If there is anyone dumber than a banker

[merrylander]

Originally Posted by BlueStreak

But..............the price of a home was artificially inflated before the crash and still is.
They are not selling because mortgage qualification standards have been tightened (I am told by a friend in the real estate biz.), and few can afford them under todays conditions. This, coupled with the unemployment situation, is why sales are so sluggish.

So, what to do? Liberalize qualification standards again? That's what led to this mess in the first place.

As I see it, homes will not begin to sell again until prices come in line with the ability of potential homeowners to pay under more strict terms that reasonably assure repayment.

Dave

The problem is that the bankers absolutely refuse to lower the mortgages to the actual value of the house. So they foreclose (with all the attendant expenses) and end up selling the house at a big loss. Do they expect to make a profit on volume?

[merrylander]

People got into these mortgages for exactly the reasons Dave noted, the mortgage brokers and bankers convinced them that when the ARM came due the propery would have so risen in value that they could simply remortgage into a 30 year fixed.

What is so hard about admitting the we have possibly the world's must f**ked up mortgage system? I still maintain that it was designed by thieves foir thieves. Just so damn glad we are out from under.

[noonereal]

Originally Posted by HatchetJack

They might be half way through forclosing if things don't get any worse.
Man there are houses everywhere with no one living in them, grass all grown
up around them. I wonder if the banks have even found them all yet? not
to mention all the vacation spots people walked away from.
I know one guy got forclosed on but just keeps living there making no payments
for over a year now and no one has showed up.

not here in NY

the bank is required to cut the lawn and keep up the property after they throw the former owners into the street in front of it

[noonereal]

Originally Posted by merrylander

People got into these mortgages for exactly the reasons Dave noted, the mortgage brokers and bankers convinced them that when the ARM came due the propery would have so risen in value that they could simply remortgage into a 30 year fixed.
.

not only that, they falsified the income, work history, anything they needed to to qualify the applicant, most times without the applicant even knowing

this was done with the banks being aware but closing their eyes to it


not one is in jail though

[noonereal]

Originally Posted by merrylander

The problem is that the bankers absolutely refuse to lower the mortgages to the actual value of the house. So they foreclose (with all the attendant expenses) and end up selling the house at a big loss. Do they expect to make a profit on volume?

Although I had a standard 15 year mortgage with 20% down when I became ill the bank would do nothing. Nothing.

They foreclosed rather than take a reduced payment. Now, two years later the house is still empty (not even on the market) in disrepair which it was not, they have to maintain the outside and pay the tax and incurred all the foreclosure costs which I understand is tens of thousands of dollars here in NY.

All in all they are out at least $100,000-$150,000 instead of breaking even for 5 years or so.

and BTW all that crap Obie passed to compel the banks to work with the home owner only increased the costs to the banks without compelling them to make any decisions that helped the homeowner.
For example, they were required to have a sit down with the home owner at the home owners request but did not have to negotiate in good faith. So they would send minimum wage representatives to the meeting with no power to negotiate. As long as someone showed up, they were in compliance and the foreclosure could proceed.

[JonL]

I don't know why the solution to many of the mortgage problems wasn't to simply extend the term of the loan by some ridiculous amount. Take a 30 year mortgage and make it a 50 or 60 year mortgage. The payment goes down to something the owner (perhaps "resident" is a better word) can afford, the resident gets to stay in the house, the bank still gets regular payments, still gets interest, doesn't write off the loan, doesn't have the costs and losses of a foreclosure, there's not a glut of homes on the market, values stay reasonably stable, the resident still has a shot at building equity and might be able to pay the loan off sooner if their income increases... Seems simple to me.

[merrylander]

Some of this is because of the backlash from people who say "We paid our mortgage so why should these people get a break". The answer to that for any sensible person is because haveing a bunch of foreclosed empty homes in your area will drive down the value of your home.

Yo stupido, why do you think I climb on a tractor once a week to cut grass? I may not be moving anytime soon, but suppose my nneighbour gets transferred and has to sell? Our well maintained and attractive property sure is not going to hamper his sale.

[piece-itpete]

Originally Posted by JonL

I don't know why the solution to many of the mortgage problems wasn't to simply extend the term of the loan by some ridiculous amount. Take a 30 year mortgage and make it a 50 or 60 year mortgage. The payment goes down to something the owner (perhaps "resident" is a better word) can afford, the resident gets to stay in the house, the bank still gets regular payments, still gets interest, doesn't write off the loan, doesn't have the costs and losses of a foreclosure, there's not a glut of homes on the market, values stay reasonably stable, the resident still has a shot at building equity and might be able to pay the loan off sooner if their income increases... Seems simple to me.

Sorry Jon, way to easy. Lol. Or :cry:

Rob, will you move in next door? My neighbors' been remiss in upkeep. I think the neighborhood 'association' will have to deal with him :club:

Pete