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ucodegen
ParticipantMAKE SURE YOU ARE ADEQUATELY COVERED. REVIEW YOUR POLICIES. YOU ARE YOUR OWN BEST ADVOCATE.
If you have a safety deposit box, I would also recommend you doing the following:
Take general digital pictures of inside and outside the house, inside and outside of any cars you have(clean the cars ahead of time – include odometer in one picture), tools or other things of value.. Also scan any important documents that you need to have with you, any passwords etc that you have written down on paper (with all the passwords these days, I know that some people have them written down.. if the browser manages them for you, you will need to locate where the archived – hopefully encrypted password file that the browser uses is located) and copy all of that in some organized fashion onto a thumb drive(USB memory stick). Then place the thumb drive in the safety deposit box.If you are not afraid of a little more tech.. look up TrueCrypt.. you can set up another thumb drive to be an encrypted file system (256bit AES which is considerably stronger than the old mil triple DES) and carry it with you. If you lose it.. no big deal. The password on this one is the one you would have to remember though…
ucodegen
ParticipantMAKE SURE YOU ARE ADEQUATELY COVERED. REVIEW YOUR POLICIES. YOU ARE YOUR OWN BEST ADVOCATE.
If you have a safety deposit box, I would also recommend you doing the following:
Take general digital pictures of inside and outside the house, inside and outside of any cars you have(clean the cars ahead of time – include odometer in one picture), tools or other things of value.. Also scan any important documents that you need to have with you, any passwords etc that you have written down on paper (with all the passwords these days, I know that some people have them written down.. if the browser manages them for you, you will need to locate where the archived – hopefully encrypted password file that the browser uses is located) and copy all of that in some organized fashion onto a thumb drive(USB memory stick). Then place the thumb drive in the safety deposit box.If you are not afraid of a little more tech.. look up TrueCrypt.. you can set up another thumb drive to be an encrypted file system (256bit AES which is considerably stronger than the old mil triple DES) and carry it with you. If you lose it.. no big deal. The password on this one is the one you would have to remember though…
ucodegen
Participant[quote sdduuuude]
I would also like to make sure readers know that the fascinating discussion of sharks and zombies below is not the essense of the Econo-Almanac.
[/quote]I thought he was referencing zombie banks and other banks that act like loan sharks after being bailed out with the taxpayers money…
my bad (token overused expression)
ucodegen
Participant[quote sdduuuude]
I would also like to make sure readers know that the fascinating discussion of sharks and zombies below is not the essense of the Econo-Almanac.
[/quote]I thought he was referencing zombie banks and other banks that act like loan sharks after being bailed out with the taxpayers money…
my bad (token overused expression)
ucodegen
Participant[quote sdduuuude]
I would also like to make sure readers know that the fascinating discussion of sharks and zombies below is not the essense of the Econo-Almanac.
[/quote]I thought he was referencing zombie banks and other banks that act like loan sharks after being bailed out with the taxpayers money…
my bad (token overused expression)
ucodegen
Participant[quote sdduuuude]
I would also like to make sure readers know that the fascinating discussion of sharks and zombies below is not the essense of the Econo-Almanac.
[/quote]I thought he was referencing zombie banks and other banks that act like loan sharks after being bailed out with the taxpayers money…
my bad (token overused expression)
ucodegen
Participant[quote sdduuuude]
I would also like to make sure readers know that the fascinating discussion of sharks and zombies below is not the essense of the Econo-Almanac.
[/quote]I thought he was referencing zombie banks and other banks that act like loan sharks after being bailed out with the taxpayers money…
my bad (token overused expression)
June 22, 2010 at 10:44 PM in reply to: OT-What a loan modification with principal reduction really looks like #569497ucodegen
Participant[quote sdrealtor]
Across the life of the loan the banks borrowing costs are and will be well below the interest rate he is paying. The risk of not getting principal back has been lowered by reducing the borrowers rates, it hasnt gone up.
[/quote]
You are focusing on short term rates. The bank is committed to the loan for more than 1 or 2 years. It has to look at its costs over a longer period. LIBOR is an even shorter period of time than Freddie’s financing. Short term financing presents risks should interest rates go up.
http://www.wsjprimerate.us/libor/libor_rates_history.htm
Look at some of the past rates… take a look at 1990.
Freddie’s bond costs were 6% in 2000.
http://www.freddiemac.com/debt/data/cgi-bin/refbillaucres.cgi?order=AD&year=2000Freddie’s TARP interest payments are 10%.
Bank of America’s TARP interest payments were 3.5%.. which is higher than the amount I used as my example.As for risk of default going up or down, I just said that in my example, it was unquantified. That said, there is a very high number of re-defaults in these renegotiated loans. Whisper is that it is close to 60%. The same mentality that used the home-ATM also ran up the credit cards etc.. and financing those through the home-ATM.
There may be people who were beset by problems, that these reduction of principals help.. but it looks like it is the minority.
[quote sdrealtor]
Wow, that 2nd one was a wacky twist on my analogy. I dont know many individuals whose personal income is underwritten by borrowed money. You cant lose money you never had. Making less than you hoped for or were promised does automatically create a loss.
[/quote]
I don’t know if you are responding to me here.. but I think you mis-read something I wrote. I was talking about the banking business. But lets say I was talking about people’s personal income being underwritten by borrowed money — I suggest you look up something called “Carry Trade”.June 22, 2010 at 10:44 PM in reply to: OT-What a loan modification with principal reduction really looks like #569591ucodegen
Participant[quote sdrealtor]
Across the life of the loan the banks borrowing costs are and will be well below the interest rate he is paying. The risk of not getting principal back has been lowered by reducing the borrowers rates, it hasnt gone up.
[/quote]
You are focusing on short term rates. The bank is committed to the loan for more than 1 or 2 years. It has to look at its costs over a longer period. LIBOR is an even shorter period of time than Freddie’s financing. Short term financing presents risks should interest rates go up.
http://www.wsjprimerate.us/libor/libor_rates_history.htm
Look at some of the past rates… take a look at 1990.
Freddie’s bond costs were 6% in 2000.
http://www.freddiemac.com/debt/data/cgi-bin/refbillaucres.cgi?order=AD&year=2000Freddie’s TARP interest payments are 10%.
Bank of America’s TARP interest payments were 3.5%.. which is higher than the amount I used as my example.As for risk of default going up or down, I just said that in my example, it was unquantified. That said, there is a very high number of re-defaults in these renegotiated loans. Whisper is that it is close to 60%. The same mentality that used the home-ATM also ran up the credit cards etc.. and financing those through the home-ATM.
There may be people who were beset by problems, that these reduction of principals help.. but it looks like it is the minority.
[quote sdrealtor]
Wow, that 2nd one was a wacky twist on my analogy. I dont know many individuals whose personal income is underwritten by borrowed money. You cant lose money you never had. Making less than you hoped for or were promised does automatically create a loss.
[/quote]
I don’t know if you are responding to me here.. but I think you mis-read something I wrote. I was talking about the banking business. But lets say I was talking about people’s personal income being underwritten by borrowed money — I suggest you look up something called “Carry Trade”.June 22, 2010 at 10:44 PM in reply to: OT-What a loan modification with principal reduction really looks like #570097ucodegen
Participant[quote sdrealtor]
Across the life of the loan the banks borrowing costs are and will be well below the interest rate he is paying. The risk of not getting principal back has been lowered by reducing the borrowers rates, it hasnt gone up.
[/quote]
You are focusing on short term rates. The bank is committed to the loan for more than 1 or 2 years. It has to look at its costs over a longer period. LIBOR is an even shorter period of time than Freddie’s financing. Short term financing presents risks should interest rates go up.
http://www.wsjprimerate.us/libor/libor_rates_history.htm
Look at some of the past rates… take a look at 1990.
Freddie’s bond costs were 6% in 2000.
http://www.freddiemac.com/debt/data/cgi-bin/refbillaucres.cgi?order=AD&year=2000Freddie’s TARP interest payments are 10%.
Bank of America’s TARP interest payments were 3.5%.. which is higher than the amount I used as my example.As for risk of default going up or down, I just said that in my example, it was unquantified. That said, there is a very high number of re-defaults in these renegotiated loans. Whisper is that it is close to 60%. The same mentality that used the home-ATM also ran up the credit cards etc.. and financing those through the home-ATM.
There may be people who were beset by problems, that these reduction of principals help.. but it looks like it is the minority.
[quote sdrealtor]
Wow, that 2nd one was a wacky twist on my analogy. I dont know many individuals whose personal income is underwritten by borrowed money. You cant lose money you never had. Making less than you hoped for or were promised does automatically create a loss.
[/quote]
I don’t know if you are responding to me here.. but I think you mis-read something I wrote. I was talking about the banking business. But lets say I was talking about people’s personal income being underwritten by borrowed money — I suggest you look up something called “Carry Trade”.June 22, 2010 at 10:44 PM in reply to: OT-What a loan modification with principal reduction really looks like #570202ucodegen
Participant[quote sdrealtor]
Across the life of the loan the banks borrowing costs are and will be well below the interest rate he is paying. The risk of not getting principal back has been lowered by reducing the borrowers rates, it hasnt gone up.
[/quote]
You are focusing on short term rates. The bank is committed to the loan for more than 1 or 2 years. It has to look at its costs over a longer period. LIBOR is an even shorter period of time than Freddie’s financing. Short term financing presents risks should interest rates go up.
http://www.wsjprimerate.us/libor/libor_rates_history.htm
Look at some of the past rates… take a look at 1990.
Freddie’s bond costs were 6% in 2000.
http://www.freddiemac.com/debt/data/cgi-bin/refbillaucres.cgi?order=AD&year=2000Freddie’s TARP interest payments are 10%.
Bank of America’s TARP interest payments were 3.5%.. which is higher than the amount I used as my example.As for risk of default going up or down, I just said that in my example, it was unquantified. That said, there is a very high number of re-defaults in these renegotiated loans. Whisper is that it is close to 60%. The same mentality that used the home-ATM also ran up the credit cards etc.. and financing those through the home-ATM.
There may be people who were beset by problems, that these reduction of principals help.. but it looks like it is the minority.
[quote sdrealtor]
Wow, that 2nd one was a wacky twist on my analogy. I dont know many individuals whose personal income is underwritten by borrowed money. You cant lose money you never had. Making less than you hoped for or were promised does automatically create a loss.
[/quote]
I don’t know if you are responding to me here.. but I think you mis-read something I wrote. I was talking about the banking business. But lets say I was talking about people’s personal income being underwritten by borrowed money — I suggest you look up something called “Carry Trade”.June 22, 2010 at 10:44 PM in reply to: OT-What a loan modification with principal reduction really looks like #570487ucodegen
Participant[quote sdrealtor]
Across the life of the loan the banks borrowing costs are and will be well below the interest rate he is paying. The risk of not getting principal back has been lowered by reducing the borrowers rates, it hasnt gone up.
[/quote]
You are focusing on short term rates. The bank is committed to the loan for more than 1 or 2 years. It has to look at its costs over a longer period. LIBOR is an even shorter period of time than Freddie’s financing. Short term financing presents risks should interest rates go up.
http://www.wsjprimerate.us/libor/libor_rates_history.htm
Look at some of the past rates… take a look at 1990.
Freddie’s bond costs were 6% in 2000.
http://www.freddiemac.com/debt/data/cgi-bin/refbillaucres.cgi?order=AD&year=2000Freddie’s TARP interest payments are 10%.
Bank of America’s TARP interest payments were 3.5%.. which is higher than the amount I used as my example.As for risk of default going up or down, I just said that in my example, it was unquantified. That said, there is a very high number of re-defaults in these renegotiated loans. Whisper is that it is close to 60%. The same mentality that used the home-ATM also ran up the credit cards etc.. and financing those through the home-ATM.
There may be people who were beset by problems, that these reduction of principals help.. but it looks like it is the minority.
[quote sdrealtor]
Wow, that 2nd one was a wacky twist on my analogy. I dont know many individuals whose personal income is underwritten by borrowed money. You cant lose money you never had. Making less than you hoped for or were promised does automatically create a loss.
[/quote]
I don’t know if you are responding to me here.. but I think you mis-read something I wrote. I was talking about the banking business. But lets say I was talking about people’s personal income being underwritten by borrowed money — I suggest you look up something called “Carry Trade”.June 22, 2010 at 7:01 AM in reply to: OT-What a loan modification with principal reduction really looks like #569537ucodegen
Participant[quote sdrealtor]
I disagree that the 1st statement is not accurate. The bank is not recognizing a loss and it is not taking a loss. Are they making as much money as they hoped when the loan documents were first signed? Absolutely not!Please show me where the bank is taking a loss.
[/quote]
Quite easily done. Remember that what the bank is lending out, is not their money. They have borrowed money to loan out to others. The banks have to pay interest on those notes. These notes are also ‘long term’ commitments, whose rates were set when the mortgage was first made. If it is costing the bank 3% on the money they borrowed to make the loan, and they are lending it out at 2% for the ‘new mortgage’.. they are taking a 1% loss per year on the mortgage.This also does not factor in risk of never getting all of the principal back, the risk of the banks borrowing costs going up while still supporting the 2% mortgage.
[quote sdrealtor]
If I had a contract to earne $1M this year but got injured and only made $500K would you say I lost $500K?
[/quote]
If the contract was underwritten by borrowed money costing you $750K/year.. you would lose money.
If inflation ate away more than 0% of the value of the money per year.. you would lose money.June 22, 2010 at 7:01 AM in reply to: OT-What a loan modification with principal reduction really looks like #569643ucodegen
Participant[quote sdrealtor]
I disagree that the 1st statement is not accurate. The bank is not recognizing a loss and it is not taking a loss. Are they making as much money as they hoped when the loan documents were first signed? Absolutely not!Please show me where the bank is taking a loss.
[/quote]
Quite easily done. Remember that what the bank is lending out, is not their money. They have borrowed money to loan out to others. The banks have to pay interest on those notes. These notes are also ‘long term’ commitments, whose rates were set when the mortgage was first made. If it is costing the bank 3% on the money they borrowed to make the loan, and they are lending it out at 2% for the ‘new mortgage’.. they are taking a 1% loss per year on the mortgage.This also does not factor in risk of never getting all of the principal back, the risk of the banks borrowing costs going up while still supporting the 2% mortgage.
[quote sdrealtor]
If I had a contract to earne $1M this year but got injured and only made $500K would you say I lost $500K?
[/quote]
If the contract was underwritten by borrowed money costing you $750K/year.. you would lose money.
If inflation ate away more than 0% of the value of the money per year.. you would lose money. -
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