[patb]

[quote=ucodegen][quote patb]
i hate to tell you this but for almost a 100 years Cramdown was part of law.
[/quote]
I’d be curious as to where you get that ‘fact’. Part of the differentiation between secured and unsecured loans is that with secured loans, unless their is fraud.. the lender walks away from bk with the property and the borrower is free and clear of the loan.. whether or not the lender is ‘made whole'(only exemption that I know of on this is under homestead act). If it is unsecured, the lender can go after other assets, including garnishing bank accounts, tax returns and wages.

There are some variants in some states, like New Mexico, where if the lender is not made whole, they can go after other assets (recourse vs nonrecourse). Of course, this may be ‘stayed’ under bk.. where the lender on the secured loan only gets the property and no more, even though they were not made whole.[/quote]

you are describing single action and recourse options under state law.

Cramdown was an option under chapter 11 to allow
individuals to force a rewrite of their mortgage.

http://financial-dictionary.thefreedictionary.com/Cramdown

[patb]

[quote=ucodegen][quote patb]
In a decent society, a bankruptcy judge would write the note down to the new value of 200K.
[/quote]
Why? It is a secured note. Someone fronted the 400K. If you want mortgage rates to go sky high, go ahead and do this. The people lending money will start demanding a higher interest rate to offset the risk of loss of capital. They will refuse to lend until they get this. Remember that the lenders only make about 72% over the life of the loan (not adjusting for inflation and assuming that they are the primary source of capital). If you are going to demand a 50% haircut from the lenders with the possibility of then getting 36% back for a total return of -14% over a 30 year period(about -0.5%/yr) vs their 72% for a 30 year (about 4%/yr). The result will be mortgage interest rates close to 8 or 9% because you are effectively taking a secured loan and making it unsecured… just like credit cards – whose balances can be written down.

I would LOVE to have all my ‘costs’ readjusted if the real price changes. Imagine that if a stock price goes down, I get some of my cash back because its real value is less!! NICE!!!

[quote patb]
yes it may not appeal to people but the
cramdown is the best outcome.
[/quote]
And what of moral hazard?[/quote]

UC

i hate to tell you this but for almost a 100 years Cramdown was part of law.

If there was cramdown, there would be serious
attention to making sure a deal has lots of equity

[patb]

[quote=ucodegen][quote patb]
In a decent society, a bankruptcy judge would write the note down to the new value of 200K.
[/quote]
Why? It is a secured note. Someone fronted the 400K. If you want mortgage rates to go sky high, go ahead and do this. The people lending money will start demanding a higher interest rate to offset the risk of loss of capital. They will refuse to lend until they get this. Remember that the lenders only make about 72% over the life of the loan (not adjusting for inflation and assuming that they are the primary source of capital). If you are going to demand a 50% haircut from the lenders with the possibility of then getting 36% back for a total return of -14% over a 30 year period(about -0.5%/yr) vs their 72% for a 30 year (about 4%/yr). The result will be mortgage interest rates close to 8 or 9% because you are effectively taking a secured loan and making it unsecured… just like credit cards – whose balances can be written down.

I would LOVE to have all my ‘costs’ readjusted if the real price changes. Imagine that if a stock price goes down, I get some of my cash back because its real value is less!! NICE!!!

[quote patb]
yes it may not appeal to people but the
cramdown is the best outcome.
[/quote]
And what of moral hazard?[/quote]

UC

i hate to tell you this but for almost a 100 years Cramdown was part of law.

If there was cramdown, there would be serious
attention to making sure a deal has lots of equity

[patb]

[quote=ucodegen][quote patb]
In a decent society, a bankruptcy judge would write the note down to the new value of 200K.
[/quote]
Why? It is a secured note. Someone fronted the 400K. If you want mortgage rates to go sky high, go ahead and do this. The people lending money will start demanding a higher interest rate to offset the risk of loss of capital. They will refuse to lend until they get this. Remember that the lenders only make about 72% over the life of the loan (not adjusting for inflation and assuming that they are the primary source of capital). If you are going to demand a 50% haircut from the lenders with the possibility of then getting 36% back for a total return of -14% over a 30 year period(about -0.5%/yr) vs their 72% for a 30 year (about 4%/yr). The result will be mortgage interest rates close to 8 or 9% because you are effectively taking a secured loan and making it unsecured… just like credit cards – whose balances can be written down.

I would LOVE to have all my ‘costs’ readjusted if the real price changes. Imagine that if a stock price goes down, I get some of my cash back because its real value is less!! NICE!!!

[quote patb]
yes it may not appeal to people but the
cramdown is the best outcome.
[/quote]
And what of moral hazard?[/quote]

UC

i hate to tell you this but for almost a 100 years Cramdown was part of law.

If there was cramdown, there would be serious
attention to making sure a deal has lots of equity

[patb]

[quote=ucodegen][quote patb]
In a decent society, a bankruptcy judge would write the note down to the new value of 200K.
[/quote]
Why? It is a secured note. Someone fronted the 400K. If you want mortgage rates to go sky high, go ahead and do this. The people lending money will start demanding a higher interest rate to offset the risk of loss of capital. They will refuse to lend until they get this. Remember that the lenders only make about 72% over the life of the loan (not adjusting for inflation and assuming that they are the primary source of capital). If you are going to demand a 50% haircut from the lenders with the possibility of then getting 36% back for a total return of -14% over a 30 year period(about -0.5%/yr) vs their 72% for a 30 year (about 4%/yr). The result will be mortgage interest rates close to 8 or 9% because you are effectively taking a secured loan and making it unsecured… just like credit cards – whose balances can be written down.

I would LOVE to have all my ‘costs’ readjusted if the real price changes. Imagine that if a stock price goes down, I get some of my cash back because its real value is less!! NICE!!!

[quote patb]
yes it may not appeal to people but the
cramdown is the best outcome.
[/quote]
And what of moral hazard?[/quote]

UC

i hate to tell you this but for almost a 100 years Cramdown was part of law.

If there was cramdown, there would be serious
attention to making sure a deal has lots of equity

[patb]

[quote=ucodegen][quote patb]
In a decent society, a bankruptcy judge would write the note down to the new value of 200K.
[/quote]
Why? It is a secured note. Someone fronted the 400K. If you want mortgage rates to go sky high, go ahead and do this. The people lending money will start demanding a higher interest rate to offset the risk of loss of capital. They will refuse to lend until they get this. Remember that the lenders only make about 72% over the life of the loan (not adjusting for inflation and assuming that they are the primary source of capital). If you are going to demand a 50% haircut from the lenders with the possibility of then getting 36% back for a total return of -14% over a 30 year period(about -0.5%/yr) vs their 72% for a 30 year (about 4%/yr). The result will be mortgage interest rates close to 8 or 9% because you are effectively taking a secured loan and making it unsecured… just like credit cards – whose balances can be written down.

I would LOVE to have all my ‘costs’ readjusted if the real price changes. Imagine that if a stock price goes down, I get some of my cash back because its real value is less!! NICE!!!

[quote patb]
yes it may not appeal to people but the
cramdown is the best outcome.
[/quote]
And what of moral hazard?[/quote]

UC

i hate to tell you this but for almost a 100 years Cramdown was part of law.

If there was cramdown, there would be serious
attention to making sure a deal has lots of equity

[patb]

i believe your interpretation is correct, that
there are mortgages where the LTV exceeds 100%
and that it’s 4 trillion.

and the excess inventory is a little odd in that nevada has 100 years excess inventory while
NYC only maybe has 6 months.

[patb]

i believe your interpretation is correct, that
there are mortgages where the LTV exceeds 100%
and that it’s 4 trillion.

and the excess inventory is a little odd in that nevada has 100 years excess inventory while
NYC only maybe has 6 months.

[patb]

i believe your interpretation is correct, that
there are mortgages where the LTV exceeds 100%
and that it’s 4 trillion.

and the excess inventory is a little odd in that nevada has 100 years excess inventory while
NYC only maybe has 6 months.

[patb]

i believe your interpretation is correct, that
there are mortgages where the LTV exceeds 100%
and that it’s 4 trillion.

and the excess inventory is a little odd in that nevada has 100 years excess inventory while
NYC only maybe has 6 months.

[patb]

i believe your interpretation is correct, that
there are mortgages where the LTV exceeds 100%
and that it’s 4 trillion.

and the excess inventory is a little odd in that nevada has 100 years excess inventory while
NYC only maybe has 6 months.

[patb]

[quote=ucodegen][quote briansd1]
Not so fast… my 80+ yo dad knows how to spend money very well, especially when he travels and takes the ladies out. He’s spending my inheritance, damn it!
[/quote]
Your inheritance is what is left over.. he earned it, you didn’t. You get to spend what you make. If you get inheritance or ‘gifts’.. consider it extra.

a decent bankruptcy would let these people have a future.

They declared bankruptcy several times, only to withdraw the bankruptcy. I suspect they were using this to delay the foreclosure process.

a decent society would let these people cram it down and screw the shylocks not some losers in reno.

And just who would absorb that cram-down? People who acted responsibly with their money? Its gotta come from somewhere! The true ‘shylocks’ were the brokers that hot-potato’d the mortgage and made sure that the got their commission. The holders of the note got screwed because they fronted the cash and only got a percentage back.[/quote]

let us assume it was carrying a note for 400K
let us assume it was worth 200K today.

the reality is that the note for 400K was sunk, lost, wasted, shot, screwed. Gone.

The only value is the 200K now that it’s worth.

In a decent society, a bankruptcy judge would write the note down to the new value of 200K.

In a decent society, the real value is 150K (200- foreclosure cost).

If you write the note to 150K, then, they have a shot at paying the note.

I suspect that might have provided a better outcome then what we have today.

what do we have today?

– 2 dead people.

– 1 burned smoldering wreck.

– some group of shot at deputies.

– total loss on the property and note.

yes it may not appeal to people but the
cramdown is the best outcome.

[patb]

[quote=ucodegen][quote briansd1]
Not so fast… my 80+ yo dad knows how to spend money very well, especially when he travels and takes the ladies out. He’s spending my inheritance, damn it!
[/quote]
Your inheritance is what is left over.. he earned it, you didn’t. You get to spend what you make. If you get inheritance or ‘gifts’.. consider it extra.

a decent bankruptcy would let these people have a future.

They declared bankruptcy several times, only to withdraw the bankruptcy. I suspect they were using this to delay the foreclosure process.

a decent society would let these people cram it down and screw the shylocks not some losers in reno.

And just who would absorb that cram-down? People who acted responsibly with their money? Its gotta come from somewhere! The true ‘shylocks’ were the brokers that hot-potato’d the mortgage and made sure that the got their commission. The holders of the note got screwed because they fronted the cash and only got a percentage back.[/quote]

let us assume it was carrying a note for 400K
let us assume it was worth 200K today.

the reality is that the note for 400K was sunk, lost, wasted, shot, screwed. Gone.

The only value is the 200K now that it’s worth.

In a decent society, a bankruptcy judge would write the note down to the new value of 200K.

In a decent society, the real value is 150K (200- foreclosure cost).

If you write the note to 150K, then, they have a shot at paying the note.

I suspect that might have provided a better outcome then what we have today.

what do we have today?

– 2 dead people.

– 1 burned smoldering wreck.

– some group of shot at deputies.

– total loss on the property and note.

yes it may not appeal to people but the
cramdown is the best outcome.

[patb]

[quote=ucodegen][quote briansd1]
Not so fast… my 80+ yo dad knows how to spend money very well, especially when he travels and takes the ladies out. He’s spending my inheritance, damn it!
[/quote]
Your inheritance is what is left over.. he earned it, you didn’t. You get to spend what you make. If you get inheritance or ‘gifts’.. consider it extra.

a decent bankruptcy would let these people have a future.

They declared bankruptcy several times, only to withdraw the bankruptcy. I suspect they were using this to delay the foreclosure process.

a decent society would let these people cram it down and screw the shylocks not some losers in reno.

And just who would absorb that cram-down? People who acted responsibly with their money? Its gotta come from somewhere! The true ‘shylocks’ were the brokers that hot-potato’d the mortgage and made sure that the got their commission. The holders of the note got screwed because they fronted the cash and only got a percentage back.[/quote]

let us assume it was carrying a note for 400K
let us assume it was worth 200K today.

the reality is that the note for 400K was sunk, lost, wasted, shot, screwed. Gone.

The only value is the 200K now that it’s worth.

In a decent society, a bankruptcy judge would write the note down to the new value of 200K.

In a decent society, the real value is 150K (200- foreclosure cost).

If you write the note to 150K, then, they have a shot at paying the note.

I suspect that might have provided a better outcome then what we have today.

what do we have today?

– 2 dead people.

– 1 burned smoldering wreck.

– some group of shot at deputies.

– total loss on the property and note.

yes it may not appeal to people but the
cramdown is the best outcome.

[patb]

[quote=ucodegen][quote briansd1]
Not so fast… my 80+ yo dad knows how to spend money very well, especially when he travels and takes the ladies out. He’s spending my inheritance, damn it!
[/quote]
Your inheritance is what is left over.. he earned it, you didn’t. You get to spend what you make. If you get inheritance or ‘gifts’.. consider it extra.

a decent bankruptcy would let these people have a future.

They declared bankruptcy several times, only to withdraw the bankruptcy. I suspect they were using this to delay the foreclosure process.

a decent society would let these people cram it down and screw the shylocks not some losers in reno.

And just who would absorb that cram-down? People who acted responsibly with their money? Its gotta come from somewhere! The true ‘shylocks’ were the brokers that hot-potato’d the mortgage and made sure that the got their commission. The holders of the note got screwed because they fronted the cash and only got a percentage back.[/quote]

let us assume it was carrying a note for 400K
let us assume it was worth 200K today.

the reality is that the note for 400K was sunk, lost, wasted, shot, screwed. Gone.

The only value is the 200K now that it’s worth.

In a decent society, a bankruptcy judge would write the note down to the new value of 200K.

In a decent society, the real value is 150K (200- foreclosure cost).

If you write the note to 150K, then, they have a shot at paying the note.

I suspect that might have provided a better outcome then what we have today.

what do we have today?

– 2 dead people.

– 1 burned smoldering wreck.

– some group of shot at deputies.

– total loss on the property and note.

yes it may not appeal to people but the
cramdown is the best outcome.

[Author]

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