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Banks Commence Wholesale, Unsolicited Mortgage-Debt Forgiveness
It was just a matter of time before wholesale debt-forgiveness became the primary source of wealth in the US. The time is now. The NYT reports that "big banks are going to borrowers who are not even in default and cutting their debt or easing the mortgage terms, sometimes with no questions asked. Two of the nation’s biggest lenders, JPMorgan Chase and Bank of America, are quietly modifying loans for tens of thousands of borrowers who have not asked for help but whom the banks deem to be at special risk." To be deemed in "special risk" one needs to simply have an Option ARM mortgage, and be underwater, even if still current on mortgage payments. End result: an up to 50% cut in the actual mortgage obligation. To wit: "Ms. Giosmas, who lives in Miami, was not in default on her $300,000 loan. She did not understand why she would receive this gift — although she wasted no time in taking it. Before Chase shaved $150,000 off her mortgage, Ms. Giosmas owed much more on her place than it was worth. It was a fate she shared with a quarter of all homeowners with mortgages across the nation. Being underwater, as it is called, can prevent these owners from moving and taking new jobs, and places the households at greater risk of foreclosure." Whether this is a strategic step by the banks who wish to avoid tens if not hundreds of billions in fraudclosure and putback related legal costs, charges and reserves is for now unclear, although all signs point to yes. Next up: everyone in America stops paying their mortgage, or demands a 50% haircut on existing debt, now that the example has been made. And in the meantime, banks will somehow continue to keep the mortgages, which they have now cut by up to half, at par on their books following some brand new, thoroughly senseless announcement by the FASB which says banks can mark anything to whatever price they chose in perpetuity. Because otherwise, the TBTF lenders will suddenly find themselves in a massive deficiency on their Tier 1 capital, also known as completely insolvent.
“I used to say every day, ‘Why doesn’t anyone get rewarded for doing the right thing and paying their bills on time?’ ” said Ms. Giosmas, who is an acupuncturist and real estate investor. “And I got rewarded.”
Option ARM loans like Ms. Giosmas’s gave borrowers the option of skipping the principal payment and some of the interest payment for an introductory period of several years. The unpaid balances would be added to the body of the loan.
Bank of America and Chase inherited their portfolios of option ARMs when they bought troubled lenders during the housing crash.
Chase, which declined to comment on its program, got $50 billion in option ARM loans when it bought Washington Mutual in 2008. The lender, which said last fall that it had dealt with 22,000 option ARM loans with an unpaid principal balance of $8 billion, still has $33 billion of them in its portfolio.
Bank of America acquired a portfolio of 550,000 option ARMs from its purchase of Countrywide Financial in 2008. The lender said more than 200,000 had been converted to more stable mortgages.
More details on the example that prompted the NYT article:
Ms. Giosmas bought her two-bedroom, two-bath apartment north of downtown Miami for $359,000 in early 2006, according to real estate records. She made a large down payment, but because each month she paid less than was necessary to pay off the loan, her debt swelled to about $300,000.
Meanwhile, the value of the apartment nosedived. By the time Ms. Giosmas got the letter from Chase, the condominium was worth less than half what she paid. “I would not have defaulted,” she said. “But they don’t know that.”
The letter, which Ms. Giosmas remembers as brief and “totally vague,” said Chase was cutting her principal by $150,000 while raising her interest rate to about 5 percent. Her payments would stay roughly the same.
A few months ago, Ms. Giosmas sold the place for $170,000, making a small profit. Having a loan that her lender considered toxic, she said, “turned out to be a blessing in disguise.”
And so America is now well en route to another spike in class warfare tensions, as has been the default case for the past two years between those who act in a prudent financial way, and everyone else, who are now getting bail outs from the same banks that were bailed out by those stupid enough to pay US taxes in the first place:
The banks say cutting mortgage balances would be unfair to borrowers who remain current as well as impractical because so many loans are securitized into pools owned by investors. Bank of America’s chief executive, Brian T. Moynihan, told the attorneys general in April that cutting principal for current borrowers would send the wrong message to all those who have struggled to pay their bills. His counterpart at Chase, Jamie Dimon, bluntly said it was “off the table.”
Having an option ARM loan, however, apparently qualifies the borrower for special help. The loans, with their low initial payments and “teaser” interest rates, were immediately popular with buyers who could not afford or did not want to pay the soaring prices on houses. The problem was, eventually the rate would reset or the loan balance would have to be paid in full. “Nightmare Mortgages” they were called in a 2006 BusinessWeek cover piece.
Lastly, to all those who were predicting an Option ARM housing market collapse once loans go from Adjustable rate to fixed, the banks now have an answer. And it is wholesale mortgage debt reduction.
Option ARMs were never quite as bad as predicted, partly because the crisis pushed down interest rates so far that the resets were relatively mild. Many owners did default on them, but others, like Ms. Giosmas, were quite happy to pay less for years than they would have under a conventional loan. She used option ARMs on her investment properties too.
“They saved me,” she said. “Why would I want to pay a lot more every month? I’d rather have it in my pocket.”
Not surprisingly, this will be the same rhetorical question posed next by everyone who still has a mortgage, and not only by those, roughly 28% of all, who are underwater on their mortgage. Which means that wholesale mortgage reduction for everyone in America is next on the docket. Which also means that the "rent" component of personal income is about to surge from the current $50 billion annualized to well into the triple-digits, or about 1-2% of GDP, just enough to offset recession yet again.
And that's how you create wealth in the modern, centrally-planned USSA.
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My home in Manassas Park, Va. went from $375k at its peak to $140k all within the space of 15 months which is close to a 70% drop from peak. 3 years later homes are still seesawing in between all time lows and a 10% increase from bottom during the summer season. I have not told the bank to piss up a rope and for 3 years I constantly ask myself why. Probably because I couldn't rent a place for what my mortage costs here. The bank has to know that my situation is a lost cause since Manassas Park got hit just as bad in this RE downturn as any zipcode in Florida or Las Vegas ever did. Once the section 8 and illegal alien cretins who overwhelmingly inhabit this hood start to get rowdy then I told myself that will be my queue to ditch this place but so far that hasn't happened. I figure I'm still $50k or more underwater if you factor in realtor fees and closing costs.
there was never a legal obligation described in the documents creating a mortgage in the last 10 years. The person funding is not listed. The person whose benefit the note goes to is not listed. When you get past this, you realize no claim exists, and the only party every having paid anything for the property was the homeowner. rinse, repeat x 70 million.
the story is PR for JPM in a time where they are insolvent.
your government financed it. your government owns it. like Greece however "what exactly are we negotiating over?" if you say "how to inflate the bubble" then i think you get an "A+." If you add however "the bubble cannot be reinflated" i say "you get extra credit and if traded appropriately some money off tuition next semester." again, stick with equities, stick with Cramer. I remember when he called the low in oil...WAY BACK...there was silence on the rest of the set when he did it, too. The good guys are always the last to know but rarely the last to figure it out.
I think the class warfare reference is to those who have paid their mortgages/never had one, versus those who borrowed up the ying yang to own a McMansion they could not afford. The latter are getting all the benefit while the former are being punished for being responsible. The current system rewards only those who borrowed more than they should. Of course, unpayble debt is now the fundamental basis for the world's entire economy, so no one should be surprised.
Exactly. The government just basically told everyone with a mortgage to go ahead and default.
Paying is for suckers. You get the house anyway.
You are correct! My neighbor read these articles about fewer people paying thier debts and in stead, sadlling the rest of us with their burdens so he stopped paying his doctor and hospital bill.
They called him and asked him for 50% and wrote off the rest...."wrote off the rest" meaning shifting the costs to everyone eles who pays their full bill.
Too much inventory...
Law of supply and demand still works.
Once again, by doing the right thing and getting out of my option ARM into a 30 year fixed a year ago, I am punished. I guess I get to keep being underwater on a home that the bank fraudulantly overvalued in 07.
Wait until you see what others end up paying when their ARMs explode before you cry in your beer.
I hate it when my arms explode. And indeed i will cry in my beer if that happens because i won't be able to drink it. At least not easily and not without a straw.
I get drunk, with a little help from my friends...
They won't have to pay anything, likely their contracts will be renego'd, at lower rates, and less principal.........out of fear of default.
C'mon, no one held a gun to your head and said, 'Stand and deliver, you buy this house or your life'. It generally takes two to tango.
I bet you say that to all victims of fraud.
What fraud? YOU saw what the house was 'valued' at. YOU then signed on the bottom line and bought it. But you were not forced to enter into the contract by some bankster wielding a knife. Thus, while I do vigorously hate banks, people DO need to own up to the responsibility for making a decision that was bad for them. Quit being a victim. You were not sexually raped; YOU made this bed within which you lie.
Oh, and nice profile pic.
Ever heard of disclosure laws? The banks new what was going on with MBS and derivatives. They set the whole system up for failure, and knew it. This fact was not disclosed to millions signing mortgages.
Yes, but what disclosure? You couldn 't look at the housing landscape in 2005, 06 and 07 and see things were massively overpriced? For the homebuyer, this wasn't some tranche of hand-picked-to-fail residential loans bundled into a sketchy security; it was a two bedrooom in Compton 'valued' at 500,000 grand that ten years earlier sold for 75K.
If I sell you a vehicle that I know is going to blow up an incinerate your family, that's fraud (and murder). If I then take out an insurance policy on the vehicle because I know it is going to blow up and incinerate your family, that's what the banks did with mortgages.
Collusion with appraisers to increase the value of a property (which occurred, it's on record), is fraud. Therefore any agreement signed is fraudulent. Get off your high horse.
look, everybody KNEW the housing market was in a fucking bubble.
stop acting like a clueless dipshit. People who were too stupid to recognize a housing bubble are unavoidably parted from their money. We shouldn't worry too much about them.
The rest went in with actual or constructive knowledge. Fuck the banks AND these "homeowners," nearly ALL of whom were salivating at the chance to get in on the gold rush. Now that it's blown up in their faces, they cry foul and claim "who knew?"
WTF does that make them other than just like Busch, Dimon, Bernanke?
CNBC still doesn't admit this to be true. They keep defending Alan Greenspan's inversion of the yield curve and then move directly towards green shots, er..shooters, darn it ... shoots! Green SHOUTS! Whatever. Anywho...the fact of the matter is the depression in housing lives on--and is not acknowledged by the MSM mainly i think to provide some justification for equities to move higher. (yet they move higher anyways don't they!) we have had long periods of housing price somulence however commensurate with spectacular returns in equities. and what scares me is "are rising equities acting as a trigger for a credit event as well"? in short "Xeno's right" because who doesn't get sucked into paying too much for a roof over your head when in reality what you're suppose to be doing is buying paper based on abstract concepts of "return, free cash flow and depreciation." One can be forgiven if this is far too complicated to even think about doing.
After a bubble, everyone suddenly becomes an expert and spotted it a mile away. Meanwhile, people still need to buy homes to live in, bubble or no. Unless you actually want to take the Obama plan of letting the government own all the land and just rent to the serfs.
The Obama plan? Pretty sure that's a bipartisan, already enacted plan. Don't believe me? Stop paying your property taxes and see what happens.
There's no such thing as 'land ownership' in the USA. All you 'buy' is a right to exclusive usage of said propery. You have to pay 'rent' (taxes) in order to maintain this exclusive usage right. You don't own shit though.
Indeed.
Allodial title people. This is all so much junk.
http://aadivaahan.wordpress.com/2011/06/28/thoughts-and-a-heads-up/
ORI
It's both fraud by the bank and a dumb move on his/her part.
If you gather a bunch of things from your car to make a few deliveries and accidentally leave your keys on its roof whereupon a thief comes by and drives off with it, he committed grand theft auto. But you were also stupid.
There was almost certainly fraudulence in the appraisal and other parts of the process. I think the legal term is "fraud in the inducement". But it was still dumb on the buyer's part.
+ 1
we live in a country where savings = loss do to inflation. so not chasing the dragon means you lose. there is a gun to the head. you are forced to invest or you see your savings turn to dust. And any talk of investing in a wealth(gold) was laughed at and "proved" to be a pour investment do to price control from the tptb.
you know I just relized something. The supression of gold forces investment into the system that supresses gold.
The supression of gold forces investment into the system that supresses gold.
Very workable insight. Thanks.
Hey fuck tard (Mr Annonymous), it's FRAUD -- not to be confused with robbery or rape. Fraud is a confidence game where someone with more information cheats someone with less information. Ever heard of a confidence game? Sure you did. But your single digit IQ wasn't enough to process it.
It would be hard to come up with a transaction where
both parties had the same information. Both the seller
and the buyer think they are going to gain a benefit from
said sale. Otherwise, there would be no sale.
getting caught up in the bubble craze doesnt qualify someone as a victim of fraud. maybe i shouldve sued etrade for letting me purchase etoys stock in 1999.
Do you think that everyone who bought a home between 2003 and 2007 were bubble chasing house flippers? How can you be so obtuse?
Xeno,
While I feel your pain, you knew what the house was selling for,you accepted it at that price.
A deal was cut, and your the owner and were happy until the SHTF.
So be it.........
No matter if you bought it to live in, or flip it.........you, and you alone are responsible for your personal debts.
Like everyone else here is.
Actually, I wasn't happy. Because unlike many people, we bought a house we could afford instead of the house we wanted. If the banks are not responsible for their debts, neither am I. You can't have it both ways.
Xeno, I feel your pain.
I'm in the similar position - bought a house I could easily afford for a home, not to speculate. Paid a sizable depost. Paid off the loan in a few years.
In hindsight I'd have been better off getting a giganticly large fuckoff ARM, buy something I could never have really afforded, then waited until the taxpayers via bailed out banks cut me a deal on how much I owed. Sure, I can see that having kickass longterm affects on peoples willingness to 'do the right thing'.
better to have been obtuse on housing then stupidly oblong on housing....xeno your outlook on all of the poor victims who were defrauded is the ultimate pathetic paradigm of what has gone wrong with our country. no personal responsibility for anything. always someone else's fault. thats why this country is wobbling under debt--everybody to be taken care of. buyer beware doesnt exist anymore. nobody needs to use due diligence. hey, if something goes wrong, its their fault---call the lawyer.
Kito, What do you do for a living ?
90%
yeah pretty much...without all those PEOPLE signing all those DOCUMENTS as active PARTICIPANTS in the bubble, there'd have BEEN NO BUBBLE, moron.
WTF, look at the goddamned MEW figures from the era and TELL ME they weren't exactly as you've just described.
So, from 2003-2007 everyone should have become a renter, the housing market would have collapsed from that wise decision, and what?
We'd all be smug in our section 8 projects, paying rent to uncle sam.
Trav doesn't care if the world is unfair, as long as it is unfair in his fish belly white favour.
Well presumably they saw the price, so, yeh...let em flip bugers and pay off their debts; its a crime against workers and savers if they get hand outs
and apparently to all the girls, too.
awwww.
who get's junked for saying "awww"?
Based on the NYT story and the Fed model:
You're a sucker.
Then again they can not possibly even start to foreclosing on all the delinquent homes in the U.S.A. unless they wanted to trigger a 1931 style nightmare.
My sister is slightly above water and stuck in a 6 7/8 fixed loan, because her income sucks. She relies on renters. Any programs to give a person who has made every payment an at market rate loan? (I'm no co-signing---she is a credit risk---but she voted for OBama)
Oh make no mistake about it. The President's re-election committee had a talk with these banksters about putting more money into The Economy. This is squatters rent phase II.
If you're lucky, MERS was in the chain somewhere on your refi. Maybe you can get a free house out of the deal. http://www.housingwire.com/2011/06/16/new-york-appeals-court-invalidates.... The banks aren't giving away money to underwater homeowners because they are nice. They are trying to avoid more failed foreclosures where they end up with a big fat zero. I wish I had known all of this before I paid off my mortgage years ago. Should have gone the McMansion route instead.
+1
the banksters own the governments. The United States, through the majority of her history, has been 'captured' by these jackals. The system is setup to intentionally exploit the populace on behalf of the cartel.
None of us should ever expect justice while the status quo continues in earnest
And as most of us here realize now... that strategy will keep working all the way up until the point where it doesn't. We continue to foolishly compound the eventual ugliness.
how do we continue a status quo "in earnest"? isn't it far more effective to do nothing instead? and yes "they are jackals"--but there are other creatures as well. Here, have a look at our financial system as it's working today:
http://www.youtube.com/watch?v=SRJEDGSdFJw&feature=player_detailpage
"In Darwin We Trust"
The Fed
Time to become a "WOMAN" Baby. No more coat tails.
And that Cartel has realised that if it continues down the path of saving itself a few dollars at the expense of collapsing the world economy then it threatens its own existance; and on that realisation has decided to change the rules again in a seemingly generous act which is in reality designed to save its own skin.
They are few, have power and act in concert. We are many, individually inconsequential and disparate (and desperate). They can move the markets to suit their ends - we have revolution or we go along for the ride on a journey of their design to a place that suits their purpose and interests and not ours.
We need to get organised and get these fuckers out.
I guess it is easy to "forgive debt" when it is POSSIBLY owed to someone ELSE?
If they do not have the valid note, how come they have standing to lower the principal by 50%? They are just trustees on the mortgage.
[If they do not have the valid note, how come they have standing to lower the principal by 50%? They are just trustees on the mortgage.]---FinalCollapse
Hi FinalCollapse.
Indeed. How will JPM and BofA answer to their note holders? Will JPM and BofA say simply their FASB-free books list the deeds at full 100% value? Creating yet another fraud.
Unless, of course, the govt becomes the note holder.
Sounds like a great consulting opportunity, from a legal perspective. I see a cottage industry forming: legal advice on how to get the best deal from whomever claims to own your mortgage, maybe even a free house or some such.
I know I'd pay a fee for advice from someone who actually knows what's going on and what actions that I can take. I'm current on my mortgage, though I don't live in the townhouse now, and am renting it out but not getting the rent in a timely manner and am not inclined to boot the person living there, for personal reasons.
It's a conundrum inside a dilemma wrapped in a quandary.
So is this broad gonna get 1099'd for the amount of the debt forgiveness?? If she doesn't I'll be doubly pissed.
Of course she will... But no-one will tell her until tax day ;-) Then she'll foreclose for reals ;-)
Sadly, she won't. See the link below.
Looks like the goodwill category of assets will be making a big comeback. ($300k mtg = $150 mtg + $150k goodwill).
I am guessing that they will then package the goodwill and sell bonds to raise revenue.
HA. This is exactly why BAC doing it. They are awesome with goodwill "calculations"
For BAC they recorded the value of Country Wide goodwill as $4.4 billion, even though they only paid $4.2B for Country Wide.
To date BAC has not written down a penny of the Country Wide goodwill.
Hard to believe that they trade at less than book value, (who the hell even knows how to calculate book value on these Mark To Unicorns POS's).
Snap!
They are awesome with goodwill "calculations"
just a warmup for when the USTrea$FED starts making theirs.
A 50% reduction in mortgage principle! Nigga whaaa?
That crazy black lady wasn't bull shittin' when she said Obama was gona' pay her mortgage.
I want a 50% reduction in my taxes!
And I want a 50% increase in my savings!
As a debt free person, where do I sign up also?
Mark-up my account Ben Bernanke!
http://www.thedailyshow.com/watch/tue-december-7-2010/the-big-bank-theory
Hope and change bitchez! Booyah!!
The income tax is unconstitutional.
So what will this program do to real estate values? I imagine it will be a net positive, but will it be large enough to matter? Now all of these underwater pricks will be able to sell and continue the 'property flipping' game. No lesson learnt whatsoever.
No, it is going to bring the prices down across the board. More than anything, on the supply/demand equilibrium (akin to the SPR release, except this will have a longer lasting impact), it is going to f $hit up. It temporarily relieves banks of their loan obligations, allowing them to relieve their borrowings (discount window loans). IT IS GOING TO CREATE MASSIVE DEFLATION IN THE SYSTEM, WHICH IS U$D BULLSIH (but only against other fiat, because Central Banks will continue to loan gold to facilitate performing loans). This is perfect cover for Bernanke to continue to monetize the debt, which he is doing with QE Light, and will continue through whatever medium. Now Bernanke can write off his MBS package, Major banks can take back their deposits, spin the cash into corporate debt/equity from their prop desks, and the subsequent inflation will be masked by the said above. One giant ponzi still working. Oh and hey, instead of doing nothing, buy silver...woops! Excuse me, the groove got me!
Unless they learned the lesson of "Bailouts"
I paid off my mortgage in 2002. Where's MY goddamn pony?
Quite.
Although I live in the UK reading about this sort of going-on really pisses me off. I paid my mortgage off by NEVER taking holidays (I don't remember the last time I had one, honestly), other than at home, and not buying any luxury unless I'd got the savings and could PAY for it. Any savings I have are now being wrecked by low rates.
Angry? You bet.
DavidC
Ditto.
This means that if we had not, the amount we owe would have been slashed and "paying it off" would have cost less.
Where's my refund?
That was one hell of a good comment! My answer. Solace & Iron bars!
Is debt forgiveness a taxable capital gains event? Will the IRS be contacting these people?
It is only taxable after the first $2 million, $1m for married/filing separately.
http://www.irs.gov/newsroom/article/0,,id=205004,00.html
Does this piss anyone else off as much as it does me?
Not really. It's no surprise if you realize what the game is now.
Agreed - this no longer annoys me, i don't waste time with it other than having a chuckle at the insanity of a game of musical chairs.... with no chairs... and the music is gonna stop soon ;-) They all fall down!
Zack, I should have read through the posts and seen yours before my post (lower). Smoking gun IMO. Legislated in 2006, enacted in 2007? That was the peak. How did stupid CONgress critters KNOW they were going to need to have this in place at the end of the peak which was not even being acknowledged in the media until 2008...? Any little birds talk to them in advance? IMO we have been set up in grand style and with mallace. Was the whole "terrorism" thing just a cover for the final raping of the American public?? I've said it before and will say it now, the attacks of 911 are completely overshadowed by the destruction the banks and their ilk have perpetuated by orders of magnitude!
Congress doesn't need to think. The thinking is already done for them. Those "birds" talking to them are probably emails they get every day, to tell them what to "think." The public, on the other hand, was told what to "think" with all the propaganda (TV) of the eternal rising of property value.
It was incredibly obvious that the housing bubble was there for everyone to see. Those that didn't see it were blinded by the idea of ever increasing "value" and to cash-in on the equity. At the time, a great way to keep the game going. Now we're in the bottom of the 9th.
I didn't hear anybody pissing and moaning when houses were being bought for no money down or loans above value. The carping about the reserve rates of banks don't hold a candle to the LTV on home loans! Leverage at 100% -- now that somebody is getting even more of a bump and all the bitchin' starts. Too little, too late.
Wow. Clearly, then, as many on this board will agree, I am an idiot . . . and Ms. Giosmas a raving financial GENIUS!
lol - yep it seems WE are the suckers these days... I remember being told that buying down the interest rate on my loan was stupid and i should just pay of the principal instead.... This was from our mortgage broker and I used two of my craziest tools - MATH and LOGIC - to draw out a loan amortization sheet that showed I'd be worse off at the end of the loan life if i used the money to pay off the principal now and not the interest.... She was actually surprised by the fact that I had a fricking clue what interest does over the 30 year fixed period... And this was after 2008 when 'lying' about home loans had been 'stamped out'.... bullshit... absolute bullshit lol
You're damn right it does. I didn't realize this when I wrote my comment above. Again I see I went through my own personal real estate hell a few years too early. Outrageous.
FFS how many people are going to ask this question? Read the damn comments and you shall have your answer.
One of the bankster pencil geeks must have finally figured on a 70% value downturn peak to trough.....especially since gimmick financing runs through 2012 for recasts. The banksters must feel a need to move their prisoners into a more comfortable cell in debtor's prison.
Liar loans become liar banks with mark to infinity.
This may be a very smart business move. I think Wells Fargo recently said they would not do any more reverse mortgages. The take on it was that they think housing is going to continue downward. With a reduction in the loan at today’s prices, the home owner may feel that he has a fair deal and not walk. As the value drops another 40% or so, he may be locked in, or tuff it out. Anyway, the banks can keep it on their books and delay default of the loan.
This may show how bad things really are and that the smart money says it is gonna get worse.
SP500 Buy any pullback until august 17 2011!
http://astrofibo.blogspot.com/2011/06/sp500-60min-buy-any-pullback-until.html
Err, WHY?
DavidC
because of the red arrow that goes up?
If I do, the S&P will descend. If I don't the S&P will rise. If
No matter which move I make, the market will do the opposite.
I've counted over 1,000 decisions to buy or sell, and 95% of them are wrong.
How is this possible, unless I have a curse on my moves, or am a soccer ball to a useless futbol god who is exacting some kind of payment from me for some perceived transgression? Why is the cosmos preventing me from even becoming a Virtual Portfolio Multimillionaire?
I think that 4closurefraud made the point repeatedly that if you ask for the note there is NO way they can come up with it. So All mortgages are Free at this point.
If a new agreement is signed (gift horse in the mouth) then that is water under the bridge.
"I begged and borrowed sometimes, I admit I even stole, but the worst crime that I ever did was play some rock and roll; but the money's no good...just get a grip on yourself...and you should know."
Sure, now that the JPMorgue is flush with free Bernank bucks, they're willing to play Let's make a deal. Bet they aren't too happy about NYT blabbing their covert forgiveness plan.
The wholesale debt buyers understand that there is no document chain leading to them, because they know it didn't lead to the party that sold it to them. The servicers have been doing this for some time on loans with no chain of title, partial to absolute forgiveness of the alleged payment. They all know no debt exists, period.
Only problem, you go check and see if it has been removed from the records. Nope, still there, and the party that claims to own it comes for their share eventually. That is how it used to work. Courts are challenging these claims.
They can not forgive or collect on what they do not have any financial stake in. There is no loss to any party except the servicer who can't collect money any more based on a null obligation. That is why theya are the one to foreclose. No one else dares make a claim to a toilet paper sandwich. They have all been paid.
It was a scam to get double paid before day one. The banks haven't put up their money for about 15 years and pre sell the obligation to various parties hoping they would not meet. Fan, this is Shit, You have met already? If the loans were all sold 5 times for example, about how much of the fake money does this equate to? Is it equal to all the financial problems for every government in the world? MBS, more bs.
insightful, thanks.
So let me get this straight, if you are in America and have mortgage, the best course of action is to stop paying the mortgage and you will get better terms or even better the mortgage written off? Incredible, why would anyone pay for a debt ever again?
Don't guess, find out. If they paid it off for you, you do have a right to know.
They need the revenue of people paying back their loans.
It takes years to get somebody out of their house and the banks know that in 10 years that other 150K is worth nothing anymore at current inflation rates that keep going up.
And without a secure income, the banks will go bust.
But a other fact for the shareholders is that this means the value of their stocks will DROP like a ROCK.
The first bank bailouts pissed me off, this just pisses me off more!
You Baby Boomers are pissed because you had to pay for your house in full? Cry us a river... At least you have one. You know, there are a lot of younger people out there who can't afford any house because the values are kept artificially high. Stop thinking of yourselves for once. I know it's hard. You've only been doing it for 60 years now.
I'm not pissed because I had to pay for my house in full. It pisses me off that my tax dollars, indirectly, are paying for peoples mortgages that are living in housing they can't afford. Yes, some baby boomers, government and banks are responsible for the artificial value of real estate. Government needs to get out of the way and let the dominoes fall where they may. I know this will hurt the economy and the retirement accounts of many, but like you say, it will be our children suffering for a very long time.
Its not that I cant afford a house personally, its just a horrible investment and will be for quite some time. Sucks I was born too late to miss out on the bubble. Would've loved to flip my first POS starter home into a McMansion but alas, no super-sweet countertops and jacuzzi bathtub for me.
Dupe - apologies
DW - so enlighten me... My home is PIF, I have paid into SS for 40 years and it will be 1/2 century when I reach 65 yo and I do not expect anything. I have 2 kids in college which I pay for. I pay all the taxes that most do, including 3 different states, Franchise tax, resident agent fees, business taxes in 2 (maybe 3) states, mineral taxes etc. Do I, in some way, owe you a home? Its Sunday, I'm working. Tomorrow is the 4th and I will be working. I got up at 5 am yesterday and worked until 4 pm.
I bought a home and paid for it over the years. I did not use it as an ATM. I did not trade-up and buy a McMansion. Now I am indirectly paying for someone else's McMansion. No talk of jail for liar-loan pplicants. No, they get bailed out. So tell me genius, why shuddn't I be pissed. I have been sitting on a ton of cash for years as I sold out my investment real estate - result - the FED is trying to force me out on the thin branches reaching for yield.
You wanna understand what is happening? read the Shock Doctrine.
Insult us all you want you fucktard, you are gonna miss us when we pull out. Growing up poor teaches how much whining accomplishes.
And here even on this thread we see the class warfare referenced in the article. Borrowers versus savers. I'm in the saver category and feel like a sucker at the moment.
Love your reference to Shock Doctrine. Head of nail, meet hammer.
I am so eff'ing angry now after making it this far down the damn thread. So many wonderful people pay this house off free or otherwise unencumbered by debt and we see a class of people who... danced in the sun among skittles and rainbows getting gifted free from stuff and houses they should have never bought in the first place.
If no one had any debt by election day, we will get 4 more years of Obama. Mmm. mmm.. mmmm!
not just class warfare, but generational warfare as well. to go along with the racial warfare, religious warfare, tribal warfare, etc, etc, etc...see a pattern here?
http://www.youtube.com/watch?v=0irL1M15DH8
3's the magic number
Preach it brother. These Boomer Parasites (tm) are a bunch of whiney cunts that wrecked the economy by living in opulent luxury their entire lives. Now that the fruits of their decadence have collapsed the entire Western economic system, they want to put the burden on their children and grand children to ensure they can continue living in opulence until death.
The infinite vanity of the Boomer Parasites never ceases to amaze me.
What a crock of shit. Push that GenX vs. Boomers agenda, troll. That's what they're paying you for isn't it? The people here know who the parasites are, and they ain't boomers. Boomers are just the marks in this con game.
MWTerrorist,
Hey seems you the whiney cunt, YOU lump ALL Boomers in one cart?.
Opulent?, how so?.Decadence how so?, my money is on the BULK of the defaults and walk aways, being Gen Xer's, and Y's.
This river runs WAY past the last few Gens of Boomers..........
Go back to 1913, and see who did what.That's no fun though is it, their all dead and buried.
They changed the system,crooks, not honest peole working and paying bills, and raising families.
Gotta have whipping horse, look in the mirror, it starts there.
I think your last line should be...
"The infinite variety of the Boomer Parasites never ceases to amaze me."
Vanity Boomer Parasite Theory...and all this time i thought fruits came from labor...go clean your room.
dwdollar,
Screw you,and the rest of you whining punks,have to blame someone. You think what we have,own is a gift?,like welfare bitches?.Your the thinking only of yourself generations,crying in your beer, for having to do what WE Boomers already fricken did.........work, and pay thru the kiester.
Only a handful made this mess, and it was not the Boomers.WE earned every dime we used to pay off our homes, and debts.
That meant work,and sacrifice by US.If you call honest labor, and payments over years,thinking of ourselves your an idiot.
It's called honesty, and keeping your word.NO ONE gave us shit.
Can't get a home?
Bullshit...........there are thousands of homes available to anyone with a job, and credit.
The example I gave above, a $350k 5yr old home, for $50k?.
If you can't afford that........you do not need a house.
Maybe they cannot get the house they WANT.
This is just the next logical step in the ultimate Ponzi move:The Ponzi bails out itself after it goes insolvent. IE: the perpetual motion machine of FRNs.
I was prescient and wasn't exaggerating when I said this week that the Fed is going to tell all Americans to simply come down to Washington and take whatever dollars they think they need.
I think that Tyler gets it: this was inevitable and in the cards from the very beginning. But they had to wait a polite interval when the political fallout would be reduced. And so they have.
It's not the end folks: as I put it recently, the Fed's job for a long time to come will be to put out one fire after another using the money hose. Else face a tsunami of defaults. They made their choice already: nobody will default even if they have to print a Quintillion to do it. Trillions sure don't buy what they used to.
http://www.sl-webs.com/deesillustration/artwork.asp?item=491&cat=satire
Kool, @Narco. The firemen in the epic sci fi story Fahrenheit 451 are now the money-hosemen.
so stay long energy stocks with particular emphasis on the alternative variant since "the goal of oil discovery is to drain every last drop of the stuff" per government dictat as applied (and not as conceived of course.)
News today is of a "mini-bailout" deal.
Maybe they can suffer through increasing the debt ceiling by only a trillion or so.
It will certainly have to be at least in the hundreds of billions of dollars.
"Mini".. if it wasn't so tragic, it would be hilarious.
This is fucking stupid. Just as the elite within banks were bailed out for bad behavior, so now are the peasants being bailed out for living beyond their means. Maybe 100MM more on food stamps is what it takes to have those very people realize DONT FUCKING ATM-YOUR-HOUSE
Yup. As I was saying earlier: this ain't just moral hazard we're playing with anymore. It's rotting out the core of capitalism. The Fed is picking winners and losers. And the losers are gonna win big time
Agreed. A fatal flaw we are now seeing emerge in this 'free-market' society is how, its anything but a free market. Wonder when everyone will turn to the 'losing' side of the spectrum since they know they effectively cant lose anyway.
Yup. We're about a quarter of the way down the slippery slope and picking up speed. It's not something easy to turn around either
the bubble happened. it happened in housing--the bubble burst--"dis is government bizness now." as far as we know the Pentagon is involved given government ownership of this economy being a prima facie reality. i agree with the plan to try and do what it takes to keep people in their home. still--is there a market solution out there involving price discovery or not? even the so called "market fanatics" have expressed little to no interest in having this occur which without a doubt to me has a lot to do with the amount of MBS still outstanding and "making sure it's not worth zero" even though the market for it for all intents and purpsoses has ceased to exist. sounds far from forward looking to me...
I owed $110K to Chase on my house. The house is worth $1M and my credit rating is the highest. They sent me letter after letter saying they'd reduce my interest rate. I assumed it was a scam and tossed the letters: "A bank offering better terms?" Finally, an independent mortgage man came to the door and convinced me it was a good deal. I signed a few documents and voila, a loan for 4% with overall terms in my favor. I think the strategy of Chase is to try to turn all its paper into AAA+ and to show the American people that it is working with homeowners to fix the problem.
Something in this story does not add up. I don't know you, no accusation, I am just asking: If you have a house worth that much, with $890,000 equity in it, you are NOT a default risk, at all. I don't understand why they "begged you" to refi.
Easy, prepayments (meaning refi'ing to a competitor) are a big fear of mortgage servicers.
If they can pro-actively get you to refi with them and stay on their servicing roles they keep earning the servicer fee each month. Servicer fees are big money on large pools of mortgages and help counteract revenue issues when originations are low.
Thanks grasp!
OMG.
You mean that is about to happen to all the people who PAID off their homes?!
**Sputters, why should I sign the papers on 890,00 dollars refi based on a mil home given the scenario presented here in this subthread with Miscreat, Grasp and the Stuck on Zero...
That would mean with the money I can finish out the student loans, make improvements and... actively participate in the US Economy again... Something that I am not sure of doing. I also smell something funny with the 1099 Taxes that has to bite somewhere.
Really.... we are strong in wanting to stay right where we are and pay off remaining debts by pure grit and cash. (While the PM's work for us)
There could be another reason, other than public relations statistics. I was paying mostly principal on the previous loan of 5.75%. With the reset I'm paying mostly interest with a rate of 4.375%. They may want the interest more than the principal.
Thats the way I always look at refinancing, and also the reason I don't do it.
Why on Earth did you agree to this?
New loan.. more years on the hook for you, and they get to churn all the paper.
It's not about the interest rate, it's about the flow (for them).
Well, if i could make my bad loan bags 'good' for $150k and have an air-tight legal piece of merchandise to re-sell in the secondary market at a yield of 4-5% I might want to do that as opposed to having zero and underwater in equity so far that my bank was a slab of dead meat.
I don't know but am fascinated in regard to the 'unintended consequences'. Remember, these dudes are not very bright.
I always liked Chase for their friendly tellers and for filling my fat bastard bloated belly with fresh cake and coffee at my local branch. Thanks Chase for years of friendly service ( Sarcasm off )
2 points.
1. Isn't the purpose of this so they can get the paperwork right this time and actually tie the debt to the person?
2. Mortgages are Tier 1 capital?
Bingo! Also removes a mortgage that was prime for eventual "strategic default".
argh
The "Zero Hedge" readers appear to have a number of ways of presenting their extreme views as somehow moderate. They will use terms like "bankster" to sell their radical ideologies to a wider audience of financially hard-pressed individuals. They will also imply that respected and reputable politicians are somehow of their elaborate conspiracy theories, which attracts members of far-right groups such as Oath Keepers. It is our job to make sure the people are not sucked in by this extreme and hateful cult.
You sound like a fucking joo!
Nah, just a fucking troll.
SPLC liar troll.. Worst scumbags in .gov's pocket..
Dear Illuminati sock puppet,
The truth about the Oligarchy is spreading. Why keep working for them? They are clearly evil, the high ranking abuse the lower ranking Illuminati, and will probably kill you and the other lackeys once they get what they want from you. The world will be better when their reign is over.
Nice avatar,
Let freedom ring!
"... respected and reputable politicians ... " hahahahahahahahahah.
+1
"... respected and reputable politicians ... "
Care to name a few?
Uh, maybe a couple?
Well, can you name ONE?
Anyone? Anyone?... Bueller? Bueller?...