Obama, The Quiet Storm

[Karl]

That is not the case. They needed to help the banks but the banks conned them. They gave nothing to the borrowerers in return.

Just yesterday I heard of a case of some senior citizens who had their home for 26 years and owe a little under 100 thousand dollars, the bank foreclosed on them when a refinance could help them and sold it for 30 grand. The people could afford a lesser payment and if they could have given them a longer period to pay or cut the amout owed to 60 grand the people could stay in.

Sass, is this a result of Obama's policy (policies)...or a result of the conduct of the banks?

Truth is Obama' policies allow for people being kept in their homes...saving those without ability to pay resonable modified payments!

The institutions are engaged in resistance to good sense at personal costs. I cannot see the logic/sense in what the banks are doing...i. e. the banks not going along with Obama and making some money as opposed to building up losses on their balance sheets

Sass: Help me to see/understand the banks' thinking?.

[Assasin]

In setting good policy the government have to anticipate the behavior of the bank. That wasn't done. The banks were desperate, and the admin had to put more check and balance in the policy. There wasn't any and the banks took advantage. They took the banks at their words.

If you notice Obama is now trying to change the policy to force the banks to do more. The fact is failure on a policy is just that and while they thought they were doing there best at the time I know looking back they are saying they could have done more, and that is a failure.

Now image if the policy he is now trying to put in place was in place for the last 3 years to force anybody who is current on their mortgage to get refinance and people who have equity.

[Karl]

In setting good policy the government have to anticipate the behavior of the bank. That wasn't done. The banks were desperate, and the admin had to put more check and balance in the policy. There wasn't any and the banks took advantage. They took the banks at their words.

If you notice Obama is now trying to change the policy to force the banks to do more. The fact is failure on a policy is just that and while they thought they were doing there best at the time I know looking back they are saying they could have done more, and that is a failure.

Now image if the policy he is now trying to put in place was in place for the last 3 years to force anybody who is current on their mortgage to get refinance and people who have equity.

...I do not think you can dictate...legally...to the banks underwriting departments.

The Obama administration put in place the parameters for the banks and the homeowners to both benefit from arresting the continued massive foreclosures. In my mind the banks by failing to take full advantage of what the administration has offered are running/acting against the interests of their shareholders - Makes no sense to me.

I love for you or anyone else to explain how foreclosing in this present climate benefits the banks?

[Assasin]

Karl the government could use judges to decide if owners stay or not and take that out of the hand of the bank as they do in England.

They could have made clauses in the loans to the banks, just as they did for the repayment etc. Most of the loans underwater are owned by Fannie and Freddie which is government owned they make the primary rules. How is it the government could influence it in the boom but can't do anything to fix it?

[Assasin]

http://latimesblogs.latimes.com/nati...g-crisis-.html

[Karl]

Karl the government could use judges to decide if owners stay or not and take that out of the hand of the bank as they do in England.

They could have made clauses in the loans to the banks, just as they did for the repayment etc. Most of the loans underwater are owned by Fannie and Freddie which is government owned they make the primary rules. How is it the government could influence it in the boom but can't do anything to fix it?

Once again - I love for you or anyone else to explain how foreclosing in this present climate benefits the banks?

[Assasin]

Karl many of them have title insurance on the property so they get back something. When some sell they get the immediate cash to re-invest. Now that there is too much on the market.

Karl most people who refinace have had the amount they owed tagged unto the amount owed. There is not a lot of difference in their payment when this is done. If they are not bennefitting, why not work something out with the homeowners who can pay but may have had a little difficulty?

Again look at places like England and you will see they don't have the foreclosure crisis we have.

[Karl]

Karl many of them have title insurance on the property so they get back something. When some sell they get the immediate cash to re-invest. Now that there is too much on the market.

Karl most people who refinace have had the amount they owed tagged unto the amount owed. There is not a lot of difference in their payment when this is done. If they are not bennefitting, why not work something out with the homeowners who can pay but may have had a little difficulty?

Again look at places like England and you will see they don't have the foreclosure crisis we have.

Oooooh...so you agree that what the banks are doing is also not understood by you?

OK! ...any other person to explain why that banks coordinated action makes sense?

[Assasin]

the only thing make sense to the banks are PROFIT. You simple don't understand how the banks are currently screwing every cent out of ordinary people.

Question do you hear about the new Foreclosure laws in 2013?

[Karl]

the only thing make sense to the banks are PROFIT. You simple don't understand how the banks are currently screwing every cent out of ordinary people.

Question do you hear about the new Foreclosure laws in 2013?

Where is the profit in foreclosing, underwriting that cost of foreclosing...then contracting and paying for maintenance of the property...and after appreciable time attempting to unload for a pitance? ...while foregoing retaining a higher than foreclosed value and thus retaining higher financial interest in the properties and collecting monthly on same. In this later even the cost of managing the loan and protection of interest in the properties is already underwritten in the cost of the loans...

Again - Please point me to the logic behind these massive foreclosures.
...and I am not being difficult. It must be I am missing something. I would love to know what it is that I have missed.

[Assasin]

It is simple Karl. If they not making some form of profit why not renegociate some of the loan? Most people with mortgage don't qualify for their so call refinancing.

How many of these banks you hear making loses????? The fact is they already get bailed out, they have PMI to collect so they have no interest in refiance and they don't, You either pay up or them a come fi it.

Don't you think if more people get to refinance mortgage people will make more money and they will be less foreclosure. The banks are simply not interested in stopping it or they would be lobbying for change. When last you hear bankers lobbying for any changes in the mortgage business? Them rather take and keep the asset for better times.

[Karl]

OK...a hear yuh...
...but mi still ignorant on the 'why?'

[Jangle]

Ok, time for me to jump in. Sass, the banks are in the business of making a profit.....like any other company. It is not profitable for them to foreclose on a mortgage. Actually, it is a big cost and financial drain on their books. The big problem however, is that most of those who got loans 4 - 5 years ago, did so without showing their real income. At that time, when sub-prime was king, all you needed was a credit score and breath in your body to get a 1/2 million dollar loan. "Stated Income" loans drove the market, which were facilitated by the banks and speculators. This was the mess that led to the collapse and what Obama inherited. When he took office, he had to do something drastic to save the big banks, which, yes, "were to big to fail", to avoid a cataclysmic collapse of the US economy while he went about implementing the guidelines and regulations to prevent a recurrence. What we are seeing now is some of these regulations being implimented and taking effect. Most of these regulations had a 2 -3 years moratorium. The problem that is facing most homeowners is that their properties are worth less than they currently owe, and many of them are just not making enough income to cover their mortgages. What you need to understand is that when you refinance or get a loan modification (which is a refinance), you still need to prove to the bank holding the mortgage that you CAN afford the new mortgage payments. Many cannot. There are many self-employed persons out there that do not file the correct amount of income on their tax returns in order to avoid paying high taxes. The same thing applies to persons who are W2 employees but also write off everything under the sun. Then they cry when they seek a refinance or a modification and the bank tells them that they cannot qualify. You cannot have it both ways. Contrary to your belief, the banks do not want these houses as they not in the business of real estate. It is a loss to the banks.

[Assasin]

Banks would prefer not to get back the houses, we all know that. If the owners are willing to stick to orginal terms which would give them over 100% profit on investment in 30 years. Since you are so sypathetic to the banks why did they give these loans, 4 or 5 years ago when they knew many couldn't afford it? Now they know they have to deal with it so they have adjusted. Bank like BOA has set up a complete division to deal with foreclosure assets. They still can go after some of the owners so not all the foreclosure is a total right off as they also get the PMI insurance on some of these houses too.

If you listen to Obama he said the policies he set didn't accomplish what the intended and he is seeking some changes to it. The banks are looking out for their interest. They recieved bailout because they are too big to fail but about 30% of homeowners who is a part of the economy than the banks who had problems with their mortgage got nothing.

The banks are crooks. If you call them and say you are having problem what they do is say ok pay half of your mortgage for six months while we try to help you. That six months turn into 1 yr. At the end of the one year they may so no and take the house or say yes and the other half of the payment for the time you didn't pay is tagged unto your prinicpal so your mortgage close to what most people were paying and they will give you a lower interest rate for a year or two but it gets higher after that.

Many of the people the banks are saying can't afford it are people who are laid off, people who who are professionals. Yes there were a few who couldn't afford it but most of the mortgages in trouble are not just from 4-5 years ago. That started it but it runs deeper. With a little time or space many could rebound.

The banks got their bailout, homeowners have no option but to turn to government for help and government have to come with some better policies. Check the UK, they have housing crisis but no foreclousure crisis, why?

[Jangle]

I am not sympathetic towards the banks. I am just arguing without getting emotionally involved. Trust me, I know many people who have gone through or is going through this foreclosure crisis. I also know many friends and acquaintances who have been without a job going on 3 years now. The banks were dishing out these toxic mortgages 4 -5 years ago because the regulations were too loose and were not being enforced, and most importantly, because they had buyers. BoA had to set up set up that foreclosure division because they bought Countrywide which the major culprit of these toxic mortgages. PMI only pays/covers up to a certain percentage of a loan, so the banks still suffer a loss when the loan goes bad. Like every law or guidelines, the regulations implemented by Obama, are subjected to change to meet the current situation. He first had to stop the slide, then deal with the banks (through regulations) on their cavalier lending policies.

The solution is that somebody HAS to absorb/take the loss on these mortgages. The system needs to be purged. The Administration along with the banks need to sit down and come up with a figure. In addition to that, ordinary people who went through the hardship and is now getting back on their feet needs to have their credit wiped clean. The credit card companies also fall into the same category as the mortgage banks.