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Author: Subject: Now We Bail Out Irresponsible Borrowers

Extreme Peach





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  posted on 11/11/2008 at 02:35 PM
http://biz.yahoo.com/ap/081111/meltdown_mortgages.html

I should have bought a home I knew i couldn't afford. Just act stupid and wait for the government to fix it.

 
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Zen Peach



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  posted on 11/11/2008 at 02:55 PM
Hopefully this includes a parallel plan to control lending so that people will no longer be offered loans where they have little understanding of terms and little or no chance of being able to repay.

 

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Zen Peach



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  posted on 11/11/2008 at 02:55 PM
A modification is not a bailout, and thousands of those are being done all the time. Why the anger?

 

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Zen Peach



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  posted on 11/11/2008 at 03:07 PM
quote:
A modification is not a bailout, and thousands of those are being done all the time. Why the anger?
No anger on my part, BHawk. I think history has shown that there is a problem in the mortgage lending business and that the solution needs to affect both front end (loan) process as well as further down the line (foreclosure). It's worrisome that so many people ended up with loan agreements they had little hope of being able to maintain.

 

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Zen Peach



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  posted on 11/11/2008 at 03:11 PM
quote:
quote:
A modification is not a bailout, and thousands of those are being done all the time. Why the anger?
No anger on my part, BHawk. I think history has shown that there is a problem in the mortgage lending business and that the solution needs to affect both front end (loan) process as well as further down the line (foreclosure). It's worrisome that so many people ended up with loan agreements they had little hope of being able to maintain.


I'm not too happy about helping people that made woefully bad financial decision for the instant gratification of owning more house than they could afford, either. Like you say, the fault lies on both sides of the transaction.

 

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Zen Peach



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  posted on 11/11/2008 at 03:15 PM
quote:
quote:
A modification is not a bailout, and thousands of those are being done all the time. Why the anger?
No anger on my part, BHawk. I think history has shown that there is a problem in the mortgage lending business and that the solution needs to affect both front end (loan) process as well as further down the line (foreclosure). It's worrisome that so many people ended up with loan agreements they had little hope of being able to maintain.


I agree...my comment was directed at LikeToSmoke. My bad for not using the quote brackets.

 

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True Peach



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  posted on 11/11/2008 at 03:42 PM
To me, my feelings about it depends on why the homeowner is behind on their payments. If its a health reason where the homeowner can not work, or was laid off from their job, I think they need the help. I say do what ever you can to help out the mortgage holder. Renegotiate the loan, add some years to the mortgage.

If it is someone who is working and have gotten their self in so much debt from buying a lot of toys and over extended their credit, that is why we have bankruptcy.

 

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Extreme Peach



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  posted on 11/11/2008 at 04:26 PM
It does tick me off that bad judgment is being rewarded. I say let the foreclosures continue. Iíve always done the right thing in life and where does it get me? On the hook for other peopleís irresponsibility. The value of my home goes down as well because of this nonsense.
 

Maximum Peach



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  posted on 11/11/2008 at 04:31 PM
Join the club. I just retired and wanted to sell my home and build my retirement home on my land in South Georgia. But the value of the home I live in now has dropped to the point I will have to wait!

 

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Zen Peach



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  posted on 11/11/2008 at 04:32 PM
quote:
It does tick me off that bad judgment is being rewarded. I say let the foreclosures continue. Iíve always done the right thing in life and where does it get me? On the hook for other peopleís irresponsibility. The value of my home goes down as well because of this nonsense.


I still don't see how bad judgement is rewarded. If you get your loan modified you still have to pay it back. If you live on a street full of modified mortgages held by people staying in their homes, that street will have more value than if it was filled with empty foreclosures. No one is coming in and forgiving entire loan balances or paying anyone's loan off.

 

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Extreme Peach



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  posted on 11/11/2008 at 04:43 PM
They will be restructuring these loans at the homes present value and with different terms. So if I bought a $500,000 house a couple years ago with no money down and an adjustable rate mortgage I shouldnít have to adhere to that agreement. My house is now worth $200,000 and I canít afford to pay ballooned mortgage. I should keep the house, get a new fixed rate mortgage, and only have to pay $200,000 for the same house I agreed to pay $500,000 for.

The winners are the people who paid more than they could afford and took out bad mortgages.

 

Zen Peach



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  posted on 11/11/2008 at 04:46 PM
quote:
They will be restructuring these loans at the homes present value and with different terms. So if I bought a $500,000 house a couple years ago with no money down and an adjustable rate mortgage I shouldnít have to adhere to that agreement. My house is now worth $200,000 and I canít afford to pay ballooned mortgage. I should keep the house, get a new fixed rate mortgage, and only have to pay $200,000 for the same house I agreed to pay $500,000 for.

The winners are the people who paid more than they could afford and took out bad mortgages.



That's a very, very extreme example. Oh well.

 

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Sublime Peach



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  posted on 11/11/2008 at 04:46 PM
...

[Edited on 12/24/2008 by jerryphilbob]

 

World Class Peach



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  posted on 11/11/2008 at 04:56 PM
Seems like the help should go to those who put down the larger down payments, versus those who put little down.

Can't lose what ya never had, as the saying goes.



This Loan modification seems like a smart move to me, since uncle already has bailed out those troublemaking cousins freddie and fannie.

Uncle doesn't need more houses that he can't sell, better to get money flowing into uncles pocket...





so it can be wasted somewhere else....

 

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Universal Peach



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  posted on 11/11/2008 at 05:36 PM
quote:
Screw the people, lets keep bailing out big business. Why help the people that were swindled by these loans in the first place? Isn't it buyer beware? Oh yeah, that was when we had capitalism, my bad.



As much as you and many others would love to see families living in poverty in their cars and minivans its probably not the best thing for the US economy and future generations.

Social security, disability pensions and unemployment insurance are all programs that may not seem to be too capatilist in their nature but are needed to help out the greater good.

Have some compassion, lifes too short and things could change in your life overnight or on the way to work tomorrow.

 

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Maximum Peach



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  posted on 11/11/2008 at 09:18 PM
At the end of the day its better than a foreclosure. That just starts bringing down home prices even more. On the securitized part of the business it does introduce a new type of risk though, modification risk. All of a sudden a 30 year mortgage becomes a 40 year mortgage!!
 

Zen Peach



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  posted on 11/12/2008 at 08:30 PM
Of the 2.8 million people who will go into foreclosure, it is estimated only 200,000 will get their loans restructured. The rest will lose their homes.

http://www.mcclatchydc.com/251/story/55692.html

So what about the rest of them? When they revolt, they might be placed in Fema camps. That is my prediction, you simply cannot have more than 2 million homeless people who have lost their houses and are angry demanding Washington do something when they cannot do more.

 

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