bullet wound.
Look how much better the rates have gotten on conforming in just the last month. They went from 6.5 to 5.9%. Problem is nothing in socal is conforming and most who need to refi this late in the game are upside down.
There needs to be some bait to bring qualified buyers back in to reduce inventory. Like a 5% 30 yr. fixed for anyone with 20% down and 700 fico. Reward the responsible not the stupid.:idea:

[scooooter7]

There needs to be some bait to bring qualified buyers back in to reduce inventory. Like a 5% 30 yr. fixed for anyone with 20% down and 700 fico. Reward the responsible not the stupid.:idea:
Even if that happened, I think buyers would still be afraid their new bought home's value would just continue to drop. People won't start buying, except those that have to, until values level off. And that won't happen for another 18 to 24 months (according to the RE agents in the area).

[cdog]

Even if that happened, I think buyers would still be afraid their new bought home's value would just continue to drop. People won't start buying, except those that have to, until values level off. And that won't happen for another 18 to 24 months (according to the RE agents in the area).
Yes and no. Home's that are priced at market are down about 12-15% off peak. Why wait to save 50k when you'll miss out on a killer rate and spend another 25k renting. Sooner or later it's a wash. Now if only sellers would wake up and get realistic.

[McIntyrelocal]

This is the most assinine thing I think I've read.
It's simple...the lenders are in biz to make a buck.....they have, you want....everything is explained in great detail so even a moron can understand.->the gov't forces lenders to make that perfectly clear->how many loan docs did you have to sign to buy your house? I have no sympathy for the peeps that TOOK A CHANCE as they could have waited until they were in a better financial position to buy instead of not using their heads and getting into a loan by the skin of their ass or taking a squirrelly type loan. THEY wanted so bad that they were willing to gamble..... oh well, that's life!!
If the gov't would stay out of the biz of artificially propping up the economy we'd be much better off. As it is we have been, are, and will be, living in an economy that can be manipulated by the whims of the gov't instead of a market of supply and demand. The value of whatever will find it's own level by itself.
THE PEOPLE THAT TOOK A CHANCE DO DESERVE A CHANCE TO FIGURE SOMETHING OUT IF THE GOV. CAN HOLD THINGS WHERE THEY ARE NOW FOR A LITTLE WHILE THAT MIGHT HELP.
BULLSH*T
Why do they deserve a chance any more than the rest of us???
As for the comparison to the stock market, The only difference is that people that invest in stocks usually do so with money that is above and beyond what they need to live on. If they lose they'll still have a roof over their heads. They hang for the long term and it'll come back.
I don't really understand all of the ins and outs of the stock market(never really interested me) so I stay away. I'll fool around with real estate but it's never to turn something overnight. I don't use my home as collateral and I keep twice as much as I owe in money market so I'm very liquid. I am scared of being poor. It just doesn't sound like fun and I'll be damned if I ever have to be afraid to answer the phone or the door.
So, I sold some property in Palm Springs at the top of the trend. I'm carrying some paper on the prop and have a nice little bit of pocket money coming in for a good while. If I was a nice guy, according to a few of you, I'd just roll over and take a hit for either a part of the interest or maybe I should go back and revalue the prop a lil lower. NOT!! I sold higher than what I thought it was worth (maybe they're smarter than I ) and I hit them with a substantial interest rate. They wanted, They were made aware of the consequences if they defaulted They bought and as long as they hold up their end of the bargain then I abide by mine. If they default I take it back and it's nothing personal it's just business. If they turn it (not til it's paid in full) for 5 times what they paid -great. It's called LIFE. Sometimes you get the bear and sometimes the bear gets you.
Rio
ps...Hoss...can't you sorta just leave out the race crap? It gets old after a while. JMHO
first off im glad you feel that way im a moron with assinine comments whatever. im a 24 year old with a nice house and some investment prop and a river place and have nothing mortgaged against it wheather you believe me or not.im glad the gov. steps in (sometimes) because like you said the lenders have to disclose everything but if they didnt dont you think they would get away with murder with most people.and as far as the lender being able to make a buc i support that thats why i want them to regulate the rate for a while instead of the lenders driving people out of there houses cause it will happen fast and then there will be empty houses with no revenue for the lenders and trust me if this happens im gonna jump on the property but if somebody could have a slight chance of avioding that im all for it. so i guess that makes me an idiot sorry for wanting to support my comunity and not watch it become a slum because of all the vacant houses.

[cdog]

http://money.cnn.com/2007/12/03/real_estate/investors_obstacle_to_mortgage_plan/index.htm?postversion=2007120513

[bigq]

Judging by how late they are to the party I still don't think they will help much by this so called intervention. I see more focus by the talking heads and government on what already happened and who’s to blame instead of a focus on how to get out of it. Temp rate locks will only delay the inevitable. Band aid on a bullet wound.
Look how much better the rates have gotten on conforming in just the last month. They went from 6.5 to 5.9%. Problem is nothing in socal is conforming and most who need to refi this late in the game are upside down.
There needs to be some bait to bring qualified buyers back in to reduce inventory. Like a 5% 30 yr. fixed for anyone with 20% down and 700 fico. Reward the responsible not the stupid.:idea:
I agree to a point. The problem that seems to be overlooked is the price of the house is to much for the average person to buy, first time buyers, middle income people. Look at the median income in CA of about 60k and what it takes to make mortgage, taxes and insurance. It's still cheaper to rent then own over the life of a mortgage.

[McIntyrelocal]

I agree to a point. The problem that seems to be overlooked is the price of the house is to much for the average person to buy, first time buyers, middle income people. Look at the average income and what it takes to make mortgage, taxes and insurance. It's still cheaper to rent then own over the life of a mortgage.
i agree just my property taxes are around 8,000 for the year,there is only a couple of timesi think the gov. should step in i do think they have way to much controll when they shouldnt have any like everyone else.But i do think this mortgage thing is one where they should step in slot of people act like they want to see the economy take a dive i dont think tax money should be involved what so ever but they need to regulate what the lenders are charging to keep everything afloat and if it doesnt work then everyone can blame me.

[Faceaz]

What happens when Joe Blow files BK & sticks the lender with a 100k in losses, now multiply that by 100,000 Joe Blows. Now the lenders are in default on their loans to the gov't? I'm not sure if this is how it works - just hypothetically speaking.

[2Driver]

What happens when Joe Blow files BK & sticks the lender with a 100k in losses, now multiply that by 100,000 Joe Blows. Now the lenders are in default on their loans to the gov't? I'm not sure if this is how it works - just hypothetically speaking.
Not to be MR Gloom here but it's going to happen anyway. The government is just adding beauracrcy to it. The people that may qualify will be a very very small part of the over all picture. That’s been proven.
There will not be bail out to investor owned properties, you have to prove you live in the house and your ARM is to adjust in 2 years and prove you will go into foreclosure if it does adjust. Man, I'd like to see that pile of paperwork you have to submit to prove that. After it’s all said and done the few that get saved are on the edge anyway so a good percentage of them will likley go into foreclosure anyway. Rest assure this is not going to stop the flood of problems that will come from the 2 million new ARM's coming due next year. But remember, the real estate industry told us 18 months ago the worst was behind us. :D

[C-2]

What happens when Joe Blow files BK & sticks the lender with a 100k in losses, now multiply that by 100,000 Joe Blows. Now the lenders are in default on their loans to the gov't? I'm not sure if this is how it works - just hypothetically speaking.
That’s not how it works, mortgage debt is not discharged thru a BK. :)
People file BK, but it mainly just stalls the process. The BK laws were reformed several years ago and most of the time people are forced to repay their unsecured debts over the course of 5 years. But yes, filings are soaring and they are trying to modify the BK laws to allow modifications of their home loans. BK is no longer an escape route for most people (which they sadly find out after it's too late).
------------------
I think what you are referring to is people walking away from their mortgages.
And in that instance, it depends on how the loan was cut as to whether or not the person will walk away without owing anything further, or if they can get nailed with the loan balance.
In Cali, most of the time a lender will not sue in court to foreclose on a trust deed; rather they use a “power of sale” clause which allows a third party “trustee” to sell the property at auction, a “trustee’s sale.”
If a person has only one loan, and the proceeds of the loan were used to purchase the property, it’s called a “purchase money” trust deed. In that instance and if the property is foreclosed upon at a trustee’s sale, the person is not responsible for any deficiency balance. The foreclosure also wipes out any junior loans (seconds/thirds).
An 80/20, or 100% financed loan also falls into the above category if the money was used to purchase the property. In that instance and despite the fact there is a second, both are still considered purchase money loans and enjoy the exemption from a deficiency balance.
Here’s where it goes screwy for somebody walking away.
If you refinanced your first loan, or took a HELOC or second or third, you do not enjoy the same exemptions
On a refinance or cash out loan, if a lender so elects, they could choose to use the court system to foreclose, at which time they would be able to get a judgment against the borrower for any deficiency balance. However, the costs and turnaround are too great, and there are some other pitfalls, so they rarely choose that option.
Yes, the foreclosure sale on a first wipes out the “security interest” on a HELOC/or second, or any other loan. HOWEVER, it does not wipe out the debt. It simply turns the mortgage owner into an unsecured creditor, much the same as a credit card company. The mortgage holder would still have to sue the borrower in court to obtain a judgment though; the loss is not automatically attached to them.
Few people realize the above and think they can walk away from their HELOC’s and seconds, which is not correct.

[totenhosen]

Here’s where it goes screwy for somebody walking away.
If you refinanced your first loan, or took a HELOC or second or third, you do not enjoy the same exemptions
On a refinance or cash out loan, if a lender so elects, they could choose to use the court system to foreclose, at which time they would be able to get a judgment against the borrower for any deficiency balance. However, the costs and turnaround are too great, and there are some other pitfalls, so they rarely choose that option.
Yes, the foreclosure sale on a first wipes out the “security interest” on a HELOC/or second, or any other loan. HOWEVER, it does not wipe out the debt. It simply turns the mortgage owner into an unsecured creditor, much the same as a credit card company. The mortgage holder would still have to sue the borrower in court to obtain a judgment though; the loss is not automatically attached to them.
Few people realize the above and think they can walk away from their HELOC’s and seconds, which is not correct.
Now being that CA is a single action state if the 2nd T/D holder accepts any funds from the sale of the proeprty at foreclosure do they than waive their rights to colelct the remaining debt?

[McIntyrelocal]

Cdog has the right idea.
"There needs to be some bait to bring qualified buyers back in to reduce inventory. Like a 5% 30 yr. fixed for anyone with 20% down and 700 fico. Reward the responsible not the stupid."
Rex spoke of the correction factor. The market will level where it should have been in the first place. When ever the gov't steps in it creates a false economy and the only ones that benefit are the ones that are in trouble in the first place.
McIntyrelocal, you're too young to remember back in the early eighties when interest rates were sky high. It's a cycle and it'll come and go again in your lifetime. If there is 1 tax dollar involved then then it doesn't benefit anyone except for the politicians and the ones looking to get something for nothing. Actually, in the grand scheme of things taking the hit now would be better for the majority than trying to "fix" the broken.
Follow me. Joe Blow loses his house as he can't make the $3000 a month payments. Rexie comes along and picks it up for a much more realistic valuation than what Joe Blow paid for it. Now Rexie can turn around and rent it out for let's say $2000 a month which Joe Blow can afford. So JB still has a roof over his head, less pressure making smaller monthly payments, etc. There might be a few other homes in the same tract that wind up the same way so that will bring the comps in the area down . NO BIG DEAL. In fact, it's a good thing as the PROPERTY TAX will be lowered. The only clowns that need worry are the ones that shouldn't have been buying there in the first place cuz they were way over extended. The Blows will just have to be content to be renters for a while longer until they can make some better choices. The value of the homes in that area will come back up in value so the locals will see a positive return on their home and Rexie will see a positive return on his investment.
You won't be seeing all of these places vacant. You'll just see a redistribution of the property from a bunch of people that were living a pipe dream to a bunch of people that make sound business and personal responsibility decisions. The people that were living within their means won't be effected one lil bit by this downturn in the economy. Basically, it'll just weed out the posers.
Rio
i understand and apriciate what you guys are saying like i said in one of my earlier posts i know its not going to effect me or everyone else that can afford what they have.But like some of you guys are say not everryone is going to qualify for the new perposal anyway but why not give the ones a chance to save themselves if at all possible wheather property values drop or not the may still be able to save there homes with a little more time.Like you guys are saying its not gonna last anyway and i agree and i do understand this market goes in cycles these values are going to go down and they will come back up again.Trust me i would like to capitalize on lowered values im in the perfect time in my life to buckle down and get some rentals.
I do things for the long turm i never look for the quick buc i dont believe in it unless your really lucky i know a few guys that made alot of money flipping these houses when it was doable but they were investers and could afford the gamble that wasnt for the long turm.

[justfloatn]

Wow alot to catch up on. I only skimmed through this, so I may have missed some of this being covered.
Here is a new scam someone in the business told me about yesterday.
It starts with a guy on my block; last one to move in and paid waaayyy tooo muuuccchh!!; over double what I paid. Loan comes up; tries to sell with no luck. He does a refi with the bank to a fixed and is struggling to get buy. Last week a sign pops up and he's selling again. My friend across the street tells me he's just bought a new house in Rocklin.:eek: I'm like WTF he was loosing everything three months ago:confused:
So I mention this at lunch yesterday to another friend in the loan business. He just smiles and tells me they are buying a new house at a lower price while the credit is good and under the premis the current house is to be sold.
We all know that's not going to happen. The lender is turning a blind eye to process a loan and keep from going under. They get the loan and move into the new house. They stop payments on the old house and tell the bank, tuff shiot I can't afford both.:jawdrop: :mad:
Now to me this is BS. Oh too bad, you owe more than your house is worth. Cry me a river..I purchased my first home in a declining economy in the early 90's. I lived upside down in equity for seven years. Then wall street, NOT W BUSH, comes up with this idea how to turn junk grade paper into B++ or A paper. They do this based upon pooling junk paper together and selling investors on the idea that not all of the people in the pool can go broke at the same time. Wall Street buys in and cheap loans to unqualified borrowers start flying out to people that cannot afford them. Does the President of our country control the stock market and investors? Hell No. Read the paper once in a while for fuks sake. It's a lot more complicated than that, but there is the ***boat version. I am not supporting W or any other politician, they are all P.O.S. Just putting out some FA..
O shot; I just pulled a Jordy:D

[McIntyrelocal]

Now being that CA is a single action state if the 2nd T/D holder accepts any funds from the sale of the proeprty at foreclosure do they than waive their rights to colelct the remaining debt?
they would have to give whatever they got back and it would be divided up between the them and the other leinholders its called preferential payment
that happened to us we did a job for nextel took forever to pay and finally
they gave us a percentage of what they owed us then they filed bk chapter11 reorganization then a company called us saying hey that 40,000 you guys got you have to give that to us we will put it into an escrow account and it will be divided up between you guys and everyone else that was owed on the job.no its not fair and it sucks

[Rvr Swpr]

Geez, there's no handouts. The administration is simply trying to coordinate the lenders to reduce the crazy number of foreclosures. The idea is the teaser rate, or a similar rate will be extended for a few extra years. Hopefully the market can recover pricing and then they can sell or refi at that time.
It will be cheaper for the banks in the long run, which should keep us from having to pay higher fees to make up their losses. Its a good thing for the economy. It will keep YOUR home's value from dropping further.
I agree it isn't quite fair for these borrowers to catch a break due to their own poor choices, but the hard lesson will be painful for all of us if there isn't something done.
Values drop, property taxes drop, and suddenly your local government has to cut back cuz they're overbudget... keeping home values from dropping will benefit everyone.
That about says it all.Sounds like you have been thru a few Real Estate cycles.

[C-2]

Now being that CA is a single action state if the 2nd T/D holder accepts any funds from the sale of the proeprty at foreclosure do they than waive their rights to colelct the remaining debt?
I don’t understand the question.
I wonder of OCHEAT 28 might know the answer?
Are you talking about foreclosing on the first, and any remaining money being applied to the second? If so, I don’t think it works that way. The second would no longer have a security interest, and the borrower would be entitled to surplus funds if the amount of the sale on the first exceeded the outstanding balance plus costs and fees.
Since the second’s security interest was wiped, they would have no option except to sue to obtain a deficiency judgment. I don’t see how that would be a waiver of their legal remedies to recover the remaining loan balance on their second.
Or you taking about foreclosing on the second, and whether or not the one-action rule applies to foreclosig on the second?

[Ion]

There isn't supposed to be any taxpayer money involved. Its a better deal for the banks to show some leniency and extend the teaser rate out a couple of years, and maybe make up the difference at the end of loan....instead of foreclosing on thousands more homes and driving the US economy and possibly the world's into the shitter.
According to White House deputy press secretary, Tony Fratto, Mandelon is correct. Here's what Fratto said:
"it (the plan) would help "potentially a little more than a million" people who can afford payments with their introductory rates, but not if they jump to higher rates.
Fratto said it was voluntary, and did not represent federal intrusion into the private market. Those comments were aimed at countering criticism from conservatives that the administration was violating its free-market principles by pursuing a government solution to the mortgage crisis.
President Bush, who was to announce the agreement after a meeting with industry leaders at the White House on Thursday, has stressed that the deal is not a bailout because no government money is involved."

[totenhosen]

I don’t understand the question.
I wonder of OCHEAT 28 might know the answer?
Are you talking about foreclosing on the first, and any remaining money being applied to the second? If so, I don’t think it works that way. The second would no longer have a security interest, and the borrower would be entitled to surplus funds if the amount of the sale on the first exceeded the outstanding balance plus costs and fees.
Since the second’s security interest was wiped, they would have no option except to sue to obtain a deficiency judgment. I don’t see how that would be a waiver of their legal remedies to recover the remaining loan balance on their second.
Or you taking about foreclosing on the second, and whether or not the one-action rule applies to foreclosig on the second?
Let me give a more detailed example. Let's say there is $300k in deeds outstanding on the home, $240k on a 1st and $60k on a 2nd. House gets foreclosed on and ends up selling for $250k. (Let's exclude any costs involved in selling/foreclosure) So the 1st T/D gets taken care of. Now there is only $10k left that could be applied towards the 2nd. Can the 2nd T/D holder take the $10k and sue for the deficiency or msut they not take any money and sue for the entire $60k. (This assumes it was an 80/20 loan and not a refi/cash out.)
I might misunderstand the rule of single action. But I thought that the note holder could only do one or the other and not both.

[C-2]

Let me give a more detailed example. Let's say there is $300k in deeds outstanding on the home, $240k on a 1st and $60k on a 2nd. House gets foreclosed on and ends up selling for $250k. (Let's exclude any costs involved in selling/foreclosure) So the 1st T/D gets taken care of. Now there is only $10k left that could be applied towards the 2nd. Can the 2nd T/D holder take the $10k and sue for the deficiency or msut they not take any money and sue for the entire $60k. (This assumes it was an 80/20 loan and not a refi/cash out.)
I might misunderstand the rule of single action. But I thought that the note holder could only do one or the other and not both.
If they are 80/20 PURCHASE MONEY trust deeds, then the lender on either note cannot sue to collect a deficiency, it’s one of the exemptions to the one-action rule.
On non-purchase money TD’s, the one-action rule applies to each mortgage, but in this case, does not apply to the second since it is no longer in existence.
In your instance the borrower would have $10K in surplus funds.
The second’s security interest would be wiped by operation of law. There is no contractual/security requirement by the borrower to turn that money over to the second holder. If they did (how nice of them), I don’t see how it would waive their right to sue to collect the remaining balance due, sans the $10K payment towards the balance due. Like tax liens, TD’s are competing creditors in a collection environment.
One-action gets all funky and complicated if they foreclose on a second or refinance first.

[centerhill condor]

the president likes the free market when it works the way the TV wants.
By changing the terms of the loan agreement we take yet another step towards anything goes...as long as you can stand in front of a TV and cry about it.
continuing the trend towards fatter, dumber, and lazier Americans. Enjoy the ride.
CC

[riverfun]

Ok after reading through here I went over to money.com and read alot more about the bail out. I dont think it is really going to help very many people at all, and your going to have to prove that you cant afford the rate adjustment or able to refi again. I can only imagine the paperwork required.

[OC28HEAT]

I don’t understand the question.
I wonder of OCHEAT 28 might know the answer?
Are you talking about foreclosing on the first, and any remaining money being applied to the second? If so, I don’t think it works that way. The second would no longer have a security interest, and the borrower would be entitled to surplus funds if the amount of the sale on the first exceeded the outstanding balance plus costs and fees.
Since the second’s security interest was wiped, they would have no option except to sue to obtain a deficiency judgment. I don’t see how that would be a waiver of their legal remedies to recover the remaining loan balance on their second.
Or you taking about foreclosing on the second, and whether or not the one-action rule applies to foreclosig on the second?
Well the sale process is pretty simple the first mortgage bids the total debt in this case $100k. The property sells for $120k. The trustee (me) collects the funds and satisfies the first mortgage and then review title for subsequent liens I now have to disperse $20k in excess proceeds. When I review title I send claim letters to all parties and then disperse in order of priority until all are clear. if the second is $8k and the Thrid is $5k then in theory the borrower is entitled to the remaider.
if the title is a mess we may submit the funds to the court and as the court and request that they determine who gets what. This is called an interpleader.
some states have a mandatory interpleader law.

[OC28HEAT]

Let me give a more detailed example. Let's say there is $300k in deeds outstanding on the home, $240k on a 1st and $60k on a 2nd. House gets foreclosed on and ends up selling for $250k. (Let's exclude any costs involved in selling/foreclosure) So the 1st T/D gets taken care of. Now there is only $10k left that could be applied towards the 2nd. Can the 2nd T/D holder take the $10k and sue for the deficiency or msut they not take any money and sue for the entire $60k. (This assumes it was an 80/20 loan and not a refi/cash out.)
I might misunderstand the rule of single action. But I thought that the note holder could only do one or the other and not both.
The one action rule is really not what it seems because you can and most lenders especially larger banks with borrowers with money will pursue a tow pronged approach file a judicial foreclosure and nonjudicial at the same time and just drop one. the difference is not to take one of them to sale.
A judicial forclosure is nothing more that a lawsuit monetary judgement with a court ordered sheriff sale of the property to satisfy the debt. after the sherifs sale the remaining unsatisfied judgement attatches to other assetts. we have clients that hold the 1st and the 2nd on the same property and we file the NOD on the same day and do all the steps including publication of the notice of Trustees sale. The day before the trustees sale on the first we cancel that sale and go to sale on the 2nd in case the borrower wants to reinstate.

[HOSS]

Thank GOD I have a BIGGG diccckk.:D

[Big Warlock]

Told you guys it was W's fault!!! :D