Realtor says adjustable rate mortgages aren't being adjusted on underwater homes

[votesparks]

Run time: 15:40 https://www.youtube.com/watch?v=dok8oRvTXRw   Posted on YouTube: November 08, 2011 By YouTube Member: daytoninformer Views on YouTube: 2   Posted on DU: November 08, 2011 By DU Member: votesparks Views on DU: 1364

 

[dkf]

1. Why did cramdown fail? Insurance and principal.

On April 30, the US Senate voted against S. 61, a bill that would let judges modify home mortgages in bankruptcy. Karen Oakes wrote an excellent article, “Congress Votes Against Consumers Modifying Home Mortgages In Bankruptcy” discussing the vote.

But some might wonder why the banking industry would fight so hard, and spend so much money, lobbying against a bill that would seem to save it money. After all, saving lenders the costs and expenses of foreclosure, maintenance of the property after foreclosure (including property taxes, maintenance, HOA and condo fees) and the lower price it will receive when the property is finally sold, and changing the loan into one that pays interest would seem to a good thing for them.

So, what’s the problem?The problem is insurance. Mortgage insurance, to be precise. It gives lenders a very strong incentive not to write down principal, and gives them more money if they foreclose, even where the property is sold at a significant loss, than to work to make the loan performing.

Many are familiar with PMI, or Private Mortgage Insurance, that is part of the mortgage payment. This insurance doesn’t protect you; it protects your lender from loss if the property goes into foreclosure and the lender loses money. But PMI isn’t the only source of insurance. The Federal Housing Agency (FHA) issues government-backed mortgage insurance to lenders as well.

So what typically happens in a foreclosure? The lender sells the property at auction, tallies up the costs of sale, credits the money received when the property is eventually sold, and submits a claim to the mortgage insurer for the difference. This may result in a loss for the lender, but the loss is far smaller than that which would exist without the insurance. And from the lender’s perspective it doesn’t matter how much the loss is, since that loss is paid by insurance.

http://www.bankruptcylawnetwork.com/why-did-cramdown-fail-insurance-and-principal/

[Gregorian]

3. Once again, it's greed. Thanks for posting that.

Now I am madder than hell.

I don't have a mortgage. And I've sacrificed to avoid having one. But there was a time when had it been slightly different, I would be the one foreclosing. I'm just saying that the more money people have, the more they should be tolerant. But it seems just the opposite.

[pansypoo53219]

2. MBA's/banster prefer the economy suck

than they not get the last dollar they can squeezed out of their suckers. quid pro quo without them doing the quo.