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

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drebo said:
Reading comprehension fail.

Look at the post two above yours. $75 billion dollars to save 340,000 mortgages. That's $220,000 per house. I'd bet most of those houses could be paid down FULLY with $220,000. More gov't waste and inefficiency.
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yeah pretty f'n weak.
 
classy said:
Ummm, the article doesn't say these people are headed back to foreclosure. The article doesn't know why these people left the program or that these people will end up in foreclosure.
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Sounds like it right here (from the article):

A major reason so many have fallen out of the program is the Obama administration initially pressured banks to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out.

Sooooooo, you want a loan and those pesky banks want you to actually show them how much you make...god damn ebil repugs.
 
dmcowen674 said:
Cool

You Republicans should be thrilled because clearly people should not be in houses anyway.
Click to expand...

How many people have you cosigned loans for? You know people who can't afford a house on their own? How many?

People should only be in a house if they can pay 20%, and get a 15 year mortgage. Otherwise the best course of action is to rent.
 
rudder said:
People should only be in a house if they can pay 20%, and get a 15 year mortgage. Otherwise the best course of action is to rent.
Click to expand...

I disagree. There's nothing wrong with a 30-year loan. There's also nothing wrong with low downpayment loans (such as FHA loans) when combined with a reasonable term length and fixed interest rates. For instance, FHA loans are required to pay insurance on their loans to protect the bank should the borrower default.

The problem wasn't conforming loans (15-year, 30-year, 30-year FHA). The problem was that bankers were required to make a certain amount of high-risk loans to people who wouldn't have qualified for even an FHA loan so they had to create new types of loans and push them on to borrowers who didn't have the financial wherewithal to realize what was going on. Oh, and that the government promised to insure this type of lending.
 
joebloggs10 said:
Nope, it doesn't.

1,240,000 borrowers
436,000 have dropped out of the program. That's ~35%.
340,000 have received permanent loan modifications and are making payments on time. That's ~27.5%.
That leaves 464,000 who either are in the program and haven't been helped or were "helped" and still can't make the payments.

So, 60% are NOT doing ok, only 27.5% are.
Click to expand...

While the numbers look bad, that still means the program has saved half a million homes or so that were certainly headed for default.

I want more details about why people dropped en-masse all at once, i would imagine some kind of auditing disqualified a large pool.

I feel for both sides on this, the banks gave people WAY more money than they could reasonably afford to pay back, and the people failed to budget properly beforehand and realize that they couldn't afford it.

The problem is in my opinion one side was irresponsible (the borrower not budgeting beforehand) and one was predatory and negligent (the lender).

The game was just this: we saddle these people with more debt than they can handle, repo their house which is an appreciating asset, sell it to someone else, and STILL saddle them with the remaining interest and other fees, these vipers deserve to take the hit just as bad as the borrowers, and TARP let them off the hook.

As an economics major i understand the importance of TARP to keep the world economy stable, but it irks me to see the swindlers getting the parachute and the not too bright borrower getting bankruptcy.
 
drebo said:
I disagree. There's nothing wrong with a 30-year loan. There's also nothing wrong with low downpayment loans (such as FHA loans) when combined with a reasonable term length and fixed interest rates. For instance, FHA loans are required to pay insurance on their loans to protect the bank should the borrower default.

The problem wasn't conforming loans (15-year, 30-year, 30-year FHA). The problem was that bankers were required to make a certain amount of high-risk loans to people who wouldn't have qualified for even an FHA loan so they had to create new types of loans and push them on to borrowers who didn't have the financial wherewithal to realize what was going on. Oh, and that the government promised to insure this type of lending.
Click to expand...

While this is true to some extent, the banks were not forced to lend more than the borrower could pay. This is where it went from meeting regulatory needs to predatory profiteering on the people who couldn't foresee the financial train wreck they were getting themselves into.
 
so, what about the other 66% who this program helped? I can say from first hand experience that it helped my brother stay in the house he's in right now.
 
Acanthus said:
While this is true to some extent, the banks were not forced to lend more than the borrower could pay. This is where it went from meeting regulatory needs to predatory profiteering on the people who couldn't foresee the financial train wreck they were getting themselves into.
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Oh, I have no doubt that there was predatory lending going on. However, lending like that should not have been market-viable. There was intervention in the market that allowed banks to lend money to people they knew to be unsuited.

I don't agree with the assessment that the issue was created entirely by the banks. Lots of the borrowers also knew they didn't really have the financial capability to live in a McMansion. Builders, too, fostered a lot of this behavior by building bigger and bigger homes. There's a lot of blame to go around, from the gov't to the banks to the builders and to the borrowers. I'm sure there are other people in there, too.
 
drebo said:
I disagree. There's nothing wrong with a 30-year loan. There's also nothing wrong with low downpayment loans (such as FHA loans) when combined with a reasonable term length and fixed interest rates. For instance, FHA loans are required to pay insurance on their loans to protect the bank should the borrower default.

The problem wasn't conforming loans (15-year, 30-year, 30-year FHA). The problem was that bankers were required to make a certain amount of high-risk loans to people who wouldn't have qualified for even an FHA loan so they had to create new types of loans and push them on to borrowers who didn't have the financial wherewithal to realize what was going on. Oh, and that the government promised to insure this type of lending.
Click to expand...

Required? They made these loans because they fraudulently slapped triple A on them, rolled them into securities, pension and 401k funds bought them and they laughed all the way to the bank. Nothing required, fraud.

Also FHA and VA have a huge default rate relative to conventional loans. With no skin in the game, like 20%, one is more likely to stop paying not to mention tax payers pick up the tab.
 
Zebo said:
Required? They made these loans because they fraudulently slapped triple A on them, rolled them into securities, pension and 401k funds bought them and they laughed all the way to the bank. Nothing required, fraud.

Also FHA and VA have a huge default rate relative to conventional loans. With no skin in the game, like 20%, one is more likely to stop paying not to mention tax payers pick up the tab.
Click to expand...

Like I said, there are a lot of people at fault. FHA 30-year loans may have a higher default rate than standard 30-year conforming loans, but I guarantee you it's noting even close to 5 year ARMs.

Ratings agencies should be shot. I am in agreeance with you on that. My point was mostly that FHA loans are not inherantly bad, and with proper fact-finding, credit checks, and PMI, FHA loans should not be any more risky than standard 30-year conforming loans.
 
Slew Foot said:
http://finance.yahoo.com/news/Borrowers-exit-troubled-Obama-apf-887634101.html?x=0

Obama administration initially pressured banks to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out.





Good to see that the guy who said in the state of union address, "Im for personal responsibility.", is so willing to hand out your tax dollars to stupid idiots.
Lets see here, we turned the economy to crap by loaning out too much money to people who didnt have a pot to piss in, and well get back on track by doing the same thing? Genius!
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This is total BS...!
This delusion that banks have ever "gave away" money to wana-be home owners is and has always been total bunk. Anyone that has ever bought a home and needed a loan from a bank knows their credit history was raked thru with a fine toothed comb. A credit score of 700+ has always been the basic requirement for any home mortgage.
Bank do not give away money. They never have.
This delusion is what they want you to believe, to swallow, as to justify banks were in a pickle of a mess, to sell the a gov bailout idea. This was dreamed up during the Bush admin to sell the bailout (shove it down our throats, actually). The acting, the tears, the cold sweats just shows these guys should have been making movies in Hollywood, not employed by the US gov.

Face it, we fell for this hook line and sinker. And they knew we would with a little help from a few panic mode faces in congress, to seal the scam.

Banks are doing just fine.. thank you. They always have been.
Poor wages, and the attack on the middle class going back to the Reagan admin, is all you need to know that drives people into foreclosure today.
Not mortgage loans to kids working at McDonalds making $7 an hour, from banks.
Bank greed went into hyper drive. The Bush admin helped that along full steam.
CEO's make a killing, but they wanted more. Banks make a killing, but they also wanted more. Congress loves their bank funded campaign contributions, but congress too wanted more.

Banks hope people to fail. They collect from Fannie and Freddie, then they collect whatever payments the homeowner had paid, and then to top it off they collect the house.
What a deal!!!

No one can pressure a bank to give a loan...period.
No president, no congress, no law.
Banks only do what they want to do when they see $$$ in it for them.
 
Huh? The credit score for a mortgage needed is generally above 620. I applied for three loans and each had a 620 requirement.
 
sportage said:
This is total BS...!
This delusion that banks have ever "gave away" money to wana-be home owners is and has always been total bunk. Anyone that has ever bought a home and needed a loan from a bank knows their credit history was raked thru with a fine toothed comb. A credit score of 700+ has always been the basic requirement for any home mortgage.
Bank do not give away money. They never have.
This delusion is what they want you to believe, to swallow, as to justify banks were in a pickle of a mess, to sell the a gov bailout idea. This was dreamed up during the Bush admin to sell the bailout (shove it down our throats, actually). The acting, the tears, the cold sweats just shows these guys should have been making movies in Hollywood, not employed by the US gov.

Face it, we fell for this hook line and sinker. And they knew we would with a little help from a few panic mode faces in congress, to seal the scam.

Banks are doing just fine.. thank you. They always have been.
Poor wages, and the attack on the middle class going back to the Reagan admin, is all you need to know that drives people into foreclosure today.
Not mortgage loans to kids working at McDonalds making $7 an hour, from banks.
Bank greed went into hyper drive. The Bush admin helped that along full steam.
CEO's make a killing, but they wanted more. Banks make a killing, but they also wanted more. Congress loves their bank funded campaign contributions, but congress too wanted more.

Banks hope people to fail. They collect from Fannie and Freddie, then they collect whatever payments the homeowner had paid, and then to top it off they collect the house.
What a deal!!!

No one can pressure a bank to give a loan...period.
No president, no congress, no law.
Banks only do what they want to do when they see $$$ in it for them.
Click to expand...

Evil rich Republicans! Wow, must be nice to have one stock answer for all possible evils, saves a lot of time you could otherwise spend thinking.
 
sportage said:
This is total BS...!
This delusion that banks have ever "gave away" money to wana-be home owners is and has always been total bunk. Anyone that has ever bought a home and needed a loan from a bank knows their credit history was raked thru with a fine toothed comb. A credit score of 700+ has always been the basic requirement for any home mortgage.
Bank do not give away money. They never have.
This delusion is what they want you to believe, to swallow, as to justify banks were in a pickle of a mess, to sell the a gov bailout idea. This was dreamed up during the Bush admin to sell the bailout (shove it down our throats, actually). The acting, the tears, the cold sweats just shows these guys should have been making movies in Hollywood, not employed by the US gov.

Face it, we fell for this hook line and sinker. And they knew we would with a little help from a few panic mode faces in congress, to seal the scam.

Banks are doing just fine.. thank you. They always have been.
Poor wages, and the attack on the middle class going back to the Reagan admin, is all you need to know that drives people into foreclosure today.
Not mortgage loans to kids working at McDonalds making $7 an hour, from banks.
Bank greed went into hyper drive. The Bush admin helped that along full steam.
CEO's make a killing, but they wanted more. Banks make a killing, but they also wanted more. Congress loves their bank funded campaign contributions, but congress too wanted more.

Banks hope people to fail. They collect from Fannie and Freddie, then they collect whatever payments the homeowner had paid, and then to top it off they collect the house.
What a deal!!!

No one can pressure a bank to give a loan...period.
No president, no congress, no law.
Banks only do what they want to do when they see $$$ in it for them.
Click to expand...

As someone who was on a Community Reinvestment Act (CRA) committee at a bank that received a poor rating, I can state that you are incorrect. Failure to cater to our "CRA area" resulted in some pretty hefty penalties.

Our bank was located in a poor neighborhood, but did make some loans to geographically wealthier areas. CRA basically forced us to make loans to poorer people. While we could attempt to ameliorate the credit risk, the fact is that poor people are bigger risks than rich people, in general.
 
Quote:
Originally Posted by dmcowen674
Cool

You Republicans should be thrilled because clearly people should not be in houses anyway.


thegimp03 said:
Clearly, people shouldn't be in houses that they couldn't afford in the first place.
Click to expand...

So you should be thrilled Obama failed
 
The program worked exactly as it was intended to. It was never meant to help "the people" it was meant to help the banks and it did. Just like the home buyers credit that allowed people to get FHA loans well above any sane loan requirements (such as debt ratios, LTV, etc) with little to no skin in the game.
 
Well we wasted the first pile of money, what's a little more?

http://finance.yahoo.com/news/Calif...tml?x=0&sec=topStories&pos=main&asset=&ccode=



751animated-obama-money.gif


Its funny because its true
 
Meh. The whole program was both practical and political. It was obvious that many of the homeowners who went with the program would ultimately fail, but it stretched out the losses over time, which was better for the banks and the economy in general. Not that it truly stabilized what is is impossible to truly stabilize, overpriced anything, but it helped to prevent a deep trough in real estate prices, at least for the time being.

And it was political, too, because bailing out the banks demanded something for homeowners, as well.

Failing banks really should have been nationalized, their upper management sacked, reorganized and sold back into private hands. That wasn't going to happen under the watch of the Bush Admin, and anybody with a lick of sense knows it. Nor would it have been wise to allow banking to collapse, either, so we got the bailout. Obama had little choice but to follow through once that had begun. What he woulda, coulda, wanted to do instead is meaningless.

We'll be lucky if 50% of the program participants come through w/o foreclosure, but it never really was about them, anyway, but rather about the larger economy... about preventing cascading collapse where sound loans and businesses are swept away with the rest...

Don't like that? Then don't vote for Deregulating free market demagogues who'll let the economy overheat to create the illusion of prosperity...
 
Home buyer credits, teaser interest rates where people can't afford the actual rate, mortgage interest deductions, etc -- don't all of these keep the housing bubble going? You're artificially raising the demand for housing, by putting buyers in the market for homes.

Repeal the mortgage interest tax deduction and no more home buyer tax credits.
 
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