If there is anyone dumber than a banker
 

. . . I don't know who that could be. First off it was the bankers who wrote the crappy sub prime mortgages.

It seems to be hoped that the home building sector will dig us out of this recession. Frex, every home sale brings on sales in other sectors, appliances, furniture, etc. So you would think that our brilliant bankers would want the home building sector to expand. But no, they are flooding the market with foreclosures.

Now the home owner would like to keep his/her home but their mortgage is underwater and their job is at risk. So the bank will re-negotiate, right? Not bloody likely, they will foreclose and sell the house well below market value. Why? Because all those genius brokers are telling the nation -"We have not hit bottom yet". So who is going to buy a $250,000 home that may only be worth $200,000 six months from now. The bank will be lucky to dump it for $185,000. However had they re-negotiated with the owner they would have had a $250,00 mortgage and payments coming in.

Frankly it is a totally dumb-ass mortgage system in any case, but these brilliant bankers sure are not helping.

BTW ours just increased $9,000 in the last two months.:p

this is exactly correct

the banks are playing hard ball and in so doing hurting the home owner, themselves and the country

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

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.

Is anyone dumber than a banker?

A politician.

A voter?

Yep. Crazy times. The homes in my hood are your basic "starter homes". Well, at least what we thought of as starter homes thirty years ago. They used to sell quick, put one up for sale and it's sold in a week. But, now? There's one three doors down that's been vacant for almost three years. Twice, the police have chased squatters out of it, and caught a group of teenagers partying in it once. Actually, there's several of these places in the 'hood.

Dave

Nobody can find the exact bottom or top of market. Not even trained monkeys. So Merrylander -- since MOST people don't buy homes for 6 months or a year at a time, then sell --- it's NOT stupid to buy when you're ready and the deal is good. EVEN IF, you know you'll watch it slide downwards for awhile.. Buy quality and location, (best you can afford) -- then don't watch it slide. Enjoy it..

If I believed everything the mortgagers and real estate people told me, I'd be stuck with a doggy house in broke-ass California instead of living in HillBilly Beverly Hills..

This must be financial night. Gold in one thread. Real Estate in another. We need a foreign currency thread..

The brilliant bankers are not flooding the market with foreclosures. Folks who got into mortgages that were way north of their ability to pay them flooded the market with foreclosures.

Glad to hear your housing market is showing signs of life though. Here in Detroit, the market has totally flat-lined.

Some years ago I read a book called, "....and the wolf finally came." about the decline of the U.S. steel industry. In it the author asked a former top executive from U.S. Steel if he blamed the unions for the collapse. His brief response was; "On every contract, there are two signatories................"

I tend to believe this applies here too. Back in the late '90s-early '00s I flipped a couple homes. I recall real estate agents pushing me hard to buy homes that were waaaaaaay over my budget and mortgage officers claiming they could "make it work" with "creative financing".

To lay the mortgage crisis solely at the feet of the borrower is not entirely correct, IMO. The professionals should have known better. But, in those days they were after the quick buck, future be damned, and that was obvious. Heck, I'll even admit that that was MY mindset, at the time.:rolleyes:

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?:rolleyes:

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.

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

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

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.

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.

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.

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