Obama gonna pay my mortgage

[OutHouse]

so....... who do you think should eat the cost?

me

 

[Darwin333]

You act like a foreclosure is free to the bank. Its not. There are fees related to the foreclosure, repairs to the home, and real estate agent fees. There are costs to having an empty property on the books - that's money that could be invested.

You also forgive the banks of all responsibility. It takes two to tango. The bank wrote a mortgage for a property in an obvious bubble market and did a shitty job evaluating the client for ability to pay.



Apples and oranges. Cars are easy to repossess in both the legal and physical sense and are of much lower value. They also aren't part of a massive bubble nor was there shady lending involved.

Do you honestly think that if this plan will actually save the banks money that they wouldn't have already done it by now?

Another question, does this program allow the banks to keep the assets valued at the original value as they currently are or does it force them to at least reduce the value by 10% or to actual market?

 

[sactoking]

This is the program announced in March that everyone lambasted at the time as being useless b/c it was purely voluntary on the part of the banks. Not only does the program have no teeth (since no sane bank would voluntarily participate) but it only took 6-7 months to implement.

 

[IGBT]

billions and billions.

 

[mchammer187]

from the OP

The Federal Housing Administration will allow lenders to give these borrowers refinanced loans if the lender agrees to forgive at least 10 percent of the original mortgage amount.

I don't see the big problem here

Lender can agree to eat 10% and have a government backed loan.

Don't they still have the option to foreclose or am I missing something?

 

[spidey07]

Article was updated by AP. It looks like we ARE PAYING FOR IT.

Even so, Keefe, Bruyette & Woods Inc. analyst Bose George called the government's estimates "extremely optimistic." George said investors are likely to only offer refinances to borrowers who have seen their home values plunge to the point where they owe 40 percent more than their home's current value. Those homeowners, he said, are in danger of walking away from their mortgages.

"We're assuming that the impact is minimal," he said.

The program is funded with $14 billion from the Obama administration's existing $75 billion mortgage assistance program. That money will be used to cover incentive payments to lenders and losses from borrowers who fall back into foreclosure.

The new refinancing program takes a different approach. It allows investors in mortgage-backed securities to evaluate their holdings and select borrowers that will be offered refinanced mortgages guaranteed by the FHA.

The theory is that there are some loans that investors simply want to unload because they have a high risk of default.

However, when faced with the choice between slashing the amount borrowers owe on their home loans and foreclosing, lenders have generally chosen to foreclose on borrowers. Many experts doubt the new program will persuade investors to change their minds.

 

[Binarycow]

so basically this bill is nothing more than a busy body that gives the impression that something is being done but in reality is useless as an asshole on the elbow for all the tax payers' money spent writing it up?

 

[Illusio]

I'm all for keeping existing home owners in their home. Right now my property values are getting killed by people walking away from their mortgages. And it's not like I'm in an area with 400k houses (I bought my house for 176k). I would love to sell now (my new job is 30 miles away), but if I sold now I'd take a 40k loss.

Foreclosures hurt everyone in the neighborhood. Not just the "dumb people" that took out the loans.