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.

That sounds like socialism to me.
The same thing was happening in the late eighties in Britain. People were getting foreclosed on and put on the street. Whereupon, social security kicked in and the state had to find accommodation for them in hotels and bed and breakfast establishments. The sick thing about that is that it would have been far, far cheaper for the state to pay the mortgage payments and let them stay in their own home.
I heard on the news that they are looking at the possibility of allowing people to rent their homes from the banks until such time as they can afford the mortgage payments again as an alternative to kicking them out.

[Gooshin]

patience

or i should say, a lack thereof..

you guys have so many banks in the states, with everyone and their pet frogs being able to get mortgages, i'm surprised half the nation isnt the poorhouse already.

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.

Now if the bank was government controlled... then your logic would make perfect sense.


as a point of reference, canada has like 5 banks and a small assortment of lending institutions, usually very low key and available to fwe... something to think about.

FIVE, for the entire country.

[er1kksen]

Because something like that might help mitigate the economic crisis?

I mean, who really benefited from the great depression in the long run? The banks. They got a foothold in government that previous government administrations had fought tooth and nail to keep from occuring.

patience

or i should say, a lack thereof..

you guys have so many banks in the states, with everyone and their pet frogs being able to get mortgages, i'm surprised half the nation isnt the poorhouse already.

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.

Now if the bank was government controlled... then your logic would make perfect sense.


as a point of reference, canada has like 5 banks and a small assortment of lending institutions, usually very low key and available to fwe... something to think about.

FIVE, for the entire country.

Serge, before the deregulation of the banks it wasn't easy to get a mortgage. You had to put at least 10% down and if you put less than 20% down you paid PMI.You couldn't borrow more than what the house appraised at. You actually had to have a good credit score. They didn't have a large subprime market before the 1990's Credit Unions are not in the same situation because they didn't loan more than what something was worth. The kept their restrictions.

That sounds like socialism to me.
The same thing was happening in the late eighties in Britain. People were getting foreclosed on and put on the street. Whereupon, social security kicked in and the state had to find accommodation for them in hotels and bed and breakfast establishments. The sick thing about that is that it would have been far, far cheaper for the state to pay the mortgage payments and let them stay in their own home.
I heard on the news that they are looking at the possibility of allowing people to rent their homes from the banks until such time as they can afford the mortgage payments again as an alternative to kicking them out.

Actually it makes good business sense. If you can't get the whole loaf of bread settle for half. Foreclosure puts real estate on the books as an uncollectable. It also kils the county tax base

[flippedgazelle]

Actually it makes good business sense. If you can't get the whole loaf of bread settle for half. Foreclosure puts real estate on the books as an uncollectable. It also kils the county tax base

I think the problem is that it sets a dangerous precedent for the mortgage industry: there is an "out" for an unpleasant mortgage. People would abuse it. Too bad, because like you said, this would be sort of a win-win for everyone involved.

I worked in IT for 2 mortgage companies during 1994-2000, and the amount of shenanigans used to develop loan programs and get loans approved was pathetic. I'm so glad I was able to pay cash for my tiny homestead.

I think the problem is that it sets a dangerous precedent for the mortgage industry: there is an "out" for an unpleasant mortgage. People would abuse it. Too bad, because like you said, this would be sort of a win-win for everyone involved.

I worked in IT for 2 mortgage companies during 1994-2000, and the amount of shenanigans used to develop loan programs and get loans approved was pathetic. I'm so glad I was able to pay cash for my tiny homestead.

Yes it would. The precedent that they actually have a little compassion. And half a brain.( at the banks, not you.)

The mortgage industry abused it to start with. They got people in homes they could never afford. On the other hand people need some personal responsibility. A sane person knows how much they can afford. My litmus test, as simple as it is, if I have to jump through too many hoops, it's wrong.

Funny, that was before Bush was in office. Hmmmm wonder who was there.

[flippedgazelle]

Yes it would. The precedent that they actually have a little compassion. And half a brain.( at the banks, not you.)

The mortgage industry abused it to start with. They got people in homes they could never afford. On the other hand people need some personal responsibility. A sane person knows how much they can afford. My litmus test, as simple as it is, if I have to jump through too many hoops, it's wrong.

Funny, that was before Bush was in office. Hmmmm wonder who was there.

People would purposely permit foreclosure, and the attempt a renegotiation.

The mortgage industry was getting more aggressive thru the Reagan Admin, Bush I, Clinton... didn't really matter who was prez at that point. There is no point to a Rep v Dem argument here; plenty of guilty to go around, and as you said, "people need some personal responsibility. A sane person knows how much they can afford."

People would purposely permit foreclosure, and the attempt a renegotiation.

The mortgage industry was getting more aggressive thru the Reagan Admin, Bush I, Clinton... didn't really matter who was prez at that point. There is no point to a Rep v Dem argument here; plenty of guilty to go around, and as you said, "people need some personal responsibility. A sane person knows how much they can afford."

Well when I bought my first house I had to have 20% down, and an excellent beacon score. The regs were a lot tighter back in 86. The end of 99 I could have gotten a 120% L to V mortgage. I knew there was no way I could pay that back so I didn't do it. As for the foreclosure, put regulations/restrictions on it. I can work if done right.

Do it so it's a reprieve instead of a reduction of principal. All money would have to be repaid maybe extend the term. Something. Our illustrious leader can figure it out.

Well when I bought my first house I had to have 20% down, and an excellent beacon score. The regs were a lot tighter back in 86. The end of 99 I could have gotten a 120% L to V mortgage. I knew there was no way I could pay that back so I didn't do it. As for the foreclosure, put regulations/restrictions on it. I can work if done right.

Do it so it's a reprieve instead of a reduction of principal. All money would have to be repaid maybe extend the term. Something. Our illustrious leader can figure it out.

But in the meantime, that would mean giving your money to these people.
Are you contradicting yourself or becoming more moderate?

[little laker]

I really don't know if this is what's happening in the US, however here in Canada I've seen several people buying houses with the full intent of flipping them a year or 2 later. And hopefully making a couple hundred thousand while they were doing it.

However with the housing crunch some of those houses are now worth $100,000 less than they were a year ago, and that's just in my area. It might be more drastic elsewhere.

Since Canadian banks are still regulated most people aren't in the same boat as you folks in the US, however if they weren't regulated I imagine that it some of these people would have bitten off more than they can chew.

Personally I can't picture anyone buying something as major as a house without the intent of paying off the mortgage sometime and somehow.

I really don't know if this is what's happening in the US, however here in Canada I've seen several people buying houses with the full intent of flipping them a year or 2 later. And hopefully making a couple hundred thousand while they were doing it.

However with the housing crunch some of those houses are now worth $100,000 less than they were a year ago, and that's just in my area. It might be more drastic elsewhere.

Since Canadian banks are still regulated most people aren't in the same boat as you folks in the US, however if they weren't regulated I imagine that it some of these people would have bitten off more than they can chew.

Personally I can't picture anyone buying something as major as a house without the intent of paying off the mortgage sometime and somehow.

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.
We're always telling people "If it seems too good to be true, it's a scam", when they ask about the likes of Broadway Photos pricing. Why weren't people saying that or thinking that when they were signing up for these ridiculous mortgages?

[little laker]

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.
We're always telling people "If it seems too good to be true, it's a scam", when they ask about the likes of Broadway Photos pricing. Why weren't people saying that or thinking that when they were signing up for these ridiculous mortgages?

This is just a thought out loud, however one way to curb peoples greed and stop them from buying a house only to flip it a year or 2 later is to introduce larger "Capital Gains" taxes.
Taking away most, if not all their profit unless they either live in the house for a reasonable amount of time, or do something to increase the value.

However, In my opinion the tax agency would have to look at every case individually. Since some people are stuck selling because of a work related move, or retirement, etc.

But in the meantime, that would mean giving your money to these people.
Are you contradicting yourself or becoming more moderate?

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.