[blind-bat]

No you're not giving anything to anyone. You're deferring payment. When a banf forecloses it goes as bad debt and they lose. Plus, at least in the houses I've seen they are stripped. Everything. Wiring, A/C you name it. Instead of doing that the banks would allow the person to stay in the house but at reduced payment. It would also require cooperation of county government to work with them on the tax side. By someone living in the house at least it's maintained and keeps the value up for neighbors.

Side note. Home owner insurance. State Farm sucks. Idiots have pulled out of Fla on homeowners insurance. I had all my insurance with them. They cancelled all homeowners ins. in Florida so I canceled them for the auto insurance. Teach them a lesson. Use any other company BUT State Farm.

What is overlooked is that some of those houses are probably stripped by the very same people that you're saying the bank should make a deal with. The very same people that are trying to screw the bank before they give back the house. Seems to me to be asking the banks to turn the other cheek & get that one slapped too.

Also, banks have to have assets to back their loans. There is a proportion they need to maintain by law. Foreclosing and writing off the loss is easier than carrying a risky loan on their part because it'll reduce the amount of assets/cash security they need to have on hand to cover the loans.

[little laker]

What is overlooked is that some of those houses are probably stripped by the very same people that you're saying the bank should make a deal with. The very same people that are trying to screw the bank before they give back the house. Seems to me to be asking the banks to turn the other cheek & get that one slapped too.

Also, banks have to have assets to back their loans. There is a proportion they need to maintain by law. Foreclosing and writing off the loss is easier than carrying a risky loan on their part because it'll reduce the amount of assets/cash security they need to have on hand to cover the loans.

personally I feel that graphicgr8s is trying to find a reasonable solution to a major problem.

Sure some of the people want nothing more than to screw the banks, and there's nothing that can be done about them at this time.
However most people are pretty honest, and i'm sure would welcome a way out of the bind they may have gotten themselves into.

What is overlooked is that some of those houses are probably stripped by the very same people that you're saying the bank should make a deal with. The very same people that are trying to screw the bank before they give back the house. Seems to me to be asking the banks to turn the other cheek & get that one slapped too.

You know, there's always going to be a few scumbags. You use the word 'some' but you hide it in a broadly generalised statement. You're not a politician are you by any chance.

Also, banks have to have assets to back their loans. There is a proportion they need to maintain by law. Foreclosing and writing off the loss is easier than carrying a risky loan on their part because it'll reduce the amount of assets/cash security they need to have on hand to cover the loans.

In California the amount of foreclosed homes put onto the market by the banks was just the tip of the iceberg. If they had released them all together, best way I can describe it is via a joke I heard last night; Q - What is a trillion dollars? A - Think of the value of your home... then add a trillion dollars.
If it was like that in California, it was like that in other states. Something does need to be done to keep people in their homes. No matter how bad the news reports say things are, you can bet that the reality is much, much worse.

[little laker]

I'm grabbing out my snowshoes, and heading to hell for a couple of days.

It must have frozen over since graphicgr8s and Damn Brit more or less agree on something

[slomojoe]

Ideally it is exactly what should happen in most of these foreclosure cases, but I think the main reason why it isn't done is that mortgage lenders have investors, who ultimately are the ones who stand to make or lose money, and on principle they could object to the restructuring of existing contracts, which should be binding. Such a disgruntled investor could then sue the lender, whether or not the loan adjustment was a wise move in the long run (in the short run, of course it would look like a diminished return).

The administration had proposed legislation earlier this year that would have allowed judges to mediate the readjustment of loan terms to stave off foreclosures, which would have had the added effect to insulate lenders from any potential lawsuits, but mortgage companies opposed it because they feared judges would have been more sympathetic to the borrowers, and conservatives in Congress (both Republicans and Democrats) voted against it and it was defeated.

What is overlooked is that some of those houses are probably stripped by the very same people that you're saying the bank should make a deal with. The very same people that are trying to screw the bank before they give back the house. Seems to me to be asking the banks to turn the other cheek & get that one slapped too.

Also, banks have to have assets to back their loans. There is a proportion they need to maintain by law. Foreclosing and writing off the loss is easier than carrying a risky loan on their part because it'll reduce the amount of assets/cash security they need to have on hand to cover the loans.

So what's your point? If it's the mortgagee doing it anyway it'll happen either way. I believe most of the people just got in over their heads and would relish a chance to save their home. If you can help 90% of the people do it. If it is the borrower stripping the house then the bank is still in the same situation. It's gonna have dead weight on the books either way. Maybe they can get a few months of payment out of it.
Just because I am a conservative doesn't mean I don't have compassion. And Gary, back in 95 the Fed lowered the amount of capital the banks had to have on hand. Problem is no one learned from the S&L failures.

[blind-bat]

So what's your point? If it's the mortgagee doing it anyway it'll happen either way. I believe most of the people just got in over their heads and would relish a chance to save their home. If you can help 90% of the people do it. If it is the borrower stripping the house then the bank is still in the same situation. It's gonna have dead weight on the books either way. Maybe they can get a few months of payment out of it.
Just because I am a conservative doesn't mean I don't have compassion. And Gary, back in 95 the Fed lowered the amount of capital the banks had to have on hand. Problem is no one learned from the S&L failures.

Let's face the fact, a lot of these people got "in over their heads'" due to GREED. Some took out mortgages in the last housing boom in the hopes that they could flip property. Some even expected real estate to keep going strong & borrowed against their equity. So to say they go in over their heads is to really understating how they got there.

As far as the bank carrying dead weight,...look at it this way. If the bank only has a million dollars to loan & needed to make the most profit off that loan for their shareholders, would they;

A - do background checks and loan to people & companies that are solid & have assets to chase in case of defaults.

B - Restructure an existing loan to help a current mortgagee who's property value does not cover the outstanding mortgage.

C - Foreclose, take an immediate write off & not have what you take off the books applied against the million dollars to loan to good customers to keep an income stream.

Compassion, yes I feel sorry for a lot of those people out there that are being foreclosed on. It's just my opinion that if there is general movement for banks to cut deals with borrowers instead of asking the borrowers to own up to their responsibility will only hurt the shareholders.

No matter how it's spun, It'll still come out of the pockets of those that are not in default in the end since retirement funds, mutual funds etc are still holding banking stocks.

BTW, who's Gary???... also, Congrats on the very cute baby.

[lithos]

Here's a question for all out there. A home owner is going to be foreclosed on. how come the bank doesn't try to work something out that the mortgagee can afford? Wouldn't that keep a person in a home, the house off the banks books and when things get better (if they ever do) the house will not have been stripped of all the appliances, cabinets, wiring, etc? And the bank would get some money on its books. Makes sense to me anyway.

Sheriff tells Deputies not to help in foreclosures

It's not quite the same in this case, but it's a start. It's more about protecting renters who have no idea they're about to be evicted (because they're not the owners of the house.) But judging from the sheriff's response, I daresay he's pretty pissed off with more people ending up homeless for no real good reason.

Of course there's a reason to keep people in the houses. The wiring won't get stripped out, lawns and gardens won't get overgrown and choked with weeds, junkies and rats won't move in, bored kids don't chuck rocks through the window and tag it with graffiti, the paint on the house that's meant to be there won't peel...basically, it'd be maintained. And when (if?) the market recovers, what's gonna be easier to sell - house that's just had someone move out, or a house that, say, had the wiring hocked to buy smack, on which the seller OD'd in the living room and wasn't found until someone drove past three weeks later and smelled him?

It would be in everyone's best interests to not turf people out. Houses would lose less value, there wouldn't be more homeless people to deal with...but giving away something for free lowers prices. Even if it means losing money in the long run. It's the principal of the thing, dammit.

[Parallax]

................................
the banks dont give a crap, they need money, and they need money fast, they dont need ALL the money, because they themselves are borrowing, but they need that bare minimum, and they couldnt give a rats ass if someone is going to end up on the streets, just so that one small bank can survive.............................

And now, making the problem even worse, they (the banks) know that all the have to do cry and and hold out their hands, and the government will reimburse them for their bad-business-decision losses with the taxpayer's money. The bailout established a principal of "do whatever you want, you can't possibly loose" for the banks.

[Alfisti]

That's pretty much the problem from the buyers POV. It happened in England in the Eighties, and it's been happening over here.
The simple fact of the matter is; A house should be a home, not a quick turnaround investment.
If people had had that philosophy, there would have been no bubble, no predatory lending and a lot fewer foreclosures. It's easy to blame the greed of the banks but many of the individuals who have lost out aren't completely innocent.

At the risk of sounding like a pinko commie, this is the government's role. I come from the capitol of absurd real estate, Sydney, and IMHO the key driver is the lack of incentives to invest in your pension (we call it superannuation) and the lack of penalties for capitol gains on your second home.

The city has gone from position 2 on the world's best cities to live in to position 14 because you need $800K for a decent home ... it's ****ing insane.

At the risk of sounding like a pinko commie, this is the government's role. I come from the capitol of absurd real estate, Sydney, and IMHO the key driver is the lack of incentives to invest in your pension (we call it superannuation) and the lack of penalties for capitol gains on your second home.

The city has gone from position 2 on the world's best cities to live in to position 14 because you need $800K for a decent home ... it's ****ing insane.

In quite a few places in Florida it went from 100K to 450K and back down to 150K in a short time. My house to build was 136K. I could have easily have sold it for over 400K. real word value to me has always been about 250K and that's what it appraised at less than a year ago. Thing is here in FLA salaries have not increased to match either the housing or the tax burden.

[Alfisti]

So what's the problem frankly? 250K is peanuts.

So what's the problem frankly? 250K is peanuts.

Compared to California, that's actually peanut.

Depends on where you live as to whether it's peanuts or not. Most working stiffs don't make much here. Between the property taxes and homeowners insurance, if you can get it it's hard to make ends meet. I am a little better off is all. I make a touch more and I built at the right time and for less than the 250K.