Home › Forums › Financial Markets/Economics › Loan mods not working… Really??? Kicking the can down the road doesn’t work??? Who would have thought…
- This topic has 29 replies, 13 voices, and was last updated 11 years, 9 months ago by sdrealtor.
-
AuthorPosts
-
June 21, 2012 at 12:17 PM #19893June 21, 2012 at 12:44 PM #746203UCGalParticipant
So wait… let me see if I have this right…
Consumers who fall behind on their mortgage payment…. still qualify to get newly issued car loans and newly issued credit cards?
Looks like there were no lessons learned in the past decade… We’ll still give credit to anyone with a pulse… regardless of their track record.
June 21, 2012 at 12:52 PM #746204spdrunParticipantB…but the economy has to keep running!!! Can’t have people driving used cars and using 5-year-old computers that are still good enough.
THINK OF THE POOR AUTO WORKERS!
June 21, 2012 at 1:09 PM #746206CoronitaParticipant[quote=UCGal]So wait… let me see if I have this right…
Consumers who fall behind on their mortgage payment…. still qualify to get newly issued car loans and newly issued credit cards?
Looks like there were no lessons learned in the past decade… We’ll still give credit to anyone with a pulse… regardless of their track record.[/quote]
No no no. you got it all wrong.
People that fell behind on their mortgage payments got to stay in their homes for months…no wait years… rent free..Which allowed them to spend $4 for ever $1 they didn’t have to make a mortgage payment to, and then pay the minimum balance on their CC and auto/crap loans and/or leases.
What??? You actually think most people that drive around in those luxury cars (even if preowned) actually paid cash for it??? Really? The image man…Just the image…
You do realize we’re that we’re back to pre-recession sub-prime lending in the auto industry, don’t you? I mean, how do you think Chrysler’s pulling their great sales numbers…Clearly, it isn’t because folks on Rodeo Drive or folks on Long Island are ditching their Euro/Italian luxo’s for a 200m/300m in masses..
http://www.autoblog.com/2012/06/05/chrysler-sales-growth-fueled-by-subprime-loans/
Can’t wait for this one to blow up and get bailed out………..again…..
Automotive News reports Chrysler owes some of its recent sales success to a resurgence of subprime loans. Chrysler has a history of working with customers burdened with questionable finance histories, and lenders have begun to loosen credit restrictions. As a result, 29 out of every 100 auto loans for new Chrysler models went to buyers with a credit score under 680 in the first quarter of this year. Experian Automotive classifies loans tied to that credit score as subprime. What’s more, nearly 21 percent of Dodge sales through May went to buyers with annual interest rates of 10 percent or more on an average term of 71 months.The report says that on the whole, just eight percent of all new car loans have interest rates of 10 percent or more. Even so, Chrysler’s sales are up 33 percent through the first five months of 2012, besting the industry average by around 20 percent. On the whole, Automotive News reports subprime lending in the new car market has returned to its pre-recession levels.
June 21, 2012 at 1:26 PM #746207moneymakerParticipantYes-How can “cash be king” when credit is so loose? I’m not complaining mind you just making a mental connection. By the way Hewlett Packard hit a new 52 week low today(good?bad?)don’t know but I bought some of the action.
June 21, 2012 at 3:31 PM #746217briansd1GuestFlu, maybe you haven’t worked with salesmen enough?
Our world is all about sales and turnover. The salesmen will always find ways to qualify buyers so that sales don’t come to a standstill.
Salesmen can never live with one set of rules. They are always massaging the numbers and creating new rules and incentives. That’s just the way it is.
June 21, 2012 at 3:57 PM #746218The-ShovelerParticipantI blame the Euro…
I think the only problem is everyone is still conditioned at some level to expect wage inflation, only it never seems to happen anymore for most.
From the 60’s until about the time the euro was created in January 1999 or so there was anything form high to very high inflation (+5% at least)
So I blame the Euro…
Poor Spain, tied to the dollar until 2002 they were condition to expect high inflation,
In Spain it is almost impossible to walk away or declare bankruptcy.
What to do…June 21, 2012 at 6:23 PM #746222spdrunParticipantRegarding cars — the cash for clunkers porkulus program as well as lack of sales from 2008-10 reduced supply of good cheap used cars. So now poorer people are stuck with making payments to the company store. Yay for America!
Me, I’ll stick with my 1980s “classic clunker” (paid off, T.Y.V.D.M.) for as long as it runs well. Then pick up another used car for $3k, fix it up, drive, sell at a profit, lather, rinse repeat.
As far as new cars, the only ones I’d consider would be Prius, FT86, Honda Fit, or Fiat 500, not necessarily in that order. The rest (out of US market cars) are mostly bloated oink-oinks.
June 21, 2012 at 7:25 PM #746227scaredyclassicParticipantStill, good credit for the best rates is worth a lot.
June 22, 2012 at 8:48 AM #746237SD RealtorParticipantFLU solved the problem in his very first line…
“How about just giving even more cheap credit to well qualified borrowers? We’ll clean up this mess by buying…”
Plain and simple.
If there were no loan mods, and all of the foreclosures could have happened in a normal manner, and cheap credit would have been available to those who were REALLY QUALIFIED then we would:
— Have a much healthier market.
— Seen all that distressed inventory get absorbed
— Let the housing market operate more freely.
— Rewarded those who have saved money and been prudent with fantastic real estate opportunities.
— Formed a much more solid foundation for the entire housing market.This would have been a back to the basics policy where owning a home was not considered an entitlement but rather a reward that was earned.
June 22, 2012 at 9:12 AM #746238CoronitaParticipant[quote=SD Realtor]FLU solved the problem in his very first line…
“How about just giving even more cheap credit to well qualified borrowers? We’ll clean up this mess by buying…”
Plain and simple.
If there were no loan mods, and all of the foreclosures could have happened in a normal manner, and cheap credit would have been available to those who were REALLY QUALIFIED then we would:
— Have a much healthier market.
— Seen all that distressed inventory get absorbed
— Let the housing market operate more freely.
— Rewarded those who have saved money and been prudent with fantastic real estate opportunities.
— Formed a much more solid foundation for the entire housing market.This would have been a back to the basics policy where owning a home was not considered an entitlement but rather a reward that was earned.[/quote]
But oh no. that won’t happen. That would be too “elitist”. That would make rich people richer and poor people poorer. That wouldn’t be “fair”. So we should give out good money to people with bad credit, since people with good credit can fend for themselves. By golly, everyone should be entitled to driving a new car. Everyone deserves to “own” a home..And when people get behind in payments…That’s ok. We’ll just re-modify the contracts…Because we can…Because if you can earn/save a dollar, you shouldn’t need help from the government. But if you can’t manage/save a dollar, we (the government) will give you one anyway…So that it’s “fair”….
Sincerely,
The Government of the new United Socialist of America.
June 23, 2012 at 5:39 PM #746335CA renterParticipant[quote=SD Realtor]FLU solved the problem in his very first line…
“How about just giving even more cheap credit to well qualified borrowers? We’ll clean up this mess by buying…”
Plain and simple.
If there were no loan mods, and all of the foreclosures could have happened in a normal manner, and cheap credit would have been available to those who were REALLY QUALIFIED then we would:
— Have a much healthier market.
— Seen all that distressed inventory get absorbed
— Let the housing market operate more freely.
— Rewarded those who have saved money and been prudent with fantastic real estate opportunities.
— Formed a much more solid foundation for the entire housing market.This would have been a back to the basics policy where owning a home was not considered an entitlement but rather a reward that was earned.[/quote]
Bingo.
June 23, 2012 at 5:46 PM #746336CA renterParticipant[quote=flu]
But oh no. that won’t happen. That would be too “elitist”. That would make rich people richer and poor people poorer. That wouldn’t be “fair”. So we should give out good money to people with bad credit, since people with good credit can fend for themselves. By golly, everyone should be entitled to driving a new car. Everyone deserves to “own” a home..And when people get behind in payments…That’s ok. We’ll just re-modify the contracts…Because we can…Because if you can earn/save a dollar, you shouldn’t need help from the government. But if you can’t manage/save a dollar, we (the government) will give you one anyway…So that it’s “fair”….
Sincerely,
The Government of the new United Socialist of America.[/quote]
I see it differently. Right now, if an FB is underwater on their house, and they owe tons of money on credit cards, etc., their net worth is well into negative territory. By foreclosing on them and possibly allowing/encouraging them to declare BK, we would have increased their net worth by hundreds of thousands of dollars, literally within a few months.
One condition: we must not bail their creditors out. We must do everything possible to discourage loose consumer lending in the future, IMHO. That is what gets so many people into trouble, and it pushes up prices for *everyone,* including those who try to live debt-free.
Too many people don’t seem to understand that the best thing that can happen to hopeless debtors is foreclosure and bankruptcy. It would pave the way to a healthier economy going forward. As it stands, after all the bailouts, etc., we have simply added even more debt to our system, which is the exact opposite of what it will take to fix our economy.
June 23, 2012 at 5:58 PM #746337spdrunParticipantWhat about just doing a short sale, with the agreement that there would be no damage to credit? Everyone wins. Bank gets more money than foreclosure, the debtor keeps their credit intact, and some investor or homeowner gets a decent deal.
June 24, 2012 at 8:56 AM #746354carlsbadworkerParticipant[quote=flu]
The Government of the new United Socialist of America.[/quote]Well, the fact is people with good credits are doing much better relatively already. I don’t think making some kind wealth re-distribution is wrong…because life is a balance between choice and luck.
[img_assist|nid=16362|title=Credit|desc=|link=node|align=left|width=100|height=68]
-
AuthorPosts
- You must be logged in to reply to this topic.