Posted on 10/06/2008 8:10:26 PM PDT by NormsRevenge
A massive $8.4 billion homeowner rescue plan announced Monday by the Bank of America will provide some relief for an estimated 125,000 Californians who are having trouble making payments on sub-prime loans and other risky mortgages from Countrywide Home Loans.
Bank of America bought Countrywide for $4 billion July 1 after the Calabasas-based home loan giant, among the largest sub-prime lenders in the state, collapsed under the weight of mounting defaults and foreclosures.
The bank's "Home Ownership Retention Program for Countrywide Customers'' was devised by California and 10 other states to settle predatory lending lawsuits filed against Countrywide. The plan could also set a precedent for other banks whose books are weighed down by defaulting mortgages.
"This is going to help some families,'' said California Attorney General Jerry Brown, "but the overall economy is in hands of God at this point.'' Brown helped lead the settlement negotiations.
The program allocates up to $3.5 billion to help California Countrywide borrowers lower their interest rates, a figure that assumes every borrower participates. Nearly 400,000 customers of Countrywide will be eligible nationwide.
The bank said the program is for borrowers who are, or who are likely to fall seriously behind on their loans as the result of loan features such as interest rate resets or payment changes. For some borrowers, interest rates could go as low as 2.5 percent. The program includes suspension of foreclosures, reduced interest payments and for select borrowers, reduction of principal balances.
(Excerpt) Read more at mercurynews.com ...
I don’t remember the quote, but you are right, it fits.
As to the possability of such a thing I sure think it would be possible in a class action lawsuit. Responsible Class vs Irresponsible Class:) That was a joke, but pretty much the meat of the thing just the same.
This is a blatant case of...I don’t know what to call it. Class welfare, class warfare, redistribution of wealth, theft. All I know is that it is totally disgusting and makes me so unbelieveably mad I cannot stand myself!
Considering the outrage over the bailout bill and the fact that this was part of that outrage I suspect there would be a whole lot of people on board.
You know what? Not only does this thing make us pay the bill for this whole bailout thing, and let the ones that were stupid have their mistakes revoked, it also gives them an advantage going forward.
Is that how Biden got a 7,000 square foot house on a lake for $300,000?
Sorry, Billmor, I can’t muster any sympathy for borrowers who didn’t understand the basics about a negative amortization mortgage. When I bought my first house in 1978, I chose an adjustable rate mortgage (yes, in 1978!). I researched ARMs, discovered how they worked and educated myself about the various indices they were tied to. I chose an ARM that was reset semiannually and linked to the 11th District Cost of Funds Index which moved very slowly.
Maybe I was unique in that I wanted to learn about the risks of the mortgage I was getting and how to minimize that risk. But individuals signed these instruments and had a fiduciary responsibility to themselves to understand what they were getting into.
It is plainly unethical and immoral for the rest of us to bail out somebody else’s financial stupidity and naivete when we have worked so hard to live responsibly and within our means.
Fewer people are going to want to want to take out a mortgage that they can afford if it appears that they will get bailed out if they take out a loan that they cannot afford.
interesting, this USED to be available under the old bankruptcy code.
The LENDERS lobbyied for reforms. In many situations WROTE THE NEW bankruptcy laws adopted by the congress.
now they are doing this so the law does not get changed back.
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