Fight building over judges redoing mortgages (Banks are spending big, lobbying against it)

[Robbien]

Source: AP

WASHINGTON (AP) — Most congressional Democrats say the quickest way to save homeowners like Troy Butler of Saginaw, Mich., is to let them declare bankruptcy and allow judges to dictate new mortgage terms.

Easy, except the lenders that would absorb the pain — and lose control of any deals to ease the terms — do not want to get dragged into bankruptcy court by millions of overextended borrowers.

Butler, 40, is a laid-off General Motors worker who has filed for bankruptcy. But the bankruptcy court has no authority to change the terms of his $90,000-plus mortgage that is more than double the value of his home.

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

But 10 groups representing the lending industry and other businesses are fighting back fiercely. Several have engaged portions of their lobbying machines to stop the legislation. The groups spent $83 million in lobbying on multiple issues in 2008, a figure that shows the power of the banking and investing industry and their business supporters.

Read more: http://www.google.com/hostednews/ap/article/ALeqM5j6hZfAW13d4RF-n9BaLN42zEuWigD95U7UJ80

---

The other article today says the banks are claiming not to be spending our bailout money to lobby for more bailout money. But the article does state the banks are spending a ton of money on lobbying.

Well, this article highlights on what lobbying issue they are spending our bailout money. Turns out we are funding them in their fight against us. They are using our money to stop us in our efforts to renegotiate our mortgages.

[mbperrin]

1. There's nothing remarkable about a refinance. Banks have been offering them

for ever so long.

The only change here is that an outside agent (the judge) is doing it with an eye on both parties' interests, rather than just letting banks run over their vict, er, uh, clients.

Making a bit less profit than planned beats the shit out of losing a bunch on a repo, and if bankers weren't total greedheads living in a fantasy world of their own creation, they'd know that.

In the late 70s, when I was working in banks, a bank that was getting 2% return on assets was considered a go-go performer. That was plenty of return then, and ought to be plenty now.

Pass the bill. Occupied houses are good for owners, the neighborhoods they live in, the cities they pay taxes to and work in, those who do maintenance and upkeep on them, and a host of others. Empty derelicts are only good for metal scavengers. Easy choice.

[truedelphi]

24. Very good report. Interesting: yr note that 2% was once considered

A good return. And back in the day, there were no Madoffs forcing the banks to be so competitive. Over the last fourteen years or so, the entire Wall St financial world seems like one big Ponzi scheme.

right now, experts say that there are one million unoccupied homes in the USA.

[Bake]

91. Banks and insurance companies used to be "boring" investments.

Safe, but not sexy. No big returns, but safe dividends.

It's a damn shame that changed.

Bake

[aquart]

2. Take back every damn dime. Take their houses.

I am not best pleased with these vultures.

[PSPS]

3. The "cram down" idea is ridiculous

The banks don't like it because it will have the effect of revealing all the toxic (worthless) mortgages that they have on their books. The way it is now, they can "hide" them until, they hope, Obama's bush-like "idea" of having the taxpayer buy all of them at their "made-up" overvalued price comes along and gives them 100 cents on the dollar.

I don't like it for another reason. Having courts declare the principal on a "liar's loan" (option ARM -- a trillion dollars' worth of which are due to recast through this year) to be less than it really is will be a windfall to the liars who willfully lied about their income to buy that $800K McMansion on their actual $24K/year income.

Either argument should be enough to scuttle this idea. Either scenario has the effect of using my taxes to buy another person's house for him when he should have been renting all along.

The only way for real estate prices to settle at their proper value (median price in an area should be 2 to 3 times median household income) is to let all these properties foreclose.

[Robbien]

5. You don't mind paying for all the worthless paper the banks are holding

But you want to kick the guy to the curb who got sold a $40,000 house for $80,000.

Banks win twice. They got their share of the $40,000 kickback on the oversold house and then they got to leverage that $80,000 mortgage up thirty times and took profits of over two million. You of course wind up paying the bill and you just shake your head.

Then you come along with blazing eyes and outrage in your heart for the scammed homeowner screaming kick him out. It's so unfair you roar.

[AndyTiedye]

6. They Should Have Been Renting Where?

Part of the real estate bubble has been the rampant conversion of rental properties into condos.
Most of the renters I knew have gotten forced out of the places they lived.

[knitter4democracy]

10. I'd love to know where all those people supposedly are.

They're not here in Michigan. Our housing prices never really went up like everyone else's did (they went up but not crazy, not even in Detroit), and there are plenty of homes in foreclosure just here in Battle Creek that are in the $100K range or less from people who've lost their jobs and can't pay the mortgage. They didn't buy crazy-expensive homes, just median homes they could afford while they had jobs.

I think the judges should be able to rewrite the terms. I also think that homes below a certain value should be bought up to help the poor and middle class.

[Fire1]

28. Oh yeah they were and right in Detroit. The houses and/or

rental properties were being appraised for twice what they were worth. I bought investment property that currently has no equity and totally 'upside down' but b/c it's an investment (rental)the banks and other lending institutions won't touch it. So, I'm going to lose anyway you go. The best thing I can do, at this point, is pay it off and keep what little I'll get on my return, IF and WHEN I can sell it.

[knitter4democracy]

42. Really? I haven't seen anything that over here.

Battle Creek's really hurting.

[Fire1]

45. M& A contractors are doing very well in Detroit. You should see

the boarded up properties ALL over the city. I went to pay my taxes in Dec. and the forclosure lists were in the lobby of the city/county bldg. It looked like a PHONE BOOK! I kid you NOT!

[truedelphi]

94. Someone posted about that back in December

Places in Michigan that went into foreclosure because like $ 4K of back taxes had not been paid.

Really stupid that the politicians in Michigan let this happen. When someone who was living in their home and trying to hold onto it finally gets booted out, they are now eligible for the welfare monies that their home ownership did not allow for before.

So all of a sudden, their $ 450 worth of meds are a County expense. So too are $ 200 or more of food stamps. And even General Assistance monies - that can run up to $ 215 a month.

Multiply those expenses by thousands of people now eligible,a nd you are talking about a real drain on the County and state.

[kimmylavin]

11. Wow. Compassion.

Foreclosure is definitely the best option for everyone! :eyes:

Whether or not you can do the math with your opinion, massive foreclosures are not going to help anyone.

[Waiting For Everyman]

13. No, it's inevitable. Matter of fact, should've been done a year ago

when it came up for a vote and was scuttled by Phil Gramm lobbying for UBS.

Judges can change the terms of any mortage NOW, except a primary home. Let's try reversing that, huh? Why should mortgages on 2nd, 3rd, or whatever number homes be modified, but not a sole owner-occupied residence?

BULL!

Besides, YOUR TAX DOLLARS have nothing to do with it. The bank takes the loss, not you! Let the GAWD-ALMIGHTY MARKET dictate THEM going under if necessary... they perpetrated this, not homeowners.

And btw, do you think a bankruptcy judge is so STUPID that he/she could not recognize someone gaming the system?

There is ZERO reason not to pass this, and it's long overdue!

If we'd like to recover from this mess at all, it must be done and fast. It should've been done a year ago. If it had, this crisis wouldn't have gone this far, and lots of people wouldn't have lost their pension funds too in the stock market. This did not need to become systemic as it has. It could've been avoided, if at least this much was done a year ago when millions of people were being foreclosed already, which might've prevented the 3 million in the pipeline now... with another 5 million expected behind THEM next.

This must be stopped and it won't happen by itself.

[Igel]

46. It wouldn't be the market dictating that they go under.

It would be a change in the rules instituted by Congress.

I know I don't like it when the rules change mid-game for what I'm doing. If I'm going for my degree, the requirements when I'm admitted constitute a contract, so they can't suddenly say that courses I took don't count, but I have to take others courses. I was pissed when tuition/fees skyrocketed after a couple of years, but "stable fee-structure" wasn't part of the deal.

I'd be upset if I get on a plane, only to find that there's some new requirement that comes into effect when I'm over Topeka that says I suddenly have to be fingerprinted before I'm allowed off the plane.

And I'd be really, really upset if I'm having an addition put on my house, get all the permits, and have the thing half-way done only to find that the city suddenly decided to require sprinklers and that it meets new green standards, with a $25k inspection/certification fee.

Changing the rules makes everybody very, very nervous. I didn't like it when credit card debt suddenly was put under new rules by Congress a couple of years ago; I wouldn't like it if I were a bank and made projections based on current law, only to find out that they're not only in error because of bad assumptions, but even figuring out what the right assumptions are based on the law is a moving target.

I think some judges feel more than they think; they're not economists, nor work in macroeconomic policy. I think the same's true for many politicians.

[Waiting For Everyman]

52. The banks liked change just fine when THEY changed BK to be this way.

This is not how it was in the '70s. Taking away the ability of judges to modify primary homes' mortgages was the banks' special project. THEY changed it this way. They rigged the system against homeowners for this many years and got away with it. Boo hoo if they lose an advantage they never should've had.

Besides, they have been more than compensated.

[SOS]

14. "Liar loans"

The term liar loans refers to banks that lied to the borrower about the actual terms of the mortgage.
The borrower couldn't have lied since a "no doc" (liar) loan is, by definition, no documentation.
If the bank refused to look at income or assets, how could the borrower have "willfully lied" to get the loan?

[Lance_Boyle]

70. they are called "stated income" loans - the lie is the "stated income."

Substituting your own definitions when there are standard ones that apply is disingenuous at best. And yes, allowing bankruptcy judges to reset principal amounts *could* reward liars who abused the system. We can only hope that most of the bankruptcy judges who will be handling these cases will be able to detect the bad apples and toss them.

[SOS]

92. There are two categories of liar loans

Stated income and no doc.
On stated income loans, the bank officer would say "write anything, we don't care".
On no doc, the lender would refuse to even consider income and assets (other than a fraudulent home valuation.)

If the bank refuses to accept the information, who is doing the lying?
Within the bank, the term meant "lie to borrower about the terms and push that money out the door".

We went through the whole experience in 2007.
The only one lying in the process was the bank.

[Cronopio]

15. "... a windfall to the liars who willfully lied about their income ..."

A lie that all of the banks knew was a lie, or could have *easily* discovered was a lie, and made the loan anyway.

The fundamental fact of this situation is that, if the banks didn't care about the lies when they made the loan, they need to assume the inevitable result of loans made on the basis of lies.

Assuming anything else is irrational, amoral, and defends the meme that lies are to be tolerated when you can benefit from them. As we all have seen in over the last year, that meme doesn't work and will never work.

[teknomanzer]

36. Personally I would rather have my tax money go toward...

keeping some unemployed autoworker in his home instead of funding bombs used to destroy some Arab's home half way across the world, but that's just me. Everyone gripes about paying fucking taxes but I don't hear too may complaints about the size of the defense budget.

I see you are one of those let the market work its magic people, but if all these foreclosures take place in an economy that is already on the brink disaster will become a certainty. So some sort of compromise has to be reached. As Obama stated - everyone is going to have to make some sacrifices. That means you and me and especially the fucking finance industry. I am not suggesting that the borrower get off scott free, there could be stipulations placed on any increase in value on the home for the term of the original loan - the important thing is to keep the guy in the house so we don't have a housing glut, and the bank still get some payment for the loan.

[Pacifist Patriot]

78. Excellent point.

And you know what. If some asshole gets rewarded for his lies at the same time five decent and deserving people get to keep their homes too than so be it. I can live with that.

[Zhade]

38. Wow. You're a judgmental heartless prick.

NT!

[PSPS]

57. What are you? One of the liars?

Here are the facts:

3 million people have these "option ARM's" and 80% of them were of the "no-doc" variety. 70% of them exaggerated their income to get the loan because they couldn't afford the house to begin with. So 80% of those made the minimum payment, sometimes nothing at all.

If you want your taxes (you do pay taxes, I presume) buying these liars' houses for them, why not start your own contribution account somewhere where people can opt in to do so. Believe me, the vast majority of taxpayers have no inclination to reward these liars so they can stay in their soon-to-be-free-courtesy-of-the-chump-taxpayer McMansion.

[fudge stripe cookays]

68. Let's see a link to those "facts" sparky.

Most of these people were duped into signing, and did not know the truly draconian terms of their ARMS and balloon loans.

Been here since 2005, and only 1700 posts? Only come around once a year eh? And no profile? And why no star? You might want to take a shower. You stink. And we can smell you from here.

[Pacifist Patriot]

76. Good question. I've been reading through accounts of the crisis dating back to...

2005 and I'm seeing a consensus that sub-prime and variable rate lending is but one part of a huge mess of a problem. Anyone who assigns the blame for this mess to one specific event, piece of legislation, rate change, etc. truly does not have a grasp on what a behemoth our economy truly is. Sure it's a system and changing something is going to affect everything else, but a lot went wrong to bring this about. Likewise, it is going to take multiple efforts rather than a single quick-fix measure to put us on the mend.

Some quotes:

"This collapse in housing value is sucking in all borrowers," said Mark Zandi, chief economist at Moody's Economy.com. (emphasis mine)

"Subprime was a symptom of the problem," said James Keegan, a bond portfolio manager at American Century Investments, a mutual fund company. "The problem was, we had a debt or credit bubble."

[Pacifist Patriot]

75. Since you're trotting out facts, why don't you tell us how many people bought homes...

using fixed rate mortgages in the same time period. Tell us how many of those have lost their jobs and are facing bankruptcy and foreclosures.

[Missy Vixen]

63. Yup, that's right

Everyone's just a liar, aren't they? You know best about every home loan that was written in the past ten years, and those homeowners are all LIARS, huh? The air must be fresh up on that big, high horse, isn't it?

Does it occur to you that there were MANY in the mortgage industry that were less than honest with their clients, or falsified paperwork for their own benefit? You don't think this happens? Try this one on for size: We bought our first home in May of 1995 -- Memorial Day weekend, as a matter of fact. Imagine our happiness to discover two additional points of profit, payable to the mortgage company, buried in the paperwork.

>The only way for real estate prices to settle at their proper value (median price in an area should be 2 to 3 times median household income) is to let all these properties foreclose.<

Yeah. Totally. It's better those families are living under a bridge somewhere or on the street, because real estate prices will have "settled" at what you think they should be. Those buying are not the ones who drove up the price, are they?

Julie

[Romulox]

71. "Cram down" is available for ANY secured debt in bankruptcy, except a principle residence

or a recently purchased automobile.

Please read up on the subject before declaring something "ridiculous". :hi:

[Pacifist Patriot]

74. You seem to have bought into a misleading talking point.

ARMs are a problem, but not the only problem. I am in a position to interact with a great number of people who are struggling to keep their homes right now and it has naught to do with ARMs. It has to do with:

a) losing jobs or being forced to take pay cuts.
b) property tax increases and home owner's insurance rate hikes raising the monthly housing payment 25% or more over what the fixed mortgage payment was when the home was originally purchased.
c) foreclosures and short sales in the neighborhood enabling banks to claim a lower property value so they can refuse a refinance on the grounds that the new loan would exceed loan to value ratios.

If you think anyone making $24,000 a year plopped into an $800,000 McMansion you have another think coming. Seriously, have you ever applied for a mortgage? There is this little matter of proof of income. Folks can fudge a little, but not to that degree.

You are woefully undereducated on the situation and astoundingly cold-hearted.

[truedelphi]

93. Hear Hear. But common sense is no longer something to be

Respected.

A society that has accepted "trickle down" and "Supply side" for so long has few left that can even operate from the rules of common sense.

[Highway61]

4. Why are they spending

even one fucking dime on lobbying?????? And McCain is going to vote AGAINST Obama's stimulus package as it stands now because of wasteful spending!

edit: for spelling

[Robbien]

7. You answered your own question

Despite what his PR release says, McCain's not voting against the bill for any reason other than the fact that lobbyists are spreading the money around.

[bearfan454]

8. Obama has enough votes to pass the bill.

It doesn't matter what McCain or any of the other repukes say.

[truedelphi]

25. Gawd, I hate lobbying. How will it end? Who can end it? n/t

[gulfcoastliberal]

9. This should've been included in the 1st bailout - dems caved to Paulson, et al.

Anything being opposed by the banks should be supported.

[The Stranger]

58. Too bad Traitor Pelosi and Imbecile Reid didn't insist on it back then.

Totally fucking worthless.

[Froward69]

12. republicans, bankers and those driven by greed

do not like having to tighten their belts. or adjusting lower prices. they forget it is better to take in less than nothing at all. they are willing to force a long term Depression than actually getting things going faster.

this is part of the FREE market it has to adjust down. before it can regain losses it has already incurred.

[bertman]

34. It's not that they don't LIKE to tighten their belts, Froward69. It's that they think they

DON'T HAVE TO tighten THEIR belts. It's up to the peasants to tighten their belts while the financial elites go right along building their stockpiles of bailout cash.

This is our government's biggest ENTITLEMENT PROGRAM: the financial wizards who fucked up the economy and brought this depression on feel lie they're ENTITLED TO KEEP THEIR ILL-GOTTEN LUCRE NO MATTER WHAT. And now they're paying their lobbyists to ensure that they do.

This is infuriating.

[Froward69]

48. Agreed!!

[WillYourVoteBCounted]

16. OMG this would hurt CEOs - they might not get their $20 Million bonuses this year

OMG OMG the peasants are acting up - they want to keep their homes, and
the big rich CEOs need to get richer.

Its time to replace the 5 year old golden faucets and marble commodes in their offices,
they're out of style now.

[WriteDown]

17. Stupid and ridiculous...

I've explained this numerous times. The majority of mortgages are service based. That means there is an investor that pays a servicer to take payments, make collection calls, and just maintain the loan in general. The servicer is usually paid a portion of the interest rate. So if you have a 6% loan than maybe 5 of the 6% goes the investor and the other 1 is kept by the servicer. If a judge comes in and then says that the interest rate has to be 4% then the servicer would be actually paying to service the loan. I hope the next bailout in 6 months is in the TRILLIONS because we are going to need it with ideas like this.

[Career Prole]

21. Everyone else in the world is taking paycuts or pink-slips.

"Loan servicers" don't warrant a guaranteed income any more than anyone else working for a living. They can take their lumps like everyone else or tell the investor whose loans they "service" they need to renegotiate their wages for their "servicing". I'm sure the investor will take good care of them.
Wouldn't be a "loan servicer" yourself, would you? You sound mad enough that maybe it was your ox that got gored.

[WriteDown]

23. I worked in the mortgage industry for many years....

You're solution sounds fine, but don't expect any mortgage product to be offered for below 15% interest then. Also, by your logic, we shouldn't even attempt any bailout plan, welfare, social safety net, etc. since people should "take their lumps" as you so succinctly put it. Glad to know you and the rethugs are on the same page.

Also, the an investor wouldn't have to renegotiate. What would happen is that the service contract would be broken and the servicer would have to buy out the investors risk. Since no servicers carry that amount of cash, you would basically eliminate 100's of thousands of jobs. Guess people can just "take their lumps" though.

[Career Prole]

32. You sure have taken my logic to strange places.

My logic is the mortgage industry should take their lumps like everyone else. Most of us who have "taken our lumps" were doing so well before any freakin' bail-out was even proposed. The reason the economy bombed is because of mortgage industry a-holes. Now you want it to bomb further to save your mortgage industry. When it comes to "being on the same page" as republicans mortgage industry apologists are near the top of the list.
Go ahead. Offer your mortgage products at 15% to protect your profits. The housing market would sort that out soon enough if it needs sorting...and if you have "100's of thousands" of people making freakin' collection calls then you've pretty much pointed out a mortgage industry with a serious problem...and that'd be a problem of its own making.

[WriteDown]

37. So little grasp it's amazing...

The products that created the collapse in real estate weren't created by the "mortgage industry." Most products are originated with Fannie and Freddie. The fact that you think that the mortgage industry is dominated by collection personnel is laughable. You have everything from IT to escrow. Collections makes up a minuscule part. The mortgage industry will survive though, albeit with fewer players. Given your demonstrated business acumen though, I worry for whatever industry you are in though :eyes:.

[Career Prole]

44. Enjoy a stroll down memory lane.

This journal entry is nearly two years old now. You will of course notice there were far more apologists back then than there are now. Fannie and Freddie, my ass. Nice try.

[WriteDown]

47. The fact that you confuse cosumer credit and mortgage...

products pretty much confirms my assessment of your business knowledge. Case closed.

[Career Prole]

50. Case closed? Hardly.

This was at the link...did you happen to miss it?

New, more advanced pricing models have allowed banks to extend nontraditional mortgage products to new borrowers, including those with lower creditworthiness, he said.

But with those changes comes more risk, Lacker said, while noting that innovation is an "inherently risky activity."

As far as your assessment of my business knowledge, who sank the economy? Guys like me, or guys like you with "business knowledge"?

Turn my business knowledge into your personal straw man, mortgage dude, but it won't change the true guilty parties in what happened to the entire world's economy.

That was done right here in America by folks with plenty of so-called "business sense" (quite possibly folks like yourself considering your frantic defense, mortgage dude) extending "nontraditional mortgage products to new borrowers, including those with lower creditworthiness".

Just accept your part of the blame and let the grown-ups in the new administration do what they can to ameliorate the damage you and your mortgage buddies have caused.

After all your foul-ups no one in their right mind will look to the mortgage industry for the solution to this.

[WriteDown]

51. Haha...I have some homework for you...

Tell me where those pricing models originated. In fact, tell me what product exactly caused the meltdown. Was it jumbo, alternet, alt-a, etc.? For extra credit, tell me where the no-doc loan originated.

You seem to also be very conflating mortgage originations and mortgage servicing which are two very different things and often different entities.

Luckily, I am out of the mortgage industry now and working on buying another business.

edited for spelling.

[Career Prole]

55. Nope. Not my job, remember? I'm just one of the billions

who got screwed by the people whose job it was. Now you're changing businesses? Let me guess...you're going into the repo business!

[WriteDown]

60. You should not comment on something you are...

not knowledgeable about :). Actually, I am buying a liquor store.

[Career Prole]

65. Well, at least you'll be in an honest trade for a change!

:)

[Waiting For Everyman]

54. Serviers are paid 100% (!) from FEES, not from investors' profits.

How do I know? I worked for Wells Fargo last Spring, THE biggest mortgage servicer in existence, and THEY SAID SO POINTBLANK in our training course. Straight from the horse's mouth.

I was flabbergasted that they said such a thing unasked.

[WriteDown]

61. Nope...

There is what is called fee-based servicing. What that means though is that they are paid through the fees they charge the investors for servicing the mortgage, and other fees such as payment fees, transaction history fees, etc.

[Waiting For Everyman]

64. Then you think Wells Fargo doesn't know their own business?

They emphatically say that it's 100% fees charged to borrowers... late fees and other penalties ENTIRELY. That is their own statement as of April '08.

I'm sure you know more about it than they do.

[WriteDown]

80. Whoever your trainer was did not understand the

business model then. That's not uncommon though. I've worked with Wells before so I think I have some idea about fee-based servicing and non-fee based servicing as well as risk-based servicing and non-risk based servicing. Also, since over 95% of mortgages are paid on time without any contact with their servicer, making money solely on fees would not be profitable.

[Waiting For Everyman]

82. Guess again, WriteDown.

100% of Wells Fargo's servicing income is borrower-paid fees. Period. Their own statement, and they didn't stutter. I even asked for it to be repeated and elaborated. That is why they rarely waive the fees.

[WriteDown]

83. Haha....

Find me some links on that. I'd love to see that info.

[Waiting For Everyman]

84. Links? You're joking. You think they put that in writing? In public?

I highly doubt that you have seen their servicing agreements, which are ultra-secret too. I've only seen one of them once, which came out in a court case.

FYI, my "trainer" was not just a trainer, but one of the founding five originals of America's Serivicing Company, which Wells Fargo bought out when it went full-throttle into the sharking business. She trains for the entire country, and is not someone who is "low on the totem pole".

I think she knows better than you, how it is done.

[WriteDown]

85. Oh please...

Ultra-secret, but they'll let a training class in on it :eyes:? You should go straight to the press with this incriminating information.

[Waiting For Everyman]

86. ROFL! And you know where you can go

with your bullshit. Yes, it happened that a principal conducted a training class. She develops new materials by doing that. And probably figured that we weren't important enough to worry about.

But ultra-secret is a term I used not about what we were told, but about the servicing agreements you blithely claim you know all about. Sure you do.

[WriteDown]

87. So she slipped up with you?

Like I said, she was obviously wrong and you were on to her. You need to contact a reporter ASAP. Or you can do some math. How big due you think Wells total loan portfolio is? Probably between 2-4 million. About 85% will never pay any fees over their lifetime. So how much does Wells have to make off of the remaining loans to earn a profit. Figure in the # of employees and their salaries.

[Waiting For Everyman]

88. I'll say again - you think you know more about WF's bus. than they do.

I'm telling you what a principal said, unasked, emphatically, and in detail. If it comforts you to believe what you want, by all means do.

Personally, I'd like to see the CEO before a Congressional committee to be asked that question under penalty of perjury. That might be interesting.

[WriteDown]

89. I've worked with Wells....

as well as other servicers. You seem averse to the simple math I presented to you. You said your trainer thought you were not significant. Obviously she was correct based on your unwillingness to go to the press or write an expose.

Interestingly enough, Wells is one of the only servicers doing fairly well right now due to their limited exposure to the subprime market. I guess they are charging a lot of fees :eyes:.

[Waiting For Everyman]

90. Yeah, right! "Troubled loans" are the cash cow

of the mortgage servicing industry. If you don't know that, you don't know ZIP!

As far as some obligation I have to expose this, this format is all I have time for, and your share of it is used up.

[Waiting For Everyman]

53. Then how was Sheila Bair able to mass-modify B of A's loans, if it's impossible?

That's total bull.

And for an "investor" to try to add 5% profit to a mortgage loan is nothing short of loan sharking. That's TWICE the going rate now, when money costs the banks zero. Every industry and asset is deflating but not them, huh? It simply is impossible. Impossible means it can't be done, regardless of what a contract says or how our system works.

We are witnessing impossible at work. Really smart. :sarcasm:

[Romulox]

72. "Cram down" is available for commercial and rental property already. Just FYI. nt

[w4rma]

18. Then Obama is most likely doing this exactly right. (nt)

[EFerrari]

19. As usual, we're funding these people to screw us. n/t

[DURHAM D]

20. I am confused - early this week it was reported that Obama is against a cram down provision.

What is his actual position?

[fudge stripe cookays]

22. I read somewhere the other day...

that this was partially caused by the bankruptcy bill these fuckers passed. Used to be, even if you had financial problems, the first party that had to be paid was the one that owned your mortgage. That way, you could still keep your house.

With the new bill, the credit cards had to be paid first, so there went your house, and millions of others. These greedy fuckers now want to make sure they seal the deal.

This needs to happen now. Roll back that fucking bill so people can keep their houses.

[Hutzpa]

26. ditto

on these greedy fuckers not wanting to let go, most people I know wants to keep
their houses but because these banks are being greedy it is becoming impossible
for home owners to negotiate anything.

The banks are thinking we are losing money (we i.e their share holders, CEO's
and Executives) do not want to let go of their rip off dealings.

[BlueCaliDem]

33. You get my vote. The ONLY law in the U.S. that was consumer friendly was the BK Chp. 7 law.

DLCers and repubs alike voted to pass this unfair law effectively removing that only protection for "the little guy" with a bill that the credit card companies have literally written themselves.

To President Clinton's credit, he vetoed BK Chp. 7 Reform twice (it passed a democratic-controlled congress for some strange reason... hmmm), saying it treated the working poor and middle-class unfairly, while putting no new restrictions on credit card companies.

This law needs to be rolled back and restore the rights (being that our government loves to tout how "christian" they are - this law was based in the biblical "forgive debt after 7 years") back to the least affluent in our country.

Without that one power of threat against aggressive credit card companies, Congress has effectively exposed the sheep to the wolves. It needs to be rolled back, and rolled back yesterday. We need to level the playing field once again.

[Zhade]

39. Well, let's not forget Biden voted for that bill, and Obama for the bailout.

They're not blameless in this, sadly.

[fudge stripe cookays]

67. I never said they were.

Just pointing out what I heard.

[Romulox]

73. Your post is not accurate. Secured debt is still prioritized under BAPCPA. nt

[teknomanzer]

27. I just don't get the banks.

Okay now I feel like maybe I am not grasping something - maybe I am oversimplifying things. As I understand it the bank loans Mr. Butler 90,000 dollars. The market plunges and now the house is worth 45,000 dollars. If the bank forecloses they get the house worth 45,000 dollars - they lost 45,000 dollars on that deal. Now they can hope that they can hold the property until the value recovers but the longer they hold the house the more the bank looses the money. They might auction the house, but in this market there is the potential for losing more money or they will just maintain the loss of 45,000 dollars. The bank loses and Mr. Butler loses.

But if Mr. Butler can renegotiate the mortgage the bank will not lose as much and Mr. Butler doesn't end up on the street. Plus there could be a stipulation that a balance of equity could be owed to the bank when the market recovers and the home value goes up. If I were the bank I would want to make a deal with Mr. Butler. But what do I know? Somebody enlighten me.

[Hutzpa]

29. And don't forget the

property taxes that counties in difference states will be losing,
which is an actual revenue the counties could not afford to
for go...

[MNBrewer]

30. I guess the alternative is foreclosure, then the bank gets a hefty bailout!

End bailouts for banks! Let's bailout the people first!

[scytherius]

31. the best idea

It keeps the paper from evaporating, people in their homes, etc.

What I do find amusing is that the banks are spending bailout money to fight this.

And for those that think that "liars will be rewarded" . . . puhleeze. Every single group has it's liars. And as for me, I think it best for all that a handful of homeowner liars get off to save the rest instead of giving it to the bank liars. Moralizing never, ever gives a good result. One of thousands of examples would be medical marijuana. We have an ridiculous result because of morality making the decision. We need to stop trying to decide what is "fair" (nothing is) and decide what works.

[Zhade]

35. But "Thank God It Passed!"

We warned the suckers here who fell for the bailout bullshit.

Shame they refused to listen to us.

[moonbatmax]

40. Are these the same banks we bailed out?

Seriously, I want to know:

How much of that money they're spending to fight this comes out of the bailout we just handed them?

[Capt13]

41. What was Martha Stuart put in Jail For?

A lot of these sub-prime mortgages are being "serviced" by collection agencies posing as mortgage servicers. Many of the notes they bought were priced 50 cents on the dollar thru short selling and repackaging portfolio's. It's often to these predatory "Servicing" corporations advantage to drive struggling homeowners holding high risk mortgages into foreclosure by jacking up interest rates and tacking on all sorts of bogus fees. Then they repackage their good mortgages at a higher rating and sell them at a profit. I can't even believe this is legal. The system is so convoluted, A lot of loans were made knowing full well the homeowners were not going to be able to afford them but the average borrower is easily duped by smooth talking salesmen. Banks usually lose money on foreclosures and are willing to work with their customers, but to these companies foreclosure is a profit making venture.

[Hansel]

43. Maybe the banks should spend their money and efforts on

working with the home owners to refinance their loans before they end up in court. They were just given billions to fix this mess and chose instead to pat themselves on the backs with big bonuses, to finance lavish conferences and office remodels, and engage in buying other banks, and now pay lobbyists. How adorable. Now they are still in the same mess they were before the "bailout" because they made bad choices--again.

The smart thing for them to do would be to work with the borrowers before there is a need for them to go to court. Do mass conversions of ARMS and interest only loans into fixed rate 30 year mortgages for primary homeowners. This way they can skip the cost of going to court and the majority of the people who are in danger of going into foreclosure would likely not end up there. It would be nice if they had that "bailout" money back to cover the expense of doing this, wouldn't it?

I do not feel sorry for the banks. They made the mess by believing their own BS and they can suffer the consequences. One of which is to get over the idea that CEOs and Exec VPs are worth the billions of excessive bonuses they are paid. There are plenty of people they stepped on on the way up that are far more intelligent and qualified, and would accept a fraction of the pay.

As far as the primary homeowners' responsibility for the mess that they are in, I blame the lenders who knew better but let greed override good business sense and honest customer service. I put flippers in the same category as the lenders.

There needs to be a change in culture in the banking business and a new approach to economics. Because what they believe to be God's word on the subject is not working. Reaganomics is dead. The sooner they figure this out, the better for everyone. I doubt what is being proposed here will ever happen, because just the threat of it should call the lenders to more responsible action once they figure out Obama's not playing with them. This is their wake-up call.

[relaf]

56. explanation of Chapter 13

I practice bankruptcy law out here Orange County, CA aka foreclosure capital of the west. The term "allowing bankruptcy judges to modify mortgages" is a bit of a misnomer. Currently, in the Chapter 13 process certain secured debts are routinely modified usually cars and other personal property. The judge doesn't modify it, rather the Debtor proposes a plan which comports with the requirements of the code, and the Judge then approves a plan which modifies it. It isn't a situation where the judge looks at an obligation and the unilaterally modifies it. Usually with vehicles, the fair market value of the car is considered the secured portion of the debt and repaid in full over the life of the plan (3-5 years) at a relatively low interest rate (5.5% or so) and the unsecured balance is paid prorata. The secured creditors are notified of this and have ample time to object if they disagree with proposed modification. If an agreement between debtor and creditor is not reached, then the judge makes a decision. When the plan is over, the unsecured debt not paid in the plan is discharged.

If this bill passes (which it should, but I'll admit I'm biased), the first mortgage would be modified in a similar way. The debtor would propose new mortgage terms likey based on an appraisal of the property and current interest rates. The new terms would repay the lender over 30-40 years likely "outside the plan" in bankruptcy speak. The unsecured portion (for our example autoworker, approx $40k) would be repaid prorata over 3-5 years and whatever left over would be discharged.

I hope this sheds some light on this.

[bobshin]

49. Unfortunately, even people who made enough to pay their mortgages

comfortably to begin with are losing their jobs. There is a huge financial sink hole ahead of us. Those who are defending foreclosures over keeping these properties at the very least, occupied, will get hit themselves at one point from the fallout if nothing else. Very few people will come out of this unscathed. An empty neighboring property will increase your insurance costs. Out of widespread desperation- and the bank's inability to secure such properties, that property will most likely be stripped of all of its metal- no matter how low that market goes- and the property will become close to useless for the long term. Which will decrease the value of your property- while your taxes increase because of a smaller pot.

Until this realization starts to take hold, all these rants against irresponsible mortgagees and mortgagers will do nothing but delay the inevitable.

[PSPS]

59. You've got it wrong

Foreclosures does not equal "empty neighborhoods." What it does is force the price of housing back down to affordable levels. Do you realize that over half the inventory of unsold homes today is forclosures? Being motivated sellers, the banks holding these REO's are reluctantly accepting the fact that they have to lower the asking price to move the unit. No more $600 per square foot for that 950 SF bungalow. Instead of $595K, the house will sell for $195K. Then the comps will get hammered and other houses up for same will see similar reductions. In fact, areas where this is happening are seeing an increase in year-to-year sales because, surprise! Reasonable and affordable prices are being asked! Who'd a thunk it, huh?

[Capt13]

69. Tell that

to the people in my area where family neighborhoods have been turned into rows of crack houses and stripped, burned out shells of houses that sold for 250,000. a few years ago are going for 10-20k to speculators hoping to raze the property to sell the land later.

[Pacifist Patriot]

77. What it does is force the price of housing below what most of the people...

in the neighborhood bought their houses for, thereby exacerbating the problem caused by falling home values in the first place.

I bought my home six and a half years ago with a fixed rate mortgage about 18 months before housing prices shot through the roof in my neighborhood. They peaked out for about another 18 months and then began to drop back to where they should have comfortably risen. They settled there for about two years and then drastically plummeted a year ago. Because of short sales and foreclosures for the most part.

My family is now earning a bit more than we were when we signed our fixed rate mortgage paperwork, but our housing payment is 28% higher because of increases in property taxes and home owners insurance. We approached our bank to refinance to a lower rate and were told they would not do it because of the loan to value ratio. (We're facing some medical expenses with one of our children and could do with a little extra each month)

That's pretty humbling to someone who has a stellar credit rating, never missed a mortgage payment, has steady income, plopped down a significant chunk of equity when buying the home in the first place.

You really are showing an astounding incapacity to view this situation from multiple perspectives. Not everyone owning a home these days earns minimum wage, claimed a six figure salary and purchased a postage stamp house for a million bucks. A bit of hyperbole there, but this seems to sum up your estimation of the problem.

[customerserviceguy]

62. I guess I have to wonder

what will happen a year or two later when the bankruptcy judge has reworked the loan, and it 'needs' another rework because of continually declining property values. Also, if you give bankruptcy courts the power to rework done deals, expect the 20-25% down payment to become a permanent fixture in the mortgage market, even for people with excellent credit.

There are no easy answers here. Over the past ten or so years, real estate was allowed to skyrocket by the easy availability of cheap money, and now we're paying the piper. There is no substitute for it needing to come down to the price levels the market can bear. And that's a considerably weakened market than what we had ten years ago.

[Rebellious Republican]

66. Thought I saw this post somewhere else......

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4908127

:kick:

[Pacifist Patriot]

79. I really do not care if some people lied to get into their homes and are rewarded...

for being assholes. If the process keeps another decent and deserving person in his/her home than so be it. I'm just tired of the cold-hearted who want their fellow human beings to suffer rather than recognize this problem has far wider repercussions for every single person, homeowner or not.

[harun]

81. I agree, they should have learned their lesson by this point anyway.

If they haven't by now they never will but at least it will help people out. Which is fine by me.

[Zodiak]

95. Its the politics of resentment and judgment

Too many Americans have been taught to look for fault in others and judge them summarily based on whatever fault they find. If it means that person dies, suffers for the rest of their lives, get maimed, or get tossed out on the street, it doesn't matter, so long as the people who subscribe to the politics of resentment and judgment get the emotional change of feeling superior.

It's like a nation of snotty teenagers, judging everyone without any self-examination. Adults understand that everyone has faults.