Posted on 11/30/2007 1:38:02 AM PST by HAL9000
I want the banks and the borrows to work it out without using tax dollars or credits. If it is truly contrary to the banks self-interest to foreclose, why should we worry about them foreclosing?
We’ll see but I haven’t seen that in print so far.
It could also be that it simply took some prodding and that if the banks got together on their own they could be in violation of federal rules/laws which are likely nearly countless. I don’t know...
Because the banks packaged the debt in bundles and sold them off to other entities, such as hedge funds. The hedge funds et al in turn used them as collatarol for loans from banks. When the value of the bonds drops far enough, the holders will try to get some of their money bank by holding a fire sale that will drop real estate prices in every area where the loans were made...
A good number of these loans are Freddy Mac and Fanny Mae based. Many regulations... To alter the contractual terms of a loan made through these organizations may require government approval.
Summers argues that more is needed to keep money flowing to creditworthy home buyers, using the Federal Housing Administration, Freddie Mac (FRE), and Fannie Mae (FNM)—huge government-chartered entities that buy mortgages and package them into securities. He suggests that the government may even need to provide loans directly, or extend tax breaks to stretched families.
Though it is still thievery...
Research Freddie Mac and Fannie Mae and congressional directives from about 10 years ago... I think you’ll find the root of the problem...
I understand this didn’t just start. I would prefer to not see it continue for many decades by continuing use of government funds that keep encouraging bad business transactions by bailing them out.
I think shady lenders 5 years from now will point to bail-outs today to encourage under-informed borrowers to sign on more bad deal loans.
Larry Summers is an academic. He plays no policy role.
Well I too am totally opposed to any bail outs.
Anyone that proposes one won’t get my vote (like that matters much).
But it makes perfect sense for lenders to delay their reset dates in order to reduce the bleeding they’re currently doing. As I said before there could well be legitimate reasons for the government to be involved with making that happen. We’ll have to wait and see what the details actually are.
Freezing rates will merely reduce the availability of money to lend. Rate = risk. High risk, high rate. Prove your worthiness, lower risk, refi at a better rate. It’s not rocket science!
European = You’re a pee on.
“European = You’re a pee on.”
Can you please explain just what you mean?
My first house, built 1946, had, I believe, a 40-amp service. Four breakers total! When I sold it in 1992, the buyer insisted I either replace the breaker box or give her a $1K credit. (Sales price $133K) I gave her the $1K credit and thought I was getting a great deal.
Great deal or not, that house was worth about $590K last I checked and is probably right around $500K now.
Now I’m going to sit back and wait for the lawsuits from the million people who’ve already lost “their” homes because the rest were bailed out while they lost theirs.
If banks do this because it makes more sense than foreclosure, fine.
Not sure why the Treasury department is involved.
So will foreclosing on the properties, wouldn’t it?
Actually, not many of them are. Fannie and Freddie have a very small number of adjustable-rate loans that are not A-paper loans. Unless the A-paper loans are also included in this, then I’ll stand corrected.
It appears, from what I see here, that the Treasury is only helping in the negotation process and nothing more.
If that’s the case, I can accept that.
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