Posted by Mark (SDCA) on March 10, 2008 at 12:56:40:
I dont think it’s anywhere near that simple anymore.
More and more people are looking at foreclosure/deed in lieu as a business decision ie the house is worth less than I owe, so I mail in the keys.
In this scenario ONLY debt forgiveness- MAYBE- will prevent foreclosure.
Mark
Bernanke Urges Banks to Forgive Portion of Mtgs - Posted by JT-IN
Posted by JT-IN on March 05, 2008 at 07:07:47:
This article is amazing to me… I think it comfirms just how severe the problem is in the banking cauldrun when the fed chair is suggesting in mass that the industry essentially write down principle owed to them to stave off further foreclosures. Of course the industry isn’t about to react if they have another solution, but the fact that some seem to be accepting of the idea hints at the underlying ticking time-bomb.
http://www.bloomberg.com/apps/news?pid=20601010&sid=afk9xW8jmF5I&refer=news
JT-IN
Re: Bernanke Urges… - Posted by Nimesh
Posted by Nimesh on March 07, 2008 at 09:25:37:
Sooner or later the federal government will step in and buy up all of the worthless mortgages and then monetize the debt via the Federal Reserve and thus the dollar will go down even further.
What needs to be done is to allow the free market to value the properties. I live in Chicago and properties went from 225K to 299K in 2000 to 599K to 1M by 2005. If that isn’t a real estate bubble then I don’t know what is! People, banks, mortgage holders, etc… all need to be HELD RESPONSIBLE. They made a decision and it didn’t work out. If things did work out, then would they all share the profits with the government? Of course not.
It is sad, but I believe that our nation is marching towards socialism. Call your congressman and senator and let them know loud and clear that you don’t want the government to use tax dollars to bail out people who bought a 1800 square foot condo for 750K. If this keeps up, then pretty soon the government will pay off people’s credit card bills too.
One would hope… - Posted by Rich-CA
Posted by Rich-CA on March 05, 2008 at 20:37:52:
…that they analyze what is causing their problem and freeze that. For example, if the ARM adjustment plus resultant late fees is what puts the homeowner over the edge, it would make more sense to freeze the interest rate at the lower level and forgive the late fees. Or go to a 40 year instead. Smaller write down and no complete loss the way you get when the bank ends up owning the property.
Banks to Forgive Portion of Mtgs - Posted by michaela-CA
Posted by michaela-CA on March 05, 2008 at 09:58:38:
Interesting article. I just don’t believe that the mortgage companies would actually do it. They may vote for it and on the outside agree, but when it comes down to biting the bullet, I expect them to always come up with a reason why not to do it on each house.
Just like the short sale scenario. A lot of those are handled by people that just do their job. It’s not their money and if they had a disagreement with someone at home that morning then the next person calling them will get the brunt of it potentially.
They would agree with Barnanke and then hope that their competitors will do it, while they hold on.
Just my thoughts
Michaela