10 Million Homeowners Have Incentives to Walk

[peterb]

Walk aways will be the real killer. Unemployed, have to relocate or just plain pissed-off that Wall street was bailed out by Washington and they werent. Who wouldnt walk away. If nothing more than a political statement…Let’s all get ours!! Wall Street bought Washington and got theirs!

Set the market free. Bring the pain!!
It’s the average persons revenge on a corrupt system.

[Huckleberry]

[quote=temeculaguy]Has anyone ever read the fine print on principal write downs for current reworks, fdic run banks like indymac and the proposals floating in the legislature. They aren’t what you think, they don’t forgive the loan, they “write down” the loan for purposes of determining the payment but they don’t actually forgive it, when you sell, transfer or refi, they get that back. It’s a modified way to contnue a teaser rate or having a silent partner. The FHA sponsored stuff actually gives the forgiver their original money back and a cut of any profit. They also prohibit helocs, forever.

It will keep a roof over your head but that is about it. Let’s see, you pay someone a mortgage payment and when you leave, you get nothing, that smells a lot like renting except you get a tax deduction yet pay a higher payment over rent. Here is a scenario, FB pays 600k zero down, neg am, balance is 625 and enter some write down program. Their mort should have gone from 2800 to 5000 but the rework bases the loan on the current value of 350k and they pay about 2500 piti, usually .38 of their income in typical reworks. Then after ten years, they have paid down about 50k, price comes back to 650, after realtor fees and closing they clear 600, principal is 300k and rework holdback is 275k, lender gets the 575k in it’s entirety and they walk with 25k for ten years of paying too much for rent and all the maintenance. That is if it gets back to 650k. If it goes to 750k, bank gets half of the 100k profit, which offsets ten years of no interest on the 275k and the borrower walks with 75k but houses cost 750k.

It would actually be better to walk away or buy a place for 350k, walk away from the old and when and if things return just like the previous scenario, you are up 250-350k after fees. Or just walk away, rent for a year or two, buy a 350k house with fha 3 1/2 down and reap the actual rewards. Reworks are debtors prisons, much better for the lender than the fb, and that is why it wont work. So don’t get your panties in a bunch about all this forgiveness.[/quote]

Thank you for posting this!

I am okay with this type of mod. as it does not reward poor decision making or fraudulent behavior.

It will motivate a distressed owners to sell, or walk….

[Huckleberry]

[quote=temeculaguy]Has anyone ever read the fine print on principal write downs for current reworks, fdic run banks like indymac and the proposals floating in the legislature. They aren’t what you think, they don’t forgive the loan, they “write down” the loan for purposes of determining the payment but they don’t actually forgive it, when you sell, transfer or refi, they get that back. It’s a modified way to contnue a teaser rate or having a silent partner. The FHA sponsored stuff actually gives the forgiver their original money back and a cut of any profit. They also prohibit helocs, forever.

It will keep a roof over your head but that is about it. Let’s see, you pay someone a mortgage payment and when you leave, you get nothing, that smells a lot like renting except you get a tax deduction yet pay a higher payment over rent. Here is a scenario, FB pays 600k zero down, neg am, balance is 625 and enter some write down program. Their mort should have gone from 2800 to 5000 but the rework bases the loan on the current value of 350k and they pay about 2500 piti, usually .38 of their income in typical reworks. Then after ten years, they have paid down about 50k, price comes back to 650, after realtor fees and closing they clear 600, principal is 300k and rework holdback is 275k, lender gets the 575k in it’s entirety and they walk with 25k for ten years of paying too much for rent and all the maintenance. That is if it gets back to 650k. If it goes to 750k, bank gets half of the 100k profit, which offsets ten years of no interest on the 275k and the borrower walks with 75k but houses cost 750k.

It would actually be better to walk away or buy a place for 350k, walk away from the old and when and if things return just like the previous scenario, you are up 250-350k after fees. Or just walk away, rent for a year or two, buy a 350k house with fha 3 1/2 down and reap the actual rewards. Reworks are debtors prisons, much better for the lender than the fb, and that is why it wont work. So don’t get your panties in a bunch about all this forgiveness.[/quote]

Thank you for posting this!

I am okay with this type of mod. as it does not reward poor decision making or fraudulent behavior.

It will motivate a distressed owners to sell, or walk….

[Huckleberry]

[quote=temeculaguy]Has anyone ever read the fine print on principal write downs for current reworks, fdic run banks like indymac and the proposals floating in the legislature. They aren’t what you think, they don’t forgive the loan, they “write down” the loan for purposes of determining the payment but they don’t actually forgive it, when you sell, transfer or refi, they get that back. It’s a modified way to contnue a teaser rate or having a silent partner. The FHA sponsored stuff actually gives the forgiver their original money back and a cut of any profit. They also prohibit helocs, forever.

It will keep a roof over your head but that is about it. Let’s see, you pay someone a mortgage payment and when you leave, you get nothing, that smells a lot like renting except you get a tax deduction yet pay a higher payment over rent. Here is a scenario, FB pays 600k zero down, neg am, balance is 625 and enter some write down program. Their mort should have gone from 2800 to 5000 but the rework bases the loan on the current value of 350k and they pay about 2500 piti, usually .38 of their income in typical reworks. Then after ten years, they have paid down about 50k, price comes back to 650, after realtor fees and closing they clear 600, principal is 300k and rework holdback is 275k, lender gets the 575k in it’s entirety and they walk with 25k for ten years of paying too much for rent and all the maintenance. That is if it gets back to 650k. If it goes to 750k, bank gets half of the 100k profit, which offsets ten years of no interest on the 275k and the borrower walks with 75k but houses cost 750k.

It would actually be better to walk away or buy a place for 350k, walk away from the old and when and if things return just like the previous scenario, you are up 250-350k after fees. Or just walk away, rent for a year or two, buy a 350k house with fha 3 1/2 down and reap the actual rewards. Reworks are debtors prisons, much better for the lender than the fb, and that is why it wont work. So don’t get your panties in a bunch about all this forgiveness.[/quote]

Thank you for posting this!

I am okay with this type of mod. as it does not reward poor decision making or fraudulent behavior.

It will motivate a distressed owners to sell, or walk….

[Huckleberry]

[quote=temeculaguy]Has anyone ever read the fine print on principal write downs for current reworks, fdic run banks like indymac and the proposals floating in the legislature. They aren’t what you think, they don’t forgive the loan, they “write down” the loan for purposes of determining the payment but they don’t actually forgive it, when you sell, transfer or refi, they get that back. It’s a modified way to contnue a teaser rate or having a silent partner. The FHA sponsored stuff actually gives the forgiver their original money back and a cut of any profit. They also prohibit helocs, forever.

It will keep a roof over your head but that is about it. Let’s see, you pay someone a mortgage payment and when you leave, you get nothing, that smells a lot like renting except you get a tax deduction yet pay a higher payment over rent. Here is a scenario, FB pays 600k zero down, neg am, balance is 625 and enter some write down program. Their mort should have gone from 2800 to 5000 but the rework bases the loan on the current value of 350k and they pay about 2500 piti, usually .38 of their income in typical reworks. Then after ten years, they have paid down about 50k, price comes back to 650, after realtor fees and closing they clear 600, principal is 300k and rework holdback is 275k, lender gets the 575k in it’s entirety and they walk with 25k for ten years of paying too much for rent and all the maintenance. That is if it gets back to 650k. If it goes to 750k, bank gets half of the 100k profit, which offsets ten years of no interest on the 275k and the borrower walks with 75k but houses cost 750k.

It would actually be better to walk away or buy a place for 350k, walk away from the old and when and if things return just like the previous scenario, you are up 250-350k after fees. Or just walk away, rent for a year or two, buy a 350k house with fha 3 1/2 down and reap the actual rewards. Reworks are debtors prisons, much better for the lender than the fb, and that is why it wont work. So don’t get your panties in a bunch about all this forgiveness.[/quote]

Thank you for posting this!

I am okay with this type of mod. as it does not reward poor decision making or fraudulent behavior.

It will motivate a distressed owners to sell, or walk….

[Huckleberry]

[quote=temeculaguy]Has anyone ever read the fine print on principal write downs for current reworks, fdic run banks like indymac and the proposals floating in the legislature. They aren’t what you think, they don’t forgive the loan, they “write down” the loan for purposes of determining the payment but they don’t actually forgive it, when you sell, transfer or refi, they get that back. It’s a modified way to contnue a teaser rate or having a silent partner. The FHA sponsored stuff actually gives the forgiver their original money back and a cut of any profit. They also prohibit helocs, forever.

It will keep a roof over your head but that is about it. Let’s see, you pay someone a mortgage payment and when you leave, you get nothing, that smells a lot like renting except you get a tax deduction yet pay a higher payment over rent. Here is a scenario, FB pays 600k zero down, neg am, balance is 625 and enter some write down program. Their mort should have gone from 2800 to 5000 but the rework bases the loan on the current value of 350k and they pay about 2500 piti, usually .38 of their income in typical reworks. Then after ten years, they have paid down about 50k, price comes back to 650, after realtor fees and closing they clear 600, principal is 300k and rework holdback is 275k, lender gets the 575k in it’s entirety and they walk with 25k for ten years of paying too much for rent and all the maintenance. That is if it gets back to 650k. If it goes to 750k, bank gets half of the 100k profit, which offsets ten years of no interest on the 275k and the borrower walks with 75k but houses cost 750k.

It would actually be better to walk away or buy a place for 350k, walk away from the old and when and if things return just like the previous scenario, you are up 250-350k after fees. Or just walk away, rent for a year or two, buy a 350k house with fha 3 1/2 down and reap the actual rewards. Reworks are debtors prisons, much better for the lender than the fb, and that is why it wont work. So don’t get your panties in a bunch about all this forgiveness.[/quote]

Thank you for posting this!

I am okay with this type of mod. as it does not reward poor decision making or fraudulent behavior.

It will motivate a distressed owners to sell, or walk….

[CA renter]

I agree with these kinds of modifications (actually wrote a series of letters to legislators, Federal Reserve, Treasury, Barney Frank, etc. about a year ago with this recommendation).

Why? Because the borrowers should not be able to STEAL hundreds of thousands of dollars from the lenders without any repercussions. Additionally, lenders will be FAR more prudent in the future if they are expected to take the risk of these losses in the event the FB sells at a price that is lower than the original loan. Lending standards would rightly be tighter, and prices (which are determined by future buyers, not current sellers) will drop to affordable levels.

My only concern is that the lenders have been hesitant to go along with this principal reduction program, and I believe this is the REAL reason behind the bailout.

According to the bailout bill, Treasury is allowed to modify mortgages — including principal reductions — and I fear it will be the taxpayer, not the lender, who will end up eating the losses.

Both lenders and borrowers were at fault for their current situation, and both should have to suffer the consequences of their actions. This is ultimately why I am opposed to the bailout. They will try to make both borrowers and lenders whole at our (responsible taxpayers’) expense.

[CA renter]

I agree with these kinds of modifications (actually wrote a series of letters to legislators, Federal Reserve, Treasury, Barney Frank, etc. about a year ago with this recommendation).

Why? Because the borrowers should not be able to STEAL hundreds of thousands of dollars from the lenders without any repercussions. Additionally, lenders will be FAR more prudent in the future if they are expected to take the risk of these losses in the event the FB sells at a price that is lower than the original loan. Lending standards would rightly be tighter, and prices (which are determined by future buyers, not current sellers) will drop to affordable levels.

My only concern is that the lenders have been hesitant to go along with this principal reduction program, and I believe this is the REAL reason behind the bailout.

According to the bailout bill, Treasury is allowed to modify mortgages — including principal reductions — and I fear it will be the taxpayer, not the lender, who will end up eating the losses.

Both lenders and borrowers were at fault for their current situation, and both should have to suffer the consequences of their actions. This is ultimately why I am opposed to the bailout. They will try to make both borrowers and lenders whole at our (responsible taxpayers’) expense.

[CA renter]

I agree with these kinds of modifications (actually wrote a series of letters to legislators, Federal Reserve, Treasury, Barney Frank, etc. about a year ago with this recommendation).

Why? Because the borrowers should not be able to STEAL hundreds of thousands of dollars from the lenders without any repercussions. Additionally, lenders will be FAR more prudent in the future if they are expected to take the risk of these losses in the event the FB sells at a price that is lower than the original loan. Lending standards would rightly be tighter, and prices (which are determined by future buyers, not current sellers) will drop to affordable levels.

My only concern is that the lenders have been hesitant to go along with this principal reduction program, and I believe this is the REAL reason behind the bailout.

According to the bailout bill, Treasury is allowed to modify mortgages — including principal reductions — and I fear it will be the taxpayer, not the lender, who will end up eating the losses.

Both lenders and borrowers were at fault for their current situation, and both should have to suffer the consequences of their actions. This is ultimately why I am opposed to the bailout. They will try to make both borrowers and lenders whole at our (responsible taxpayers’) expense.

[CA renter]

I agree with these kinds of modifications (actually wrote a series of letters to legislators, Federal Reserve, Treasury, Barney Frank, etc. about a year ago with this recommendation).

Why? Because the borrowers should not be able to STEAL hundreds of thousands of dollars from the lenders without any repercussions. Additionally, lenders will be FAR more prudent in the future if they are expected to take the risk of these losses in the event the FB sells at a price that is lower than the original loan. Lending standards would rightly be tighter, and prices (which are determined by future buyers, not current sellers) will drop to affordable levels.

My only concern is that the lenders have been hesitant to go along with this principal reduction program, and I believe this is the REAL reason behind the bailout.

According to the bailout bill, Treasury is allowed to modify mortgages — including principal reductions — and I fear it will be the taxpayer, not the lender, who will end up eating the losses.

Both lenders and borrowers were at fault for their current situation, and both should have to suffer the consequences of their actions. This is ultimately why I am opposed to the bailout. They will try to make both borrowers and lenders whole at our (responsible taxpayers’) expense.

[CA renter]

I agree with these kinds of modifications (actually wrote a series of letters to legislators, Federal Reserve, Treasury, Barney Frank, etc. about a year ago with this recommendation).

Why? Because the borrowers should not be able to STEAL hundreds of thousands of dollars from the lenders without any repercussions. Additionally, lenders will be FAR more prudent in the future if they are expected to take the risk of these losses in the event the FB sells at a price that is lower than the original loan. Lending standards would rightly be tighter, and prices (which are determined by future buyers, not current sellers) will drop to affordable levels.

My only concern is that the lenders have been hesitant to go along with this principal reduction program, and I believe this is the REAL reason behind the bailout.

According to the bailout bill, Treasury is allowed to modify mortgages — including principal reductions — and I fear it will be the taxpayer, not the lender, who will end up eating the losses.

Both lenders and borrowers were at fault for their current situation, and both should have to suffer the consequences of their actions. This is ultimately why I am opposed to the bailout. They will try to make both borrowers and lenders whole at our (responsible taxpayers’) expense.

[Huckleberry]

I heard on CNBC this morning that ten different industry groups got together and signed a letter to Congress stating the urgency to supplement/augment the IndyMac/FDIC home loan rework programs.

They are stressing that without additional monies to actually support home prices, the bailout will not accomplish much, as home prices will continue to decline.

CNBC commentators actually agreed and stated they believe more home owner bailouts/house price stabilization provisions are on the way.

Is anyone hearing the same crap? I guess 700 billion isn’t enough of our tax dollars. We are now going to get gouged even more, to support housing prices and dumb ass purchasers.

[Huckleberry]

I heard on CNBC this morning that ten different industry groups got together and signed a letter to Congress stating the urgency to supplement/augment the IndyMac/FDIC home loan rework programs.

They are stressing that without additional monies to actually support home prices, the bailout will not accomplish much, as home prices will continue to decline.

CNBC commentators actually agreed and stated they believe more home owner bailouts/house price stabilization provisions are on the way.

Is anyone hearing the same crap? I guess 700 billion isn’t enough of our tax dollars. We are now going to get gouged even more, to support housing prices and dumb ass purchasers.

[Huckleberry]

I heard on CNBC this morning that ten different industry groups got together and signed a letter to Congress stating the urgency to supplement/augment the IndyMac/FDIC home loan rework programs.

They are stressing that without additional monies to actually support home prices, the bailout will not accomplish much, as home prices will continue to decline.

CNBC commentators actually agreed and stated they believe more home owner bailouts/house price stabilization provisions are on the way.

Is anyone hearing the same crap? I guess 700 billion isn’t enough of our tax dollars. We are now going to get gouged even more, to support housing prices and dumb ass purchasers.

[Huckleberry]

I heard on CNBC this morning that ten different industry groups got together and signed a letter to Congress stating the urgency to supplement/augment the IndyMac/FDIC home loan rework programs.

They are stressing that without additional monies to actually support home prices, the bailout will not accomplish much, as home prices will continue to decline.

CNBC commentators actually agreed and stated they believe more home owner bailouts/house price stabilization provisions are on the way.

Is anyone hearing the same crap? I guess 700 billion isn’t enough of our tax dollars. We are now going to get gouged even more, to support housing prices and dumb ass purchasers.

[Author]

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