Posted on 11/16/2010 6:33:17 AM PST by WebFocus
Nearly 90 percent of home owners have stayed current on their mortgages throughout the housing meltdown. Yet, in what should be his final act as chairman of the Senate Banking Committee, Chris Dodd is holding hearings today about how the 10 percent of homeowners who are either seriously delinquent or in default on their loans are being screwed by the banking system.
The hearing, of course, won't dwell on the mistakes of the vast majority of alleged victims of this scandal -- namely, how they rolled the dice on the housing bubble, taking out loans they knew they couldn't afford.
Its title -- "Problems in Mortgage Servicing From Modification to Foreclosure" -- tells you all you need to know about the goal: to stoke anger at the big banks by portraying all those who've been forced from their homes in the last two years as innocent victims, seduced into taking out unaffordable loans and now victimized by the same banks and their teams of "robo-signers," who denied them "due process" by rubber-stamping foreclosure documents without proper review.
Dodd, of course, should have a special insight into the seamy side of the housing bubble and its ultimate meltdown. He got VIP treatment from one of the bubble's biggest instigators -- former Countrywide CEO Angelo Mozilo, whose business model centered on lending money to subprime borrowers. When it wasn't handing out subprime loans to risky borrowers (loans that were then guaranteed or bought by Fannie Mae and Freddie Mac, thus contributing to their demise), it was helping "influentials" like Dodd gain access to low-cost loans through its "Friends of Angelo" program.
Don't expect to hear much today about Friends of Angelo, or whether Fannie Mae and Freddie Mac stoked the housing bubble by enabling Countrywide to lend to anyone with a heartbeat.
(Excerpt) Read more at nypost.com ...
John Adams once said in court, “Facts are stubborn things.”
If you can’t afford a house, you shouldn’t buy one.
Simple as that.
Apparently, there are a lot of people in America who cannot count.
Good on Charley.
How 'bout not showing us the victims? I don't care about any victims of anything. I'm so tired of hearing about this victim or that victim. F'em all.
ML/NJ
The other problem is that the bank has a fiduciary responsibility to the shareholders and depositors to NOT give loans to folks who can't pay it back. That is fraud, and it's been done on a scale that long ago should have had 'banker X charged under RICO' on every daily headline for the last couple of years.
Fraud on homeowner by way of insurance switch: Now It's Kickbacks Too (Force-Placed Insurance)
Fraud on homeowner by way of faked loan workouts: Heh, Look - It's Lootie The Bankster!
and: Gee The FRAUD In HAMP Is Coming Out?
fraud during the mortgage setup: Oh, It's Those E-Vile Borrowers! Oh Wait... It's Not?
Sure, there were some who took on more risk than they should. But that doesn't give the bank the right to screw them over again as they try to work it out. Nor does it excuse the bank from having lied to some at the start, nor does it excuse the bank from having sold the mortgage to more than one MBS setup.
Blaming the folks who bet wrong is a red-herring to cover up for the unbelievably huge fraud going on here.
http://www.businessinsider.com/michael-hudson-the-monster-2010-10
From what I can tell the banks were giving out loans they HOPED people would not be able to pay.
They were counting on housing prices rising and rising. Then if they could forclose a year or two later, they could the house for 20% profit, pocket the down payment and the payments made.
They thought they held all the cards, and broke the law by making these loans. What they din’t count on was crashing the market.
Well right now any adjustable rate loans that I see resetting, are dropping in rate quite a bit, so no go on that being a problem.
The victims will be the clueless homeowners who try to sell their homes only to find out their mortgage was securitized, the note was destroyed or lost, and title was clouded. When the prospective buyer is denied title insurance because former owner’s note can’t be found, then you, the clueless seller, might feel somewhat victimized as your home’s value has become obliterated.
If prices kept on rising, the owner could sell for a profit and pay off the loan! Ergo, no foreclosure.
pocket the down payment and the payments made.
The bank doesn't get the downpayment. The downpayment goes to the home seller.
You mean they were too stupid to read the contract before signing it? Lucky for them as interest rates have fallen. They got the lower rate to start with and now reset with an even lower rate! Yes, facts are stubborn things.
I stand corrected on the down payment.
Loan origination fees would have remained in the banks hands. I relised this error, but could not go back and edit.
My point is that in a rising market, forclosure was not a threat but a boon to the banks. It would have allowed more fees and profits, so they had no reason to follow the laws, and every reason not to.
If you cannot figure out what kind of mortgage you are applying for, you need to go back to school and learn how to count.
That goes for bankers as well. They won’t be forgotten.
Most of the loan origination fees would be paid out to the people processing the loans. Only a small part 'remains in the hands of the banks'.
My point is that in a rising market, forclosure was not a threat but a boon to the banks.
In a rising market, the home owner can sell for a profit and never go into foreclosure. There is no 'foreclosure boon' to the banks in a rising market.
I had a house that I could afford ...
... then my wife and I lost our jobs within 2 weeks of each other.
After almost a year of being unemployed, I got a job, and tried to negotiate with the bank ...
... they forced me into bankruptcy
After bankruptcy, I hired a lawyer to try to negotiate with the bank again to save the house ...
... they still refused to negotiate ...
... and the lawyer I hired was raided by the FBI because they were a scam.
Now, I find myself debt free and gainfully employed, but looked upon by some as a pariah because supposedly I did something wrong. I did not over-buy based on my then income. I did not try to walk away from my mortgage ... in fact, I went to the bank before I missed my first payment and tried to work with them. I did not intend to walk away from my debts ... but again, raising my interest rates to 31% and refusing to negotiate left me no choice. I did not want my house to go into foreclosure, but when told that I had to write the bank a check for $180,000 before they would negotiate with me ... I walked.
When it comes to personal finance and marriage, you never know what goes on behind closed doors.
Sounds like these two enjoyed spending money. Perhaps money they did not have?
Nice liberal take... Ever hear of the 1977 CRA? ACORN?? The banks played the hand they were dealt. You ought to check it out lefty.
Have a nice day!
Tsk, tsk. All that financial know how and no manners.
The fraud on the part of the banks is far deeper than you understand.
One of the tricks used was to have a fixed rate explained on the first few pages of the mortgage doc, but deep in the pile of papers was a bit saying it was an adjustable loan, all nicely in done up in impenetrable lawyer-ese. After the signing, the bank ripped off and discarded the top pages. Another trick that seems to have happened is to just discard the original docs and show up at the foreclosure hearing with new paper and robo-signed affadavits saying it matched the first set.
I think it was market-ticker.org that had the reference to the Ameriquest fraud, but I can't find it at the moment.
The larger fraud, by far, is on the part of the bankers. That the government was part and parcel of this fraud via the CRA doesn't let the banks off the hook.
I just find it funny that out-and-out fraud by the banks (and the govt) gets a pass on this forum by folks who want to lay primary blame on the merely gullible.
That can be hard to do when the bank lies to you about it up front with deceptive paperwork, or switches the paperwork after the fact.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.