PatColo
23rd June 2011, 09:58 PM
This is the OP to a discussion thread @ patrick.net (http://patrick.net) forum - you'll want to check it out there for the replies. The forum members there have the common hobby of following the housing crash- beyond that they vary as far as their awareness of the fractional-reserve fiat/Global Usury Empire (http://gold-silver.us/forum/showthread.php?23047-The-Zionist-Elephant-In-The-Room) uber-racket; so this diversity is reflected in their replies. For the most part I suspect they would dismiss my speculation that ending the institution of private property is TPTB's endgame (http://gold-silver.us/forum/showthread.php?27547-CBS-60-Minutes-Mortgages-Walking-Away), as being "conspiracy nutjob rantings".
which entity loses money when I foreclose on my house? (http://patrick.net/forum/?p=843902)
By twd000 (http://patrick.net/forum/?author=17446) Wed, 22 Jun 2011, 8:57pm 512 views 23 comments (http://patrick.net/forum/?p=843902#comments) http://patrick.net/forum/wp-content/themes/default/closedeye.png Watch (http://patrick.net/forum/?p=843902&want_email=1) Quote (http://patrick.net/forum/?p=843902#commentform) Email Link (http://patrick.net/forum/?p=843902)
I am trying to figure out why banks are not more willing to do serious loan modifications for homeowners who are strategically defaulting.
I understand all the previous govt interventions have been failures, in that they focus on people who are way overextended on credit, or have recent economic hardship, etc. So the few modifications that were done just delayed the inevitable, the people never had a realistic probability of paying the mortgage, and the money was wasted.
But none of the programs have focused on people who are the most underwater, the group I think is most likely to strategically default.
I bought a very modest ($200k) affordable house in 2007. I can still make the payments comfortably, but the house value is down something like 40% from what I paid. We are looking to move in the next couple years anyway, so just for kicks I went down to Chase and applied for another mortgage. They approved me for another loan roughly equal to my current loan, at 4.5%, FHA-backed, only 3.5% downpayment required.
So to me, this is a no-brainer. Wait till there is some significant stabilization in the local market, then jump ship. Get the new mortgage written, then call up Bank #1 and see if they’re “willing to talk”. I fully expect them to extend and pretend and eventually foreclose on the place, taking something like a 20-30% hit in the process.
A couple homes down the street have gone for $76k and $99k after foreclosures. The banks know that they will have to pay HOA fees, property taxes and insurance, and eventually accept a below-market value for my house if they foreclose. It is obvious to me that the banks don’t want to be in the home-ownership business. Why aren’t they willing to write down principal to near-market value for people threatening to default?
My loan was sold twice after securitizing and mergers, so I’m not really sure who takes the haircut when I bail out? Are the MBS held in bond funds that lose value when I default? Does BofA have to take the full brunt of the loss? Does the government take some part of the loss (mine is not an FHA loan)?
Please try to refrain on commenting of the morality of strategic default; I’m not interested in what you think of me personally and I promise not to tell you what I think of you! Just trying to figure out where the buck stops and why banks are slow-playing the default crisis instead of writing down principal.
see replies (evolving) @ http://patrick.net/forum/?p=843902
which entity loses money when I foreclose on my house? (http://patrick.net/forum/?p=843902)
By twd000 (http://patrick.net/forum/?author=17446) Wed, 22 Jun 2011, 8:57pm 512 views 23 comments (http://patrick.net/forum/?p=843902#comments) http://patrick.net/forum/wp-content/themes/default/closedeye.png Watch (http://patrick.net/forum/?p=843902&want_email=1) Quote (http://patrick.net/forum/?p=843902#commentform) Email Link (http://patrick.net/forum/?p=843902)
I am trying to figure out why banks are not more willing to do serious loan modifications for homeowners who are strategically defaulting.
I understand all the previous govt interventions have been failures, in that they focus on people who are way overextended on credit, or have recent economic hardship, etc. So the few modifications that were done just delayed the inevitable, the people never had a realistic probability of paying the mortgage, and the money was wasted.
But none of the programs have focused on people who are the most underwater, the group I think is most likely to strategically default.
I bought a very modest ($200k) affordable house in 2007. I can still make the payments comfortably, but the house value is down something like 40% from what I paid. We are looking to move in the next couple years anyway, so just for kicks I went down to Chase and applied for another mortgage. They approved me for another loan roughly equal to my current loan, at 4.5%, FHA-backed, only 3.5% downpayment required.
So to me, this is a no-brainer. Wait till there is some significant stabilization in the local market, then jump ship. Get the new mortgage written, then call up Bank #1 and see if they’re “willing to talk”. I fully expect them to extend and pretend and eventually foreclose on the place, taking something like a 20-30% hit in the process.
A couple homes down the street have gone for $76k and $99k after foreclosures. The banks know that they will have to pay HOA fees, property taxes and insurance, and eventually accept a below-market value for my house if they foreclose. It is obvious to me that the banks don’t want to be in the home-ownership business. Why aren’t they willing to write down principal to near-market value for people threatening to default?
My loan was sold twice after securitizing and mergers, so I’m not really sure who takes the haircut when I bail out? Are the MBS held in bond funds that lose value when I default? Does BofA have to take the full brunt of the loss? Does the government take some part of the loss (mine is not an FHA loan)?
Please try to refrain on commenting of the morality of strategic default; I’m not interested in what you think of me personally and I promise not to tell you what I think of you! Just trying to figure out where the buck stops and why banks are slow-playing the default crisis instead of writing down principal.
see replies (evolving) @ http://patrick.net/forum/?p=843902