>33 of Obama's Mortgage Relief Recipients headed back toward foreclosure

[Vic]

Are you for reals?

 

[Vic]

Actually I'm going by what a loan officer told me when her sister-in-law was trying to get help (she dropped out and sold her house, $40/month wasn't going to cut it.)

In other words, you're saying that some loan officer-you-spoke-with-once's sister-in-law's cousin's uncle's niece applied for HAMP but she already had a payment she could afford so she dropped out and sold the house she could already afford because govt didn't give her a handout? Do I understand you correctly? And your position is that it's a bad thing she didn't get a handout? An example of socialist govt failure even? Really? Wow. You're a moron.

 

[Vic]

That's where I got 100% from, your estimates of the remaining half nearly doubling the success rate, which is manifestly true only with a success rate at or near 100% for the remaining half. (An intelligent person would assume that just as more have dropped out than have successfully completed the program to date, so will the numbers of failures be quite high in the future.) If that isn't what you meant, learn to say what you mean.

But to be more precise: Roughly 1,240,000 started the program. Roughly 436,000 have dropped out and 340,000 have successfully completed the program, leaving roughly 464,000 still in process. To double the number of those successfully completing the program, you need a success rate of 73.3%. True, that's not 100%, but it's far larger than the 43.8% of those leaving the program successfully to date.

And as the article states, "the majority" of those who "successfully" complete the program are still expected to lose their homes. If this is even partially true then even a magical 100% program success rate will result in far more than $220,000 per mortgage saved. But then I suppose if you find a failure rate of more than a third to be a good thing, then the ultimate failure rate will be a truly great thing.

What about the process taking a minimum of longer than 6 months to complete and the program only having been in operation for about 12 months did you fail to understand?

And as HAMP reduces a mortgagor's payment (including principal, interest, taxes, insurance, and even HOA fees, if applicable) to an affordable 31% of their gross income, then yes, I do think that people who refuse to make that payment should lose their homes and that it is a good thing. I don't live rent-free. I doubt you live rent-free. Why are you arguing that these people should? Or do you think we should keep modifying these peoples' loans over and over again until they finally do perform?

 

[bfdd]

Are you for reals?

Yeah I am. I want to know why rewarding failure is a good idea.

 

[Vic]

Yeah I am. I want to know why rewarding failure is a good idea.

I wasn't talking about you, and in case you weren't paying attention, I'm arguing against rewarding failure. If you signed a contract and can afford to meet your contractual obligations, then in my deeply-held personal moral and ethical opinion, you should not fail to do so.

 

[bfdd]

I wasn't talking about you, and in case you weren't paying attention, I'm arguing against rewarding failure. If you signed a contract and can afford to meet your contractual obligations, then in my deeply-held personal moral and ethical opinion, you should not fail to do so.

I wasn't really attacking you, I just wanted someone to answer the question and you seemed active in the thread.

 

[werepossum]

In other words, you're saying that some loan officer-you-spoke-with-once's sister-in-law's cousin's uncle's niece applied for HAMP but she already had a payment she could afford so she dropped out and sold the house she could already afford because govt give her a handout? Do I understand you correctly? And your position is that it's a bad thing she didn't get a handout? An example of socialist govt failure even? Really? Wow. You're a moron.

Um, no. My neighbor applied to HAMP because she could not make her payments after her divorce. Her adjustment came to roughly $40 per month - not a significant amount. She dropped out. Her sister-in-law, who is a loan officer in another state, told her the reason the banks (including hers) were pushing this program was because the refi loan offered was fully guaranteed by the federal government (meaning us.) She also said many banks (especially Bank of America) were doing refi's knowing the mortgage holder could not meet the lower payment either - but also knowing that the bank can now foreclose without losing money on the loan. My neighbor sold her home because she could not make the payments and was about to lose it. My position is NOT that it is bad that she didn't get a government handout, my position is that it is a BAD PROGRAM - something the original linked article also stated. Either you have the mental capacity of mold, or you are defending this purely because it's Obama's shit and therefore cannot stink, or you are defending this because it is enriching you personally. I specifically do not rule out all three.

What about the process taking a minimum of longer than 6 months to complete and the program only having been in operation for about 12 months did you fail to understand?

And as HAMP reduces a mortgagor's payment (including principal, interest, taxes, insurance, and even HOA fees, if applicable) to an affordable 31% of their gross income, then yes, I do think that people who refuse to make that payment should lose their homes and that it is a good thing. I don't live rent-free. I doubt you live rent-free. Why are you arguing that these people should? Or do you think we should keep modifying these peoples' loans over and over again until they finally do perform?

Again, my point is that it is a BAD PROGRAM. It is expensive and filled with fail, and does almost nothing to solve the problem for which it was purportedly passed. You have addressed none of my points - perhaps you honestly can't comprehend them - but you surely don't think (sorry, feel) that simply because a process takes "a minimum of longer than 6 months to complete and the program only having been in operation for about 12 months" everyone who will drop out has already done so.

And to answer your question: No, I do not think we should keep modifying these peoples' loans over and over again until they finally do perform. This is a BAD PROGRAM. Pointing to the program's success rate, even if all remaining 60% succeed (something you seem to rely on even whilst denying you ever said it), does not make it a good program. The point of the program is supposedly not to successfully modify at-risk loans and "complete the program", but to save people's homes. When all is said and done this program will have transferred a lot of money from taxpayers to banks and actually saved damned few homes; the actual cost per mortgage actually saved may well exceed a million dollars before this is all done. If you make your living as a banker and have no integrity, you might possibly think this is a good program because it puts money in your pocket and to hell with everyone else. By any other standard this is one of the worst programs ever devised by our federal government.

 

[Vic]

I wasn't really attacking you, I just wanted someone to answer the question and you seemed active in the thread.

Okay then, serious answer is that it's in the best interest of all parties involved. If a borrower can't perform because of genuine financial hardship, the lender has no choice but to take the property to foreclosure. But in today's market, foreclosure isn't the best resolution for the lender. While finding a way to get the borrower to perform is ALWAYS the best resolution. All HAMP does is provide a uniform platform for servicers to implement the ideal payment plan-to-reinstatement mod resolution. Not everyone who applies will qualify or perform. And that's a good thing. Because if there is one thing the housing boom taught us, it's that not everyone deserves to own a home.

You guys do know that HAMP has expanded to include a short sale program called HAFA, right?

 

[Vic]

Um, no. My neighbor applied to HAMP because she could not make her payments after her divorce. Her adjustment came to roughly $40 per month - not a significant amount. She dropped out. Her sister-in-law, who is a loan officer in another state, told her the reason the banks (including hers) were pushing this program was because the refi loan offered was fully guaranteed by the federal government (meaning us.) She also said many banks (especially Bank of America) were doing refi's knowing the mortgage holder could not meet the lower payment either - but also knowing that the bank can now foreclose without losing money on the loan. My neighbor sold her home because she could not make the payments and was about to lose it. My position is NOT that it is bad that she didn't get a government handout, my position is that it is a BAD PROGRAM - something the original linked article also stated. Either you have the mental capacity of mold, or you are defending this purely because it's Obama's shit and therefore cannot stink, or you are defending this because it is enriching you personally. I specifically do not rule out all three.

Your loan officer friend is a fucking moron who doesn't have a fucking clue what she's talking about. Feel free to tell her I said so. How about you come up with a reliable source eh?

Your little belief here that banks become 100% insured against loss after a borrower applies for HAMP is 100% wrong. Laughably so. Like holy-shit-this-moron-doesn't-know-what-he's-fucking-talking-about wrong. HAMP only incents investors and servicers if the borrower performs. There is no insurance to the investor if the borrower fails to perform. Period.

As to the rest of your little spiel here, your credibility is for shit. You haven't a clue what you're talking about, and you can't back up a thing you say except for some "wild but true" stories you claim came from a neighbor and some loan officer, and you expect us to respect your personal view on the subject despite your obvious misinformation? Whatever. But I better not argue against you or I must be sucking Obama's dick, is that it? 🙄

Hmm... I re-read your post and I think I got a handle on part of your confusion. I wasn't discussing the refi aspect of MHA. I was focused on HAMP. However, the refi is a SHORT refi. That means the bank already takes the loss through a short refinance BEFORE the govt-insured loan is issued. Even if that 2nd loan goes to foreclosure, the loss will likely be much less, and it would just be yet another sign that the borrower can't afford the house even at its current market value.

 

[Jhhnn]

These programs are propping up your own home values and keeping the economy running. Without them, the entire banking system in this country would have collapsed. Period. Financing would have disappeared and homes all across the country would be worth nothing more than what a cash buyer would be willing to be pay for them. Period.

Sad but true, near as I can tell. 1931 all over again. Thanks for that, and for filling in the details around the program and the spin-offs.

 

[drebo]

Ignorance fail.

First, your 340k mortgages figure is willfully dishonest. With more than that number still in the lengthy process, the actual number of mortgages "saved" will be nearly double that.

Second, you seem to not realize the magnitude of the problem. $220k loss severity is practically average. Contrary to this "poor peeples caused the problem" mentality spread by idiots on the internet, it's the upper middle value properties causing the most losses. Brand new 3500 sq ft homes in suburban developments in California, Nevada, and Arizona. Losses on the majority of those easily exceed $220k per asset.

Oh, and to add to the whole "poor peeples caused the problem," 31% of all defaults now are strategic, meaning the customer can afford their mortgage and is intentionally walking away because they borrowed too much against their house in the boom and now they're underwater. Better hope they don't live a recourse state. Either way, they won't be buying another home for at least 7 years, unless it's with cash.

I never once said that only poor people were causing the problems. I have always (and several times in this thread) maintained that the problem was caused by people borrowing above their means. Whether that means a poor person buying a $200k house or a middle class person buying a $400k house, neither can really afford it except with ridiculous loans made under the assumption that the house is going to continue to increase in value and the borrower will be smart enough to refinance.

The price bubble was caused by developers building bigger and bigger homes and banks willing to loan more money to more people. However, lowering the income floor and attractive a significant number of poor people has certainly contributed (at least in California) to keeping that bubble and home prices extremely large.

 

[drebo]

These programs are propping up your own home values and keeping the economy running. Without them, the entire banking system in this country would have collapsed. Period. Financing would have disappeared and homes all across the country would be worth nothing more than what a cash buyer would be willing to be pay for them.

And why is "market value" for a home a bad thing? Houses are still overpriced. They shouldn't be "propped up". People who have no problem making their mortgage payments aren't going to walk away from their home. That's a shitload of work for someone who's been paying on a mortgage for 10+ years already.

The only people walking away from loans are people who bought houses during the time when housing prices were artificially inflated due to artificially high demand (because of lower qualification requirements for loans). People who bought their homes in the 90s, when prices were mostly in line with market values, are going to continue paying their mortgages. There's no reason for them to walk away.

Yes, it is reasonable to expect your house to increase in value, but in some places in California, the homes more than quadrupled in value in a period of less than 10 years between the late 90s and 2007. That's not natural market growth. That's unnatural price inflation caused by there being more people "able" to buy houses.

I can tell you sure as shit that neighborhoods weren't getting any better. In fact, neighborhoods are steadily increasing in niceness now that all of the subprime borrowers are leaving.

In short, I don't buy in to the idea that if housing prices don't stay artificially "propped up" that the entire banking industry would collapse. On the contrary, if prices were to fall back to where the market could actually sustain them, banks would make more money because they would not constantly be dealing with forclosure and wasting manpower on "modifications".

 

[Slew Foot]

The banks weren't pressured, it was their idea in order to accelerate implementation of the plan. Income verification was always required from the beginning, except that early applicants were allowed to state their income in order get them into process. Those customers who misstated their income were later disqualified during the income verification process, required before their mod finalized, because they either lied about their income or failed to provide the required documents.

And just to prove how ignorant you must be about this, making statements like that, I'd like to point out that those customers who misstated their income to qualify for the initial trial ending up making 3-4 trial payments before they were disqualified at the income verification process... and then their home went back into foreclosure.

Just to prove how ignorant you are, those arent my words, those are directly from the article. Go write some more sub-prime loans.

 

[Vic]

I never once said that only poor people were causing the problems. I have always (and several times in this thread) maintained that the problem was caused by people borrowing above their means. Whether that means a poor person buying a $200k house or a middle class person buying a $400k house, neither can really afford it except with ridiculous loans made under the assumption that the house is going to continue to increase in value and the borrower will be smart enough to refinance.

The price bubble was caused by developers building bigger and bigger homes and banks willing to loan more money to more people. However, lowering the income floor and attractive a significant number of poor people has certainly contributed (at least in California) to keeping that bubble and home prices extremely large.

Developers built those homes, and banks made those loans, because borrowers operated under the assumption that home values would increase forever. That developers built bigger homes or that banks were more lenient on income requirements is just a result of that mindset, not the cause. With home values going up, buyers wanted bigger, nicer homes, and were confident that if they couldn't pay for them then they could just sell for a profit. With home values going up, banks were exposed to less risk if the borrower defaulted. And seriously, just because someone puts papers in front of you doesn't mean you have to sign them.

I know it's easy for the populist mindset to blame nebulous 'others' for our woes but the reality is those 'others' are us too. Yes, developers, bankers, and even *gasp* realtors are Americans too. And ironically in this case, some of the first victims of the collapse.

 

[Vic]

Just to prove how ignorant you are, those arent my words, those are directly from the article. Go write some more sub-prime loans.

Don't believe everything you read on the news. The AP has consistently exercised shoddy journalism when reporting about HAMP. My favorite was when last year they were condemning the program for not enough successful permanent mods before the program had even been in existence long enough for anyone to have successfully completed the 6+ month process.

The media practices this kind of shoddy journalism for a reason (besides just laziness). Outrage sells copy.

 

[Vic]

And why is "market value" for a home a bad thing? Houses are still overpriced. They shouldn't be "propped up". People who have no problem making their mortgage payments aren't going to walk away from their home. That's a shitload of work for someone who's been paying on a mortgage for 10+ years already.

The only people walking away from loans are people who bought houses during the time when housing prices were artificially inflated due to artificially high demand (because of lower qualification requirements for loans). People who bought their homes in the 90s, when prices were mostly in line with market values, are going to continue paying their mortgages. There's no reason for them to walk away.

Yes, it is reasonable to expect your house to increase in value, but in some places in California, the homes more than quadrupled in value in a period of less than 10 years between the late 90s and 2007. That's not natural market growth. That's unnatural price inflation caused by there being more people "able" to buy houses.

I can tell you sure as shit that neighborhoods weren't getting any better. In fact, neighborhoods are steadily increasing in niceness now that all of the subprime borrowers are leaving.

In short, I don't buy in to the idea that if housing prices don't stay artificially "propped up" that the entire banking industry would collapse. On the contrary, if prices were to fall back to where the market could actually sustain them, banks would make more money because they would not constantly be dealing with forclosure and wasting manpower on "modifications".

Uhh.... how did you go from what I posted to this? :confused;

Let me try to take this one piece at a time.

First, I never said that home values should be "propped up." Unless you consider any market above a cash only market to be "propped up," which I don't.

Second, strategic defaults make up an estimated 31% of all defaults at this time. Research has determined that whenever a borrower is 25% or more underwater, they are considerably more likely to strategically default ("walk away"). While I would agree that this group mostly includes those who bought at the height of the boom, it also includes those who took out cash refinances too. Length of residence in the property doesn't seem to make much difference in the equation, just how far underwater a borrower is in the property. And in many areas, home prices have already fallen to late 90s levels. If you think that is still too high, well...

Third, lower qualifications for mortgages did not increase demand. Increased demand led to lower qualifications for mortgages. And this is NOT a chicken or the egg type scenario. Home prices were already accelerating long before subprime loans went mainstream around 2004. This is fact. And the reason for this is simple. In a rapidly appreciating market, lenders can actually make money even if the loan defaults and goes to foreclosure. The problem now is that the music stopped.
The actual cause of the housing boom IMO is the long-term steady decline in interest rates starting from the late 80s, after the S&L bust and the MBS took over and homogenized rates nationwide.

Fourth, I argued against the housing boom and began predicting this housing bubble since 2003. Kindly don't put words in my mouth like I believe the boom was some kind of 'natural market growth' because I never said any such thing, thanks.

Finally, you don't seem to understand how foreclosure affects banks and housing markets. Foreclosure is a long and expensive legal process, at the end of which, if it's lucky, the bank is still left with the property (and its expenses) and no cash flow. If something - anything - can be done to keep the borrower in the property and paying, the bank would greatly prefer that over foreclosure, even if it means "wasting manpower" as you put it. It's not like loss mitigation and loan modifications just recently appeared or that the govt forced them to happen, they have ALWAYS existed. It's just there is a lot more of that now. And banks are doing it for only one reason: survival.

 

[Fern]

-snip-
Of those who "dropped out" of the program (as you put it), they primarily fall into 3 groups: (1) those already have an affordable payment less than 31% their gross income, (2) those who cannot afford their home even at its present market value, and (3) those who fail to comply with the program.

Re: The bolded portion.

Why do you say that?

IMO, the problem with this program is that it doesn't provide for a reduction in the principal amount of the loan for those homes that are underwater because their FMV dropped.

I.e., if you purchased a home for $500k that's now worth $300k what's the point of a reduced interest rate or extended term? You're still paying $500k for a $300k house.

So, it's not about "present market value" as you say. It would be a lot easier to make payments on a $300k loan (the present market value) than a $500k loan.

The program was faulty from it's inception because it did not address the core problem - underwater homes because of the substanial drop in FMV.

The real failure of this program can be seen by the very low participation/interest in by people with mortgage trouble.
---------------------------

Re:

To encourage more of those sales, the Obama administration is giving $3,000 for moving expenses to homeowners who complete such a sale or agree to turn over the deed of the property to the lender.

I've never heard of this, anybody here familiar with it?

Fern

 

[werepossum]

Developers built those homes, and banks made those loans, because borrowers operated under the assumption that home values would increase forever. That developers built bigger homes or that banks were more lenient on income requirements is just a result of that mindset, not the cause. With home values going up, buyers wanted bigger, nicer homes, and were confident that if they couldn't pay for them then they could just sell for a profit. With home values going up, banks were exposed to less risk if the borrower defaulted. And seriously, just because someone puts papers in front of you doesn't mean you have to sign them.

I know it's easy for the populist mindset to blame nebulous 'others' for our woes but the reality is those 'others' are us too. Yes, developers, bankers, and even *gasp* realtors are Americans too. And ironically in this case, some of the first victims of the collapse.

I have no problem seeing bankers, realtors, and developers as Americans. I have a big problem with programs that purport to be using tax dollars to save homes from foreclosure when in reality they are simply using those tax dollars to prop up banks. Had TARP been used as it was intended - for the federal government to buy up the "toxic assets" and dispose of them at true market value - and had those abusing the system via in-house appraisers been appropriately prosecuted, I'm fine with that. Instead we have programs that obviously do not help the majority of those upside-down or otherwise distressed homeowners, but instead isolate the banks from losing money in foreclosure and pay banks to generate seemingly endless paperwork. There is a big difference between assisting the homeowner about to lose everything (even if through his own stupidity) and helping banks which may well be profitable without the program - there is after all no requirement that the banks be distressed. Those are bad programs and dishonest lawmaking.

 

[Vic]

Re: The bolded portion.

Why do you say that?

You're an accountant as I recall, right? Ok, HAMP requires an NPV test. If the expected cashflow from the modification doesn't exceed the present market value of the property, i.e. if the NPV is not positive, then the borrower's application for the mod fails and the property proceeds to foreclosure. This is a critical feature of the program. The borrower MUST be able to afford the property at its present market value (with "affordable" defined as a PITIA mortgage payment than does not exceed 31% of the gross income). These borrowers represent a significant number of those who fail for the mod, and they are expected to fail. Ask yourself: why should anyone be allowed to live in a property they can't afford?

IMO, the problem with this program is that it doesn't provide for a reduction in the principal amount of the loan for those homes that are underwater because their FMV dropped.

I.e., if you purchased a home for $500k that's now worth $300k what's the point of a reduced interest rate or extended term? You're still paying $500k for a $300k house.

So, it's not about "present market value" as you say. It would be a lot easier to make payments on a $300k loan (the present market value) than a $500k loan.

The program was faulty from it's inception because it did not address the core problem - underwater homes because of the substanial drop in FMV.

The real failure of this program can be seen by the very low participation/interest in by people with mortgage trouble.

What you're describing is called debt forgiveness. And it's pure communism if you ask me. You bought the house. The bank just lent you the money. Ask yourself another question: after these $500k mortgages on $300k houses are written down to $300k, and in the future these homes appreciate back up to say $350k, will we be re-writing those mortgages to $350k? Or does the homeowner get to pocket the equity then?

I've never heard of this, anybody here familiar with it?

Fern

It's called HAFA (Home Affordable Foreclosure Alternative), and it's for all these borrowers who failed HAMP because they can't afford the property even at its present market value.

 

[Vic]

I have no problem seeing bankers, realtors, and developers as Americans. I have a big problem with programs that purport to be using tax dollars to save homes from foreclosure when in reality they are simply using those tax dollars to prop up banks. Had TARP been used as it was intended - for the federal government to buy up the "toxic assets" and dispose of them at true market value - and had those abusing the system via in-house appraisers been appropriately prosecuted, I'm fine with that. Instead we have programs that obviously do not help the majority of those upside-down or otherwise distressed homeowners, but instead isolate the banks from losing money in foreclosure and pay banks to generate seemingly endless paperwork. There is a big difference between assisting the homeowner about to lose everything (even if through his own stupidity) and helping banks which may well be profitable without the program - there is after all no requirement that the banks be distressed. Those are bad programs and dishonest lawmaking.

Yaknow, what you're saying cool and all... except that you're still attacking the programs for not being socialist ENOUGH. If you're going to attack it for being a "bad program" and socialist, then attack its very existence, not that it doesn't do enough.

And buddy, there have been strict federal laws against in-house appraisers since the 1980s. They have names like FIRREA and USPAP. Once again, you're just making shit up. Granted, relationships between lenders and appraisers may have been occasionally too close during the boom (something that has been corrected now), but there were NEVER "in-house" appraisers.

The irony of what you're saying there is that the valuations for these mods, which you call "true" market value (as though market values don't fluctuate), are FAR more "in-house" than any appraisal done during the boom. For one thing, they're not even appraisals, they're BPO's, which are done by realtors, and usually just exterior drive-by's.

 

[werepossum]

Yaknow, what you're saying cool and all... except that you're still attacking the programs for not being socialist ENOUGH. If you're going to attack it for being a "bad program" and socialist, then attack its very existence, not that it doesn't do enough.

And buddy, there have been strict federal laws against in-house appraisers since the 1980s. They have names like FIRREA and USPAP. Once again, you're just making shit up. Granted, relationships between lenders and appraisers may have been occasionally too close during the boom (something that has been corrected now), but there were NEVER "in-house" appraisers.

The irony of what you're saying there is that the valuations for these mods, which you call "true" market value (as though market values don't fluctuate), are FAR more "in-house" than any appraisal done during the boom. For one thing, they're not even appraisals, they're BPO's, which are done by realtors, and usually just exterior drive-by's.

http://www.bloggingstocks.com/tag/appraisers/

Freddie Mac and Fannie Mae will no longer buy mortgages from lenders that use in-house appraisers. Many observers believe that the use of independent appraisers -- who don't work for a company that has the goal of making loans --would have resulted in fewer of the ebulliently optimistic appraisals that contributed to a run-up in home prices that was destined to come crashing down.

The move will force lenders like Countrywide Financial (NYSE: CFC) to sell their appraisal operations. The New York Times reported that "As defaults and foreclosures have surged in the last year, regulators and industry analysts have raised pointed questions about the independence of appraisers. Because they rely on banks and brokers to give them additional business, appraisers often feel pressured to value a home at prices that match or exceed loan amounts."

That took about fifteen seconds on Bing. I could choose from dozens of similar stories. This was even covered in Congressional hearings for Christ's sake.

http://articles.sfgate.com/2008-03-..._in-house-lender-appraisers-one-stop-shopping
http://appraisalnewsonline.typepad.com/appraisal_news_for_real_e/mortgage_fraud/

 

[Jadow]

I'm shocked. Shocked I tell you.

I have to say, I can't think of a single Obama policy or initiative that has passed my personal common sense smell test.

Makes me wonder if I'm insane and the rest of the world is sane, or the rest of the world is insane and I'm the only sane one.

 

[Vic]

possum, what part about "Granted, relationships between lenders and appraisers may have been occasionally too close during the boom (something that has been corrected now), but there were NEVER "in-house" appraisers" did you not understand?

And I noticed you didn't even bother to address this: "The irony of what you're saying there is that the valuations for these mods, which you call "true" market value (as though market values don't fluctuate), are FAR more "in-house" than any appraisal done during the boom. For one thing, they're not even appraisals, they're BPO's, which are done by realtors, and usually just exterior drive-by's."

 

[werepossum]

possum, what part about "Granted, relationships between lenders and appraisers may have been occasionally too close during the boom (something that has been corrected now), but there were NEVER "in-house" appraisers" did you not understand?

And I noticed you didn't even bother to address this: "The irony of what you're saying there is that the valuations for these mods, which you call "true" market value (as though market values don't fluctuate), are FAR more "in-house" than any appraisal done during the boom. For one thing, they're not even appraisals, they're BPO's, which are done by realtors, and usually just exterior drive-by's."

For goodness sake, read the quotes. If Fannie Mae and Freddie Mac announce that they will no longer buy loans from lenders with in-house appraisers, obviously they were buying loans from lenders with in-house appraisers. Notice they did not announce they were no longer buying loans from flying monkeys or talking rocks. If lenders like Countrywide must now sell their in-house appraisal units, obviously they HAD in-house appraisal units. Can't force a company to sell off what it never had.

I didn't address your second point because it supports my point that this is a bad bill which does not do what it is supposedly designed to do, should never have been started, and should be ended. And no, I am not arguing that it should be more socialist, I'm arguing that it should go away. Whether another program should be started that is even more socialist and might actually do what this bill is touted to do is a different question.

 

[Vic]

For goodness sake, read the quotes. If Fannie Mae and Freddie Mac announce that they will no longer buy loans from lenders with in-house appraisers, obviously they were buying loans from lenders with in-house appraisers. Notice they did not announce they were no longer buying loans from flying monkeys or talking rocks. If lenders like Countrywide must now sell their in-house appraisal units, obviously they HAD in-house appraisal units. Can't force a company to sell off what it never had.

/facepalm

Countrywide owned an appraisal vendor, known as Landsafe. Any lender could order an appraisal through Landsafe for a property anywhere in the US and Landsafe would then contract a licensed appraiser in that area. It was designed as a convenience for lenders who do business across the country, and it also made it so individual loan officers couldn't make direct contact with the appraiser (which is now required by law). While the relationship became far too cozy, these were not "in house" appraisers. They were not employed by Countrywide, and they did business with other lenders.

I didn't address your second point because it supports my point that this is a bad bill which does not do what it is supposedly designed to do, should never have been started, and should be ended. And no, I am not arguing that it should be more socialist, I'm arguing that it should go away. Whether another program should be started that is even more socialist and might actually do what this bill is touted to do is a different question.

So now you're supporting your point by contradicting one of your earlier arguments? 🙄
You said earlier that the valuations done during the boom were wrong and that the valuations being done now represented "true market value." Now you're chasing your tail and saying that they're both crap. LOL.

Look, all you brainwashed partisans need to get a clue. If McCain had been elected, then HAMP would have been called the McCain plan. If McCain had been elected and then had a heart attack and died while taking the oath of office, then it would have been called the Palin plan. If Ron Paul had been elected, it would have been called the Paul plan. It was coming regardless and for a reason.

And that reason is that during the boom, countless loans were written that we all now recognize should not have been written. The borrowers of those loans are now being offered 4 choices, in this order: (1) continue making your payments if you can afford them, (2) provide income documentation to prove that you can afford the property at or above its present market value and your loan may be re-written ONCE to an affordable payment, (3) initiate a short sale or deed-in-lieu process as an exit strategy from the property and you may receive full settlement and even "cash for keys" relocation compensation, or (4) proceed to foreclosure.

That's HAMP. It's a uniform platform for cleaning up the mess left behind after the big party. The big re-write. Whatever else you guys think it is is nuts.