Posted on 11/19/2009 2:07:09 PM PST by FromLori
The Mortgage Bankers Association released a grim report today revealing that nearly one in seven households with mortgages is behind on payments or already in foreclosure.
Last year, only one in 10 were behind. Two years ago, the number was just 7.3%.
We’re now in what is clearly the second leg downward of the mortgage mess. While the early days of the mortgage crisis were driven largely by people saddled with complex mortgages they couldn’t afford to pay, now even homeowners with relatively sane mortgages are running into trouble as unemployment soars into the double digits.
In a rising housing market, joblessness doesn’t necessarily trigger defaults. In those situations, jobless homeowners can sell their homes and pay off the mortgage. But with the home market still ailing and prices still falling in many areas, jobless homeowners are forced into short-sales and defaults.
(Excerpt) Read more at businessinsider.com ...
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The cause of derivative instability is fraud in their creation and overleverage ,, the way to flush the sepsis is to apply the laws that should have always been applied ... for instance mortgages that have been securitized (where the note and the actual mortgage deed have been seperated into seperate instruments) you need to acknowledge that the CDO holders have no enforcement ability and the mortgage is null and void as without the note it is an invalid instrument. Sure it'll hurt the cdo buyers but I don't care , they were all "sophisticated" buyers that should've known better ... if you dig into one of these things the amount of fraud , misrepresentation and plain old disregard for securities laws will appall you. That the borrowers get an unexpected windfall is ok by me too ... they didn't make the rules.
>>The Feds need to bail out all securitizeded mortgages.
securitizeded?
Securitization isn’t the problem. FRAUD is the problem.
Why should “The Feds” bail out/reward fraud?
“Securitization isn’t the problem. FRAUD is the problem....”
If the Feds can bail out Wallstreet’s derivative products built off our mortgages...they can bail out the taxpayer first.
It used to be that it was only people that had adjustable rate mortgages who were in trouble when the rates went up.
Then there were the people who bought near the top of the market and were underwater on their mortgages. They were urged to just walk away.
Now people who have lost their jobs are also losing their houses.
I remember there were people here on Free Republic that were sounding the alarms in 2004-05. They were ridiculed. If you took the advice of those that ridiculed them, you are in real trouble. This has only started. Economists like Schiff think this will take a decade to correct itself.
On the positive side, there may be some great opportunities for people, like myself, who have been sitting on the sidelines to finally trade up. With low finance rates and when the prices finally sink another 20% it may be time to think about upgrading the grand wazoo abode. If I still have a job.
>>bail out the taxpayer first.
How would you go about bailing out “the taxpayer”?
Hard to pay your mortgage after your job’s been outsourced.
I’m not in the “bailout business...however our congresscritter’s have been blithely going along throwing trillions at a mess that will never be paid off until the American job machine gets a new engine and transmission.
The root of banking problems..based in local origination fraud in communities and compounded by the fraud perpetrated on the world by our investment banksthrough the securitization of these bad loans. Simply paying all securitized morgtages off at least solves the problem in BOTH communities and Wall Street; the only reason this has’nt happened is that the Congress..elected to be the people’s representatives in DC..would rather function as Wall Street corporative representatives..and we, their employers, let it happen.
You don’t seem to have any trouble with the Oligarchs paying off the Wall Street fraud with our tax dollars...do you?
I have no reason to doubt the figures. The solution will likely be inflation, engineered by the Fed. That will bring the remaining debt on the homes back below the current market price, even though the buying power of the dollars represented by current market price will be greatly reduced for purchases of just about anything other than residential real estate. In other words you sell your home for a lot fewer loaf-of-bread equivalents than you bought it for, but but since a loaf of bread will cost twice what it did when you purchased or last refinanced the home, you’ll be getting plenty of dollars to pay off the mortgage.
>>You don’t seem to have any trouble
Don’t I?
Go look for a handout somewhere else, dirtbag.
That’s not a reply. That’s an insult. I asked why you think crooks on Wall Street should receive federal funds...and why crooks on mainstreet should’nt. You must have some GOOD reason.
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