It is obviously less expensive to have the borrowers continue to service the loan even at a slight loss to the mortgage holder than it is to foreclose and take control of a property that is worth significantly less than they loaned against it.
At a minimum the “reset” dates should be spread out over as much time as possible so they don’t all come due over a short period. With some time house prices will start to recover. The financial situation of the borrowers may be improved in a few years as well.
I think this makes more sense than “bailing” them all out. This might allow more people a chance to keep their homes and HOPEFULLY learn a valuable lesson in all this. I am one person that allows people error in judgement if the lesson is learned. I think alot of people were either ignorant or stupid when signing up for these programs. Hopefully now when they purchase a home at another time they will think before they act. Plus, as a bonus, the experience of seeing their neigbors and friends going through this may teach others who were thinking about buying a home to learn what is best for them.
I couldn’t care less if the banks choose to let any or all of their customers off the hook. But what does the Treasury Department have to do with this? I sincerely hope that they’re not planning to use my tax dollars to subsidize any of this.
Rewarding irresponsible behavior will NOT go over well with the rest of Americans.
The American work ethic is a precious and rare commodity.
How do we explain this to our kids when we exhort them to work hard ?
Why do they need an agreement to do this? Why do they need the government to be involved in this? If freezing subprime rates helps keep these people out of foreclosure, then why don’t the mortgage companies just do it without waiting for government to act?
My answer: The leaders of the mortgage companies are so used to relying on government to provide the solution to all their problems that they can’t deal with the concept of individual responsibility. They can’t think for themselves.
And that works well, because the government is anxious to take credit for everything that happens that is good anyway, so they of course want it to appear that this was their idea.
I don’t know about this. Where does it stop? Suppose we have a recession and ramped up unemployment. Do we then get the banks to declare a moratorium on loan payments for some individuals?
Sorry, people need to be made to understand their actions have consequences.
I'd be willing to bet that in at least some parts of the country the increase in property taxes has far exceeded that of interest increases.
What a croc, those people should be put out on the street.
Yhey should never have been alowed to have the home in the first place and the banks should eat it big time for allowing them to have them.
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!
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.
Oh goodie! The government is going to wave its magic wand and make everything better!
One man’s compassionate help is another man’s Speculator Relief Bill
Excerpt:
Two years ago, Kelley Lowry camped out overnight to buy a four-bedroom home in the upscale community of Fairfield, Calif., northeast of San Francisco. He paid $580,000."We bought at the top of the market," Lowry said.
Just six weeks later, his house was worth $750,000 -- but now? The value has plunged to just about $400,000.
"It's pretty devastating, especially when you owe more than that," Lowry said. "It's tough to swallow."
Fairfield is emblematic of suburbs across the country where home prices took off in the past few years in a booming housing market.
Just like I said a few months ago. Prices were down about 25% + all over California from the highs of 2005.
Now the truth is slowly leaking out. You do the math yourself. $ 780,000 less $ 400,000 means a net loss of (____________ )? OMG ! In just two years. And prices are still falling . . .
The meeting was chaired by Santa Claus.
"If we all close our eyes and wish real hard, all this bad debt will just go away" said coalition member Easter Bunny.