cawireman

This is sad but true.

A brainless homeowner facing foreclosure with negative equity has more power right now and is deemed more successful than a responsible renter/saver with over $100k in the bank, and yet they may be getting even more free hand outs and assistance by either the gov., wall street, banks, or any other area of private sector to help keep them in their homes.

What does that tell you about our economy/society/gov.?

As much as I expected to start seeing stuff like this happening, I still don’t like it. People are basically getting rewarded for being stupid and unable to comprehend documents that they sign.

However, I don’t think that these bailouts will be enough to stop the housing decline. It will still happen, but it will be slow. The lenders can mitigate some of the damage, but not near all. We are reading about people who had decent income and were able to be saved. I still would bet that a lot of people are or will soon be beyond hope.

How is someone, who quit a good job, jumped into the mortgage/re business near the peak and leveraged themselves to the hilt to buy a house they have no chance of affording, really going to be able to afford an 800k house? No matter what the terms, it just won’t work. The only things reworking the loan can do is 1) delaying the inevitable foreclosure or 2) giving them some BS 50,60,70 year loan, effectively making them an indentured servant to their lender.

Groups demand foreclosure moratorium http://www.chron.com/disp/story.mpl/business/4689460.html NEW YORK — Civil rights groups called Wednesday for a six-month moratorium on foreclosures resulting from high-risk loans given to people with shaky credit, arguing that lenders should help borrowers refinance their mortgages or face lawsuits. A coalition of advocacy groups said mortgage lenders should immediately halt foreclosures on so-called subprime mortgage loans made at high-interest rates to people with weak credit histories. The groups, at a news conference in Washington, D.C., said a predicted wave of foreclosures stems from "reckless and unaffordable loans" for which investors bear some responsibility. They also said lenders, real estate agents and investors who bought subprime loans could face lawsuits under a federal law prohibiting housing discrimination. Lenders, they said, should help homeowners affected by the problems in the high-risk mortgage market by allowing them to refinance their mortgages. "We know that there are safe and affordable loans that meet the needs of our communities," said Janet Murguia, president of the National Council of La Raza, the nation's largest Hispanic civil rights group. "We are calling on them to match families to the sustainable loans that they should have gotten in the first place. … There are homes of families that can be salvaged." John Robbins, chairman of the Mortgage Bankers Association, said many lenders are setting up payment plans to help avoid foreclosures among borrowers, many of whom have a hard time qualifying for refinancing. James Ballentine, director of housing and economic development at the American Bankers Association, said the call for a moratorium is an "overreaction" to problems in the mortgage market. He said there are many reasons borrowers default — including medical bills and the loss of jobs — that don't necessarily mean a lender took advantage of them. The advocacy groups said high-interest-rate subprime loans harm black and Hispanic home buyers the most, citing data from 2005 showing that subprime loans represented more than 50 percent of all mortgages taken out by black borrowers and 40 percent of Latino borrowers, compared with 19 percent of white borrowers.

These kind of games will continue until we abolish the Federal Reserve and re-instate Constitutional money which is gold and silver ONLY.

I wouldn’t worry too much about this, at best its only going to save those that are only marginally over-leveraged.

And its not going to keep the bubble going, the worst case scenario is a soft landing somewhere over whatever the ‘true’ bottom would be if these folks lost their homes.

Rewriting a mortgage into conventional terms will only help a small number of borrowers. Those who lied about income to get loans on properties they could never have afforded otherwise are beyond help.

Personally, I think there are a lot more of the latter (the liars), than the former (the honest). So I HOPE the lenders who wrote those loans throw more good money after bad; it will hasten their own demise and flush them from the market for good.

It is true that the politicians, bankers, homeowners (who borrowed) are on the same side. The only way they can come out winners is to inflate the US currency. The buyers of the mortgage bonds are the biggest losers. They are the only thing between the US govt bailout of these sub-prime borrowers.

The question to fellow boarders is what do with cash. I have lots of them.