Mortgage Bail Out - Page 4 - Mercedes-Benz Forum

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post #31 of 106 (permalink) Old 04-28-2008, 01:35 PM
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It sounds so easy to blow off "less than 2%" as an insignificant number since there are about 48 Million Home Mortgages in America BUT...This puts that number in a bit of a different perspective.


What this means is that from 2006, when this started to 2009 when the ARM bump from this March finally washes the majority of Foreclosures from the last of the Sub-Prime mess, there will be a projected 5,500,000 Foreclosure actions taken. 2,600,000 have already occurred and there are 20 months to go.

The impact on housing values, tradesmen, entire economies is much more than the "less than 2%" figure that makes it sound like a minor cold. It is a massive failure of the system. And delinquency rates for standard mortgages are not "less than 5%". Mortgage Bankers Association put the end of 2007 number at 5.82% for STANDARD Mortgages and 17.31% for Sub-Prime Mortgages.
Here's the other side of the equation.
From the rough numbers, 5-10% of the foreclosures will be avoided.

==============================================
Bank of America to Modify Mortgages, Help Homeowners (Update3)

By David Mildenberg and Peter J. Brennan

April 28 (Bloomberg) -- Bank of America Corp., seeking approval of its Countrywide Financial Corp. takeover, said it will modify at least $40 billion in troubled mortgage loans over the next two years to keep customers in their homes.

The move would help as many as 265,000 homeowners, Liam McGee, president of global consumer and small-business banking, said today in Los Angeles at a U.S. Federal Reserve hearing on the pending purchase. The company is making $2 billion in donations to communities over the next 10 years, including funds for organizations giving advice on foreclosures, he said.

``No one benefits from a foreclosed home,'' McGee said. ``It is bad business for banks.''
Bloomberg.com: Worldwide
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post #32 of 106 (permalink) Old 04-28-2008, 02:29 PM
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I got six mortgages during the last year of the boom (not speculation but investments) and I can tell you from first-hand experience--x6--that you are full of shit! No one was ever "handing out money." I had to sign my name at least 11 times to obtain each loan. I had reader's and writer's cramp by the time I finished!
Well, where did I say they didn't have to go through the process like it supposed to be and I am sure they all signed pages after pages like you did. They probably signed more pages than you because they wanted to bury the fine prints. The lenders were too eager to lend out money to people who were marginally qualified because they knew the loan would not sit on their desks longer than 24 hours. It is more of an ethical issue than business process.

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post #33 of 106 (permalink) Old 04-28-2008, 03:27 PM Thread Starter
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You just summarized the problems with the system that created the Trillion dollar bailout that Taxpayers are now funding.

Banks kept retooling the system to make it easier for them to game it to increase profits. I watched it happen in my loan. The appraising agency asked for the purchase contract when they went to complete the appraisal. I refused to give it to them as it was unethical for them to have that in an unbiased appraisal [plus, I wanted a clear view of the house].

Once they tweaked it too far and got in trouble, they want bailed out - for their recklessness. That is wrong. Banks should have to pay for their mistakes, not taxpayers. It's an accountability thing.



.
The appraisal thing is nothing new. It has been this way under a number of administrations.
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post #34 of 106 (permalink) Old 04-28-2008, 04:45 PM
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You just summarized the problems with the system that created the Trillion dollar bailout that Taxpayers are now funding.

Banks kept retooling the system to make it easier for them to game it to increase profits. I watched it happen in my loan. The appraising agency asked for the purchase contract when they went to complete the appraisal. I refused to give it to them as it was unethical for them to have that in an unbiased appraisal [plus, I wanted a clear view of the house].

Once they tweaked it too far and got in trouble, they want bailed out - for their recklessness. That is wrong. Banks should have to pay for their mistakes, not taxpayers. It's an accountability thing.



.
In you rush to blame "The System," you overlook the definition of what a good appraisal is supposed to determine: What a willing buyer is willing to pay a willing seller." Appraisals are at best, a very inexact art--not science but art. They always use comps because that is the best way to determine what a willing buyer was willing to pay a willing seller. It seems to me that the appraiser was not only w/in their rights to ask you what you were willing to pay, but they would have been remiss not to have asked you what you were willing to pay. And only a "jerk" (nothing personal) would tell them to "go fish!" I love ya bear!!

Don't believe everything you think
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post #35 of 106 (permalink) Old 04-28-2008, 09:18 PM
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In you rush to blame "The System," you overlook the definition of what a good appraisal is supposed to determine: What a willing buyer is willing to pay a willing seller." Appraisals are at best, a very inexact art--not science but art. They always use comps because that is the best way to determine what a willing buyer was willing to pay a willing seller. It seems to me that the appraiser was not only w/in their rights to ask you what you were willing to pay, but they would have been remiss not to have asked you what you were willing to pay. And only a "jerk" (nothing personal) would tell them to "go fish!" I love ya bear!!
Glad you responded to the appraisal issue. The appraiser's job is to justify to the lender that he was lending on a good collateral. The contract contains more than just a purchase price, it can reveal other terms and conditions that could affect the lender's interest. It might have been wiser to accompany the appraiser to assure yourself that he noted all the best features of the property. Finding good comparables is the most difficult task for the appraiser, so it's also valuable to point out the ones you know of.

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post #36 of 106 (permalink) Old 04-28-2008, 10:10 PM
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Glad you responded to the appraisal issue. The appraiser's job is to justify to the lender that he was lending on a good collateral. The contract contains more than just a purchase price, it can reveal other terms and conditions that could affect the lender's interest. It might have been wiser to accompany the appraiser to assure yourself that he noted all the best features of the property. Finding good comparables is the most difficult task for the appraiser, so it's also valuable to point out the ones you know of.
Appraisers sometimes are put under incredible pressure to make the comps come in so that a "deal" can get closed.

That happens a lot. Not that many deals failed just because of the appraisals that came back in.

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post #37 of 106 (permalink) Old 04-28-2008, 10:27 PM
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Glad you responded to the appraisal issue. The appraiser's job is to justify to the lender that he was lending on a good collateral. The contract contains more than just a purchase price, it can reveal other terms and conditions that could affect the lender's interest. It might have been wiser to accompany the appraiser to assure yourself that he noted all the best features of the property. Finding good comparables is the most difficult task for the appraiser, so it's also valuable to point out the ones you know of.
High faluting words indeed. Appraisers are lackeys feeding off
the $$$ stream, no more no less.
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post #38 of 106 (permalink) Old 04-28-2008, 10:28 PM
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Well, where did I say they didn't have to go through the process like it supposed to be and I am sure they all signed pages after pages like you did. They probably signed more pages than you because they wanted to bury the fine prints. The lenders were too eager to lend out money to people who were marginally qualified because they knew the loan would not sit on their desks longer than 24 hours. It is more of an ethical issue than business process.
Keep it up , elau, whatever you are taking now
is working indeed. Now , repeat after me and
say "Jayhawk".
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post #39 of 106 (permalink) Old 04-29-2008, 05:49 AM
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High faluting words indeed. Appraisers are lackeys feeding off
the $$$ stream, no more no less.
I cannot believe I actually agree with you on this one!!!!

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post #40 of 106 (permalink) Old 04-29-2008, 08:43 AM Thread Starter
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I never blame the 72% of America that has its head on pretty straight most of the time. Those are hard working people trying to make ends meet. I Blame the Administration. Totally different thing. For totally different reasons.

And if you READ what I wrote you saw that I said "Now if you add in the number of people who were creative with the application in cooperation with the bank/mortgage company..."This is not simply blaming the banks. But I find if you put a open box of money on the curb, most people will rationalize a way to stick their hand in and grab some of it, damn the consequence.

It WAS the responsibility of the BANKS to insure that they made loans that were legal, sound and held a good chance of being paid back. That responsibility is in their charter, it is to their stockholders. It is suppose to be enforced by state and federal regulators to protect the bank, the stockholders, the Federal Deposit Insurance folks and the Taxpayers so they don't have to bail out banks if either creditworthiness or trust start a run on the banks.

See if you can pick out the failures listed in the paragraph above, both legal and ethical.

As for personal responsibility, note I have not said a word about bailing out flippers or spec buyers, developers or even those who use their home as an ATM. Only folks I have EVER suggested be given a hand is that group that were on the receiving end of predator lending practices that targeted mostly poor, uneducated folks that trusted banks and were unable to understand what they were getting into [not understanding ARMs and Balloons etc]. It is a small but significant part of this debacle.

The whole point of starting this thread was that Tax Payers should not be forced to bail out either the banks or the home owners. Why should those that were responsible in this country help out those that were not? Why should everyone look to the government everytime anything goes wrong?

In those cases there was predatory lending involved settle it in civil court. Let the home owners sue the banks, mortgage companies, brokers, etc. But don't have the tax payers bail out these people.
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