Obama, The Quiet Storm

[Assasin]

"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.
__________________"


That is what I am saying and I think Obama have to take a hard look on it and realise that the banks are in for pure profits and make some policies. The thing is more people get better it will make the industry somewhat better as they will borrow again(I am talking about recession hit clients). Everything you said in your last paragraph is true.

[Karl]

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.

...a suh mi seit too sah!
Tek yuh!

btw - I know you know that President Obama has now introduced another weapon - Refinance (offer lower payments - in line with current rates of lending...approximately 4%) whereby Cerdit Scores and Income are not scored as long as the mortgage payments are current. --- soooooo...No Income, No Credit needed and a refinance/a modification of the mortgage can be had! === Lower payments! ...many more can now afford to remain in their homes.

The truth is empty homes do not generate the level of contribution to the economy as do occupied homes.

A saying I sometimes use - A house is like a baby.
Needs constant 'mothering' (& fathering' )/care = money has to be constantly spent on care/upkeep.