Posted on 07/12/2009 7:12:40 AM PDT by reaganaut1
Republicans should tell Geithner to back off.
On 9-11 many ordinary bankers, executives, business owners, hedge fund traders etc - became heroes when the twin towers were struck and FLT 93 was commandeered. Only when ordinary American business people stand up against being strong armed and bullied.... will it stop. We can no longer expect the corrupted GOP or anyone else to protect the US constitution, rule of law, and the viability of the capitalist system. Executives “summoned” to these meetings run by the new “Czar” class of rulers...must become the new frontline against de facto fascism.
Imagine where we might be now, if more business leaders had just said “NO” to Barney Frank, Chris Dodd, and others over the past 10 years.
The mortgage services and lenders are swamped right now. Between foreclosurers and refi’s they can’t answer the phone.
You can fix many of these loans. When somebody has a house worth half the loan and hasn’t paid for two years..you can’t fix that. Many just want to walk away.
What the Times does not understand is that these ‘homeowners’ bought their houses with no money down in order to make a profit.
If there is a loss, they want the bank to take it. Why pay for 30 years on a losing investment? They will take the ding to their credit and get out now.
The people who are really ticked off are those who have not made any mortgage payments, but the bank still won’t foreclose on their worthless house.
The recovery will start when all the excess unsustainable debt has been liquidated. Especially the federal and state and local debt that was recklessly piled on in the past 30 years.
Come up with some pretext to avoid attending the thing, or send some low level person who cannot agree to anything to take the CEO’s place, whatever it takes no way would any intelligent person walk into another trap such as happened in October.
The “re-default” rate (homeowner defaults on mortgages that were modified after the loan was initially in default) is astronomical, reaching 70% within 12 months of the modification. With the coming tsunami of defaults on option ARMs, who in their right mind would want to modified a loan?
Here in South FL - loan programs which allow a refi of up to 125% LTV still don’t cut it for people who bought at the height (2004-2006) with little or nothing down. It is an entirely rational decision for them to walk away when the house is 80% (or more) underwater. No amount of “jawboning”, whether it is from Geithner or the “Pope” himself, will change that.
vaudine
All true, however these CEO types are particularly weak willed when it comes to the Obama Admin, they should recognize that weakness in themselves and avoid a large, closed door meeting where ARM twisting can occur.
The Obamaoistas surely have a couple of these guys in their pockets, they agree to the snake oil and the rest of the CEO’s are in a bind, no one wants to hold out in the face of a Obamao “offer you can’t refuse”.
......Republicans should tell Geithner to back off. ......
They lost, he won.
Bad idea.
In some cases I do wonder why lenders aren’t modifying for those willing to stay in their houses but having trouble paying (others WANT to walk away) but that’s not something the admin needs to “force” them to do.
I do think more than anything it’s a volume thing - too much for the lenders to do at one time.
Again though, bad idea. What good is a contract if the gov’t can change it? If the lender and borrower mutually agrees to do so, that’s one thing...but this is another.
I saw that too. I guess the reason was that most of these people either had habitually bad credit, or didn’t have the income they claimed to and could never afford the house anyway.
Loan modifications might work for those who proved their income legitimately and have overall decent credit - but most of those probably don’t need a modification anyway.
Very useful article as I do real estate. Being from the NYT though, the writer just can’t help but side with the Obama administration that these modifications need a kick in the rear. I think they’ve gone to the well one time too many and will be laughed at - the banks just don’t have the man power nor monetary incentives to modify everything.
The truly ignorant should not buy homes to begin with. Delivery of the deed to the lender is considered as payment in full. There is no foreclosure and there is no bad credit report. You had a loan , you paid off the loan. End of transaction.
I refer to cases where the lender refuses to accept the deed.
There is really nothing you can do then, you’re stuck with the house.
Well, some of done so anyway. They told the borrower to take the deed and the house and stick it.
Rather naughty of them, but there you go....
The net result will be the gov will coerce the banks into giving away money. In other words, extortion.
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