More Federal Intervention to Prevent Foreclosures

[SD Realtor]

Counselor characterized the result best. This is simply adding order (at huge taxpayer expense) and yes (it appears to hell with moral hazard)…

From a practical perspective show me anyone in the government who is not pulling for this.

Anybody? Does anyone have any names?

This post was not meant to say that this will prop things up at all. Yet to think that this will not affect the depreciation cycle at all is a true fallacy. In my opinion it creates a huge moral hazard but haven’t we already breeched that levy? I mean come on now let’s be practical. I was hopeful that by now we would have already seen several lawsuits challenging these workouts and I haven’t seen or heard of a single one!

Huckleberry, go to the links I posted. Go read about this FDIC chairperson. Let me tell you something my friend, if it was up to Barney Frank HELL YES the maid would get to stay in the damn home.

What sort of backlash will there be? Well let’s see, we have recently seen our congress pass a bill that was rejected by a SUBSTANTIAL majority of the population. Doesn’t appear to me that backlash is really on anyones mind right now. There is a short sale right near me in Scripps on Chardonay. The guy has a freeking 30 foot boat right in front of the house along with his RV. I WISH there would be a backlash and frankly I am amazed there has not been.

Regarding the recession, yes I believe, as I have said, that it will act as a major counter balance. Yet REGARDLESS of who is president, it is in no way inconceivable to me that there could be federal intervention to laid off individuals that they cannot lose thier homes.

Tell me, would this surprise you?

The only surprise to me is that there is still this belief by many people here that things like moral hazard will prevent the government from taking any steps. That the government will or will not do something in the interest of the people. That is so far from the real agenda of the government that it is almost laughable.

There is not any question whether this is right or wrong morally, or whether this will help or hurt pricing… It doesn’t matter. It is what will happen. It will reduce the foreclosure inventory. It will NOT halt the cycle but it WILL change the cycle.

(and yes these people don’t get write downs or rate mods for free. any profits I believe go back to the government or entity that provided the relief)

[Huckleberry]

Yep, I read them and these are the statements that make me highly doubtful:

“It’s unclear if the program has yielded results thus far, although most industry insiders that spoke with HW remain skeptical; investors are also watching closely, to determine what the modification effort will mean for their investments.”

“If the FDIC follows its stated plan, which is to maximize loan value or recovery value, a good chunk of these mods won’t go through anyway, despite the press given to it,” one senior banking official told HW last month, when the plan was announced. “The FDIC will find out what every other servicer already knows: for one thing, the majority of borrowers will simply ignore the offer. For another, those that do step up will give credible proof that they cannot afford their homes unless the FDIC were to undercut home value by 40 or 50 percent from current levels.”

Read here and you will clearly see more of my point:
http://mrmortgage.ml-implode.com/2008/10/23/40-billion-foreclosure-assistance-not-even-close/

They can keep throwing money and new policies at this problem and it still will not abate…

[Huckleberry]

Yep, I read them and these are the statements that make me highly doubtful:

“It’s unclear if the program has yielded results thus far, although most industry insiders that spoke with HW remain skeptical; investors are also watching closely, to determine what the modification effort will mean for their investments.”

“If the FDIC follows its stated plan, which is to maximize loan value or recovery value, a good chunk of these mods won’t go through anyway, despite the press given to it,” one senior banking official told HW last month, when the plan was announced. “The FDIC will find out what every other servicer already knows: for one thing, the majority of borrowers will simply ignore the offer. For another, those that do step up will give credible proof that they cannot afford their homes unless the FDIC were to undercut home value by 40 or 50 percent from current levels.”

Read here and you will clearly see more of my point:
http://mrmortgage.ml-implode.com/2008/10/23/40-billion-foreclosure-assistance-not-even-close/

They can keep throwing money and new policies at this problem and it still will not abate…

[Huckleberry]

Yep, I read them and these are the statements that make me highly doubtful:

“It’s unclear if the program has yielded results thus far, although most industry insiders that spoke with HW remain skeptical; investors are also watching closely, to determine what the modification effort will mean for their investments.”

“If the FDIC follows its stated plan, which is to maximize loan value or recovery value, a good chunk of these mods won’t go through anyway, despite the press given to it,” one senior banking official told HW last month, when the plan was announced. “The FDIC will find out what every other servicer already knows: for one thing, the majority of borrowers will simply ignore the offer. For another, those that do step up will give credible proof that they cannot afford their homes unless the FDIC were to undercut home value by 40 or 50 percent from current levels.”

Read here and you will clearly see more of my point:
http://mrmortgage.ml-implode.com/2008/10/23/40-billion-foreclosure-assistance-not-even-close/

They can keep throwing money and new policies at this problem and it still will not abate…

[Huckleberry]

Yep, I read them and these are the statements that make me highly doubtful:

“It’s unclear if the program has yielded results thus far, although most industry insiders that spoke with HW remain skeptical; investors are also watching closely, to determine what the modification effort will mean for their investments.”

“If the FDIC follows its stated plan, which is to maximize loan value or recovery value, a good chunk of these mods won’t go through anyway, despite the press given to it,” one senior banking official told HW last month, when the plan was announced. “The FDIC will find out what every other servicer already knows: for one thing, the majority of borrowers will simply ignore the offer. For another, those that do step up will give credible proof that they cannot afford their homes unless the FDIC were to undercut home value by 40 or 50 percent from current levels.”

Read here and you will clearly see more of my point:
http://mrmortgage.ml-implode.com/2008/10/23/40-billion-foreclosure-assistance-not-even-close/

They can keep throwing money and new policies at this problem and it still will not abate…

[Huckleberry]

Yep, I read them and these are the statements that make me highly doubtful:

“It’s unclear if the program has yielded results thus far, although most industry insiders that spoke with HW remain skeptical; investors are also watching closely, to determine what the modification effort will mean for their investments.”

“If the FDIC follows its stated plan, which is to maximize loan value or recovery value, a good chunk of these mods won’t go through anyway, despite the press given to it,” one senior banking official told HW last month, when the plan was announced. “The FDIC will find out what every other servicer already knows: for one thing, the majority of borrowers will simply ignore the offer. For another, those that do step up will give credible proof that they cannot afford their homes unless the FDIC were to undercut home value by 40 or 50 percent from current levels.”

Read here and you will clearly see more of my point:
http://mrmortgage.ml-implode.com/2008/10/23/40-billion-foreclosure-assistance-not-even-close/

They can keep throwing money and new policies at this problem and it still will not abate…

[jpinpb]

If I’m to believe what I hear from various sources, including Mr. Mortgage, we’re looking at trillions and trillions that was pumped into the economy from about 2001 to 2007.

Can the government really rescue this crisis? Are they prepared to throw trillions into this?

Another thing: This economy was booming until recently. It went from the dotcom to real estate. Please consider everything that boosted our economy, b/c it was related in one way or another to real estate.

What will make our economy flourish again? We have to make our economy grow. What will create jobs that will replace the job losses in real estate and provide money that the ATM house machines were once dispensing?

[jpinpb]

If I’m to believe what I hear from various sources, including Mr. Mortgage, we’re looking at trillions and trillions that was pumped into the economy from about 2001 to 2007.

Can the government really rescue this crisis? Are they prepared to throw trillions into this?

Another thing: This economy was booming until recently. It went from the dotcom to real estate. Please consider everything that boosted our economy, b/c it was related in one way or another to real estate.

What will make our economy flourish again? We have to make our economy grow. What will create jobs that will replace the job losses in real estate and provide money that the ATM house machines were once dispensing?

[jpinpb]

If I’m to believe what I hear from various sources, including Mr. Mortgage, we’re looking at trillions and trillions that was pumped into the economy from about 2001 to 2007.

Can the government really rescue this crisis? Are they prepared to throw trillions into this?

Another thing: This economy was booming until recently. It went from the dotcom to real estate. Please consider everything that boosted our economy, b/c it was related in one way or another to real estate.

What will make our economy flourish again? We have to make our economy grow. What will create jobs that will replace the job losses in real estate and provide money that the ATM house machines were once dispensing?

[jpinpb]

If I’m to believe what I hear from various sources, including Mr. Mortgage, we’re looking at trillions and trillions that was pumped into the economy from about 2001 to 2007.

Can the government really rescue this crisis? Are they prepared to throw trillions into this?

Another thing: This economy was booming until recently. It went from the dotcom to real estate. Please consider everything that boosted our economy, b/c it was related in one way or another to real estate.

What will make our economy flourish again? We have to make our economy grow. What will create jobs that will replace the job losses in real estate and provide money that the ATM house machines were once dispensing?

[jpinpb]

If I’m to believe what I hear from various sources, including Mr. Mortgage, we’re looking at trillions and trillions that was pumped into the economy from about 2001 to 2007.

Can the government really rescue this crisis? Are they prepared to throw trillions into this?

Another thing: This economy was booming until recently. It went from the dotcom to real estate. Please consider everything that boosted our economy, b/c it was related in one way or another to real estate.

What will make our economy flourish again? We have to make our economy grow. What will create jobs that will replace the job losses in real estate and provide money that the ATM house machines were once dispensing?

[Huckleberry]

[quote=jpinpb]If I’m to believe what I hear from various sources, including Mr. Mortgage, we’re looking at trillions and trillions that was pumped into the economy from about 2001 to 2007.

Can the government really rescue this crisis? Are they prepared to throw trillions into this?

Another thing: This economy was booming until recently. It went from the dotcom to real estate. Please consider everything that boosted our economy, b/c it was related in one way or another to real estate.

What will make our economy flourish again? We have to make our economy grow. What will create jobs that will replace the job losses in real estate and provide money that the ATM house machines were once dispensing?[/quote]

Agreed. Even if there are a plethora of govt programs to stem foreclosures and keep people in their homes, 45% of people (quote from Freddie Mac) don’t even want a “workout” unless it will give them positive equity in their home. They are walking even when the GSE is trying to help them. This is the case with the banks too.

If they can’t feel wealth from their home, they don’t have any incentive to stay in them.

Even if the govt does enact any or all of these new programs, they won’t be around for very long once they figure out that people are taking the write down and still walking away, inevitably foreclosing.

Until housing comes back to equilibrium with incomes, foreclosures are going to keep rolling, unless of course they pass new policies that force more “creative” mortgage financing, which got us into this mess in the first place.

[Huckleberry]

[quote=jpinpb]If I’m to believe what I hear from various sources, including Mr. Mortgage, we’re looking at trillions and trillions that was pumped into the economy from about 2001 to 2007.

Can the government really rescue this crisis? Are they prepared to throw trillions into this?

Another thing: This economy was booming until recently. It went from the dotcom to real estate. Please consider everything that boosted our economy, b/c it was related in one way or another to real estate.

What will make our economy flourish again? We have to make our economy grow. What will create jobs that will replace the job losses in real estate and provide money that the ATM house machines were once dispensing?[/quote]

Agreed. Even if there are a plethora of govt programs to stem foreclosures and keep people in their homes, 45% of people (quote from Freddie Mac) don’t even want a “workout” unless it will give them positive equity in their home. They are walking even when the GSE is trying to help them. This is the case with the banks too.

If they can’t feel wealth from their home, they don’t have any incentive to stay in them.

Even if the govt does enact any or all of these new programs, they won’t be around for very long once they figure out that people are taking the write down and still walking away, inevitably foreclosing.

Until housing comes back to equilibrium with incomes, foreclosures are going to keep rolling, unless of course they pass new policies that force more “creative” mortgage financing, which got us into this mess in the first place.

[Huckleberry]

[quote=jpinpb]If I’m to believe what I hear from various sources, including Mr. Mortgage, we’re looking at trillions and trillions that was pumped into the economy from about 2001 to 2007.

Can the government really rescue this crisis? Are they prepared to throw trillions into this?

Another thing: This economy was booming until recently. It went from the dotcom to real estate. Please consider everything that boosted our economy, b/c it was related in one way or another to real estate.

What will make our economy flourish again? We have to make our economy grow. What will create jobs that will replace the job losses in real estate and provide money that the ATM house machines were once dispensing?[/quote]

Agreed. Even if there are a plethora of govt programs to stem foreclosures and keep people in their homes, 45% of people (quote from Freddie Mac) don’t even want a “workout” unless it will give them positive equity in their home. They are walking even when the GSE is trying to help them. This is the case with the banks too.

If they can’t feel wealth from their home, they don’t have any incentive to stay in them.

Even if the govt does enact any or all of these new programs, they won’t be around for very long once they figure out that people are taking the write down and still walking away, inevitably foreclosing.

Until housing comes back to equilibrium with incomes, foreclosures are going to keep rolling, unless of course they pass new policies that force more “creative” mortgage financing, which got us into this mess in the first place.

[Huckleberry]

[quote=jpinpb]If I’m to believe what I hear from various sources, including Mr. Mortgage, we’re looking at trillions and trillions that was pumped into the economy from about 2001 to 2007.

Can the government really rescue this crisis? Are they prepared to throw trillions into this?

Another thing: This economy was booming until recently. It went from the dotcom to real estate. Please consider everything that boosted our economy, b/c it was related in one way or another to real estate.

What will make our economy flourish again? We have to make our economy grow. What will create jobs that will replace the job losses in real estate and provide money that the ATM house machines were once dispensing?[/quote]

Agreed. Even if there are a plethora of govt programs to stem foreclosures and keep people in their homes, 45% of people (quote from Freddie Mac) don’t even want a “workout” unless it will give them positive equity in their home. They are walking even when the GSE is trying to help them. This is the case with the banks too.

If they can’t feel wealth from their home, they don’t have any incentive to stay in them.

Even if the govt does enact any or all of these new programs, they won’t be around for very long once they figure out that people are taking the write down and still walking away, inevitably foreclosing.

Until housing comes back to equilibrium with incomes, foreclosures are going to keep rolling, unless of course they pass new policies that force more “creative” mortgage financing, which got us into this mess in the first place.

[Author]

Posts