Intentional defaulting, not subprime mortgage is the problem

[wannabe2077]

Increase 7 year credit record history to 14 years. Pass a law saying Fannie Mae can’t buy loans from people who have defaulted on home loans within the past 14 years. It should get people’s attention.

[CA renter]

Solution to the problem:

Higher down payments
————————

-No new taxes or increased debt burden for taxpayers
-No profits to lenders who don’t properly value collateral or verify a borrower’s ability/willingness to repay debt
-No windfall gifts to deadbeat borrowers.

It really is that simple.

[CA renter]

Solution to the problem:

Higher down payments
————————

-No new taxes or increased debt burden for taxpayers
-No profits to lenders who don’t properly value collateral or verify a borrower’s ability/willingness to repay debt
-No windfall gifts to deadbeat borrowers.

It really is that simple.

[CA renter]

Solution to the problem:

Higher down payments
————————

-No new taxes or increased debt burden for taxpayers
-No profits to lenders who don’t properly value collateral or verify a borrower’s ability/willingness to repay debt
-No windfall gifts to deadbeat borrowers.

It really is that simple.

[CA renter]

Solution to the problem:

Higher down payments
————————

-No new taxes or increased debt burden for taxpayers
-No profits to lenders who don’t properly value collateral or verify a borrower’s ability/willingness to repay debt
-No windfall gifts to deadbeat borrowers.

It really is that simple.

[CA renter]

Solution to the problem:

Higher down payments
————————

-No new taxes or increased debt burden for taxpayers
-No profits to lenders who don’t properly value collateral or verify a borrower’s ability/willingness to repay debt
-No windfall gifts to deadbeat borrowers.

It really is that simple.

[patientrenter]

[quote=CA renter]Solution to the problem:

Higher down payments
————————
[/quote]

I agree that, if we did only did one thing to avoid a repeat of the bubble, requiring much more real buyer money as a downpayment would be the right choice.

I don’t know what the right % is, but I am thinking 30%, with exceptions down to 20% if you pass a barrage of tests: you can prove that all the downpayment is yours or your immediate family’s; AND you can show that you will occupy the house as your main residence; AND the appraised value is the lesser of two completely independent appraisals, one of which is conservative, taking into account all sales, including REOs, short sales etc, and was conducted by an appraiser chosen by a representative of the ultimate investors. Regular fully public public audits of those conservative appraisals etc…

[patientrenter]

[quote=CA renter]Solution to the problem:

Higher down payments
————————
[/quote]

I agree that, if we did only did one thing to avoid a repeat of the bubble, requiring much more real buyer money as a downpayment would be the right choice.

I don’t know what the right % is, but I am thinking 30%, with exceptions down to 20% if you pass a barrage of tests: you can prove that all the downpayment is yours or your immediate family’s; AND you can show that you will occupy the house as your main residence; AND the appraised value is the lesser of two completely independent appraisals, one of which is conservative, taking into account all sales, including REOs, short sales etc, and was conducted by an appraiser chosen by a representative of the ultimate investors. Regular fully public public audits of those conservative appraisals etc…

[patientrenter]

[quote=CA renter]Solution to the problem:

Higher down payments
————————
[/quote]

I agree that, if we did only did one thing to avoid a repeat of the bubble, requiring much more real buyer money as a downpayment would be the right choice.

I don’t know what the right % is, but I am thinking 30%, with exceptions down to 20% if you pass a barrage of tests: you can prove that all the downpayment is yours or your immediate family’s; AND you can show that you will occupy the house as your main residence; AND the appraised value is the lesser of two completely independent appraisals, one of which is conservative, taking into account all sales, including REOs, short sales etc, and was conducted by an appraiser chosen by a representative of the ultimate investors. Regular fully public public audits of those conservative appraisals etc…

[patientrenter]

[quote=CA renter]Solution to the problem:

Higher down payments
————————
[/quote]

I agree that, if we did only did one thing to avoid a repeat of the bubble, requiring much more real buyer money as a downpayment would be the right choice.

I don’t know what the right % is, but I am thinking 30%, with exceptions down to 20% if you pass a barrage of tests: you can prove that all the downpayment is yours or your immediate family’s; AND you can show that you will occupy the house as your main residence; AND the appraised value is the lesser of two completely independent appraisals, one of which is conservative, taking into account all sales, including REOs, short sales etc, and was conducted by an appraiser chosen by a representative of the ultimate investors. Regular fully public public audits of those conservative appraisals etc…

[patientrenter]

[quote=CA renter]Solution to the problem:

Higher down payments
————————
[/quote]

I agree that, if we did only did one thing to avoid a repeat of the bubble, requiring much more real buyer money as a downpayment would be the right choice.

I don’t know what the right % is, but I am thinking 30%, with exceptions down to 20% if you pass a barrage of tests: you can prove that all the downpayment is yours or your immediate family’s; AND you can show that you will occupy the house as your main residence; AND the appraised value is the lesser of two completely independent appraisals, one of which is conservative, taking into account all sales, including REOs, short sales etc, and was conducted by an appraiser chosen by a representative of the ultimate investors. Regular fully public public audits of those conservative appraisals etc…

[toddt]

Many of the responses have focused on the how wrong the banks have been in all this, and that underwater homeowners are just making ‘business decisions’. I don’t have a problem with the line of thought, but it is misleading. The comparable ‘business decision’ everyone refers to would be bankruptcy not foreclosure.

Holding underwater homeowners responsible for debt is terrible policy if that is the only asset in question because it does amount to a servitude scenario and have little long-term positive results. I’d rather get them out of the situation, the home back on the market, and have a reformed debtor participating in our economy going forward. That’s what foreclosure is.

However, it is good policy to have recourse if there are other assets available. Bankruptcy should be the forced option here, including foreclosing on the home in question and taking an overall look at assets and liabilities to make a sound ‘business decision’ on the best plan.

Under our current laws, forced bankruptcy is not possible. That is, unless you are GM and Chrysler.

[toddt]

Many of the responses have focused on the how wrong the banks have been in all this, and that underwater homeowners are just making ‘business decisions’. I don’t have a problem with the line of thought, but it is misleading. The comparable ‘business decision’ everyone refers to would be bankruptcy not foreclosure.

Holding underwater homeowners responsible for debt is terrible policy if that is the only asset in question because it does amount to a servitude scenario and have little long-term positive results. I’d rather get them out of the situation, the home back on the market, and have a reformed debtor participating in our economy going forward. That’s what foreclosure is.

However, it is good policy to have recourse if there are other assets available. Bankruptcy should be the forced option here, including foreclosing on the home in question and taking an overall look at assets and liabilities to make a sound ‘business decision’ on the best plan.

Under our current laws, forced bankruptcy is not possible. That is, unless you are GM and Chrysler.

[toddt]

Many of the responses have focused on the how wrong the banks have been in all this, and that underwater homeowners are just making ‘business decisions’. I don’t have a problem with the line of thought, but it is misleading. The comparable ‘business decision’ everyone refers to would be bankruptcy not foreclosure.

Holding underwater homeowners responsible for debt is terrible policy if that is the only asset in question because it does amount to a servitude scenario and have little long-term positive results. I’d rather get them out of the situation, the home back on the market, and have a reformed debtor participating in our economy going forward. That’s what foreclosure is.

However, it is good policy to have recourse if there are other assets available. Bankruptcy should be the forced option here, including foreclosing on the home in question and taking an overall look at assets and liabilities to make a sound ‘business decision’ on the best plan.

Under our current laws, forced bankruptcy is not possible. That is, unless you are GM and Chrysler.

[toddt]

Many of the responses have focused on the how wrong the banks have been in all this, and that underwater homeowners are just making ‘business decisions’. I don’t have a problem with the line of thought, but it is misleading. The comparable ‘business decision’ everyone refers to would be bankruptcy not foreclosure.

Holding underwater homeowners responsible for debt is terrible policy if that is the only asset in question because it does amount to a servitude scenario and have little long-term positive results. I’d rather get them out of the situation, the home back on the market, and have a reformed debtor participating in our economy going forward. That’s what foreclosure is.

However, it is good policy to have recourse if there are other assets available. Bankruptcy should be the forced option here, including foreclosing on the home in question and taking an overall look at assets and liabilities to make a sound ‘business decision’ on the best plan.

Under our current laws, forced bankruptcy is not possible. That is, unless you are GM and Chrysler.

[Author]

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