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Slick Willie Calls For Broad Principal Mortgage Writedowns
Bill Clinton, in what appears to be an attempt to succeed where the IEA failed so miserably to score some brownie points for the president, told Bloomberg's Al Hunt during an interview, that Bank of America Corp.’s accord with mortgage-bond investors may give more “underwater” homeowners a chance to cut the principal on their home loans. "You’d relieve the anxiety of countless Americans who would know they could hold onto their homes." That you would also bring moral hazard to the masses and demonstrate to the public that the alternative of prudent monetary management is not insolvency, but yet more bailouts, apparently was lost on the slick one. And confirming that he still has no clue how anything in the ponzi system works, he added: "You lift not only an economic, but a psychological burden off of the homeowners and the banks,” he said. “And we’re free to start lending again, we’re free to engage in normal economic activity." Apparently marking down one's assets, which would in turn lead to massive Tier 1 capital (as artificial as it may be) erosion, and a need to funnel hundreds of billions of new cash in on the balance sheet, while at the same time setting off a chain reaction whereby everyone else is forced to remark their assets (all currently at par thanks to FASB encouraged Mark to Unicorn), an act which QE 1, Lite and 2 have been doing all they can to avert, is stimulative to "lending". And this is the thought process of the person credit with generating the last American budget surplus...
This is one of those rare occasions when one must commiserate with Brian Moynahan:
Brian T. Moynihan, 51, the chief executive officer of Charlotte, North Carolina-based Bank of America, said in April that “we do not see broad-based principal reduction as a sound policy decision” for the country.
“It’s hard to see how we could justify reducing principal for many delinquent customers who represent a small portion of borrowers, but not for the vast majority of our customers who have stayed current on their loans,” he said in the prepared text of a speech.
There really is nothing more to say on this one. Which means that Clinton's "modest proposal" will likely be enacted very shortly.
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And to those of us who responsibly managed our finances, can we please have some "free" cash too?
If memory serves, it was this same Bill Clinton that signed the law removing the wall between investment and commercial banking. Gee, that worked out well.
Do it, but do it in Chapter 13, which is five years of no picnics. It was that way before the Nobelman decision (1993). Doing it would put a floor under the home market too.
How are the banks expected to process principal write-downs on mortgages they can't prove they own?
Wait a sec, there may be a method to this madness...they can write down EVERY loan in a process that requires entirely new documents...thereby giving them a fresh set of mortgage docs/files that are actually legal.
The horrible secret is that housing prices aren't even close to what they should be. People should be able to afford housing and they speculated the housing to the point where loans where needed on top of loans. Now they are afraid of the housing price to go down because that lowers the value of their investments and they are out billions of dollars. Also they can't reduce the principal at all, and they know it. Because who will come up with the rest of the payment to the bond holders. You see if there is a miss in the payment schedual or they don't get the contractual agreed amount, the bond is in default. And then the bond issuer is contractually binded to buying back the bond at full price plus any fees. The banks don't have the money and so the insurance companies (sorry company) AIG would have to foot the bill since they insured these bonds. But they don't have it either, because they invested the premiums in the same crap bonds that you bought.
So no way they will do this, it will start the final implosion sooner rather than later.
Clinton is the TURKEY who got passed thru the Democratic House in 1993 a tax increase that was RETROACTIVE to the beginning of the year! DEAD people had to refile their taxes!! .......and his "pointman was...........ta da ..>>>>RAHM Emanuel!!
How crass of him. I wonder why female principals are the only ones he wants to give write downs to?
They like Slick Willies " Cigar box collection".
I just received word that the house 2 doors down is being short sold for 149K from a high of over 450K just a couple years ago. +65% drop, sweet, huh? I see these kinds of people daily in their homes trying desperately to maintain a sense of normalcy as their lives are being turned upside down. In my studies of things I'm no longer upset at the "deadbeats" that aren't paying their mortgages.
The fault lies in the term "bifurcation". When the financial institutions entrusted with our mortgages bifurcated the promissory note from the wet signed first deed of trust the agreement was essentially killed. They attempted to obfuscate their activities by creating a Delaware corporation named MERS. The NY supreme court just recently upheld a unanimous ruling making any mortgage so tainted as invalid with the holder of the copy of the deed having no standing to foreclose even if they have a defaulted promissory note. It is this bifurcation, this breaking of trust, that began the cascading of diminished values that has become so pernicious.
The implications somewhat parallel the jubilee issues surrounding the crucifixion of Christ. That year the real estate ownership records maintained in the temple were to be re-issued to the family clans and new agreements could then be negotiated. I think this uncertainty is at the heart of our disbelief and unfaithfulness in the promises of God.
I have my own solution to this madness. All agreements need to be unwound to the point of bifurcation and the deed/ownership of the property needs to go back to the governing / issuing agency. Any servicing of the debt from that point should be returned to the aggrieved party that paid it. If they made few payments or many before defaulting, they're only reimbursed what was paid. If the local jurisdiction wishes to provide the property to be sold to the party previously servicing the now dead note as a first refusal offer, so be it. The reimbursed funds could be used for the transaction.
If these terms are too onerous for the financial institution, then treble damages and restitution prior to criminal charges would still be merciful for what this nation's been subjected to.
Dude - you don't pay you lose house. Bank go bust, equity wiped out, bondholders step in if anything left.... prices drop to clearning level - buyers and investors step in and market stabilizes and eventually rises. Fuck everyone's contrived, bullshit solutions. YOu cannot prove you have the rights to foreclose, tough shit. You foreclose on the wrong house due to fraud, you go to fucking jail and pay a massive fine to the homeowner... Basically, let's get back to the rule of law, not the kleptocracy we have now.
Exactly.
Dude - you don't pay you lose house.
Fair enough, but if you kill the agreement before the payments stop, you're culpable for more than losing standing/the house. You're a criminal and susceptible to any and everything the law can throw at you, including restitution to the aggrieved.
In bizarro world you are rewarded for being a fuck up, so quit whining about how you were responsible and did the right thing, blah,blah, blah. This is bizarro world and nobody gives a shit. You must think you are on the planet formerly known as earth.
Yes please, Missah Clintin, as I new buyer, I would love to see property values slide another 30%...which is exactly what would happen when all these bubble-buying hottentots finally get out from under their underwater McMansions.
I never inhaled a Broad Principal Mortgage Writedown.
The enlightment is actually the fact that the 1.6 Trillion dollar subprime "bailout" (which was actually government GUARANTEEING the entire 1.2+ trillion of subprime mandates in the name of the Community Reinvestment Act (CRA) is only 1/40th the size of the 62 Trillion dollar Medicare and Healthcare Nationalization that was just passed on your behalf.
Those unfunded mandates (perhaps scaled over an average middle-aged American's lifetime...lets say 40 years), averages to...you guessed it. Another 1.55 Trillion dollars of our money going down the tubes and into the shitter.
Remember, we apparently voted this clown into office, the circus of Czars looking out for our well being and a world of promises made to help better this society and keep you on a morphine drip into oblivion.
Sorry to hear about the underwater mortgage situation, but the long and short of the story is that less government IS the government we are looking for and it may be best to require our politicians in Washington D.C. to force a reset to break us off from nearly 100 years of suckling from the pig. Rich and middle-class suffered through the entire process.
I don't mind the less government mantra, but let's face it, this GOP spin line has not and does not depict reality. All that is being debated is the rate of government growth, not that it will not grow. Most people I talk to have pretty much resigned themselves to the situation any more, and do not engage in any kind of serious debate about the upcoming direction. Americans are famous for our denials, how else to explain the huge hole we find ourselves in and no large political implications. Much of the news is unpleasant any more, most people I discuss things with are more focused on their personal lives than anything emanating out of DC, and do not engage in discussing unpleasant topics, namely the American national politics and the deep financial issues. I realize ZH is dedicated to discussing these issues, but let's keep all of this in perspective.
Where to start...where to start...
"I did not have sex with that Woman..." is the obvious one.
Hmm...
Hillary is Secretary of State, Ron Brown, Vince Foster, and numerous other "former friends" in the grave.
Hmm...
Bill needs to stick with plugging holes in jewish dikes with his dick.
Moynihan...Moynihan...could there be any connections...
...think...think...think...
The race is on. The new trend is called "Aging in Place". Meaning that Boomers aren't moving to the sun belt to retire. My take on the race is this : Will Boomers die in their underwater McMansion before the bank arrives to foreclose? The NYT above-the-fold headline said that in NY it will take 62 years to process the state's foreclosures. That should suffice for most actuarial tables, regardless of advances in medical tomfoolery.
At least in some parts of Europe - where debts follow you for life, and the concept of jingle mail is ameerikin - the Danes are showing some Iceland in their veins - from a most recent bank failure - no socialization of Bankster bootybris here:
<Tragic humor>
If Bill personally coughs up a dowry for Monica, I'd marry her. (also for the tax cut) And this is to Putin: I am the father of John Edwards love child. Come and get me you old fart!
Mock Putin if you want but I would put him a fistfight with ANY politician from the US. That guy is mean and that is maybe what it takes these days to run stuff.
I'd love to see him in the cage with Obama and Barney at the same time. Shit kick them both so bad that big O would want to blow on Barney just to be let out to make his next tee time.
I was kinda mocking Edwards, a.k.a. Clinton Junior. But if putin shows up, certainly Edwards will be concerned about his love child, and call bubba, So all four of us can meet.
* I am still anti violence.
But I am a better lawyer that clinton and edwards put together, and a better spy than putin. The only question will be monica's future in our brave new world of principal write downs. (dowry's)
http://www.youtube.com/watch?v=0RZcCFEpIm0&feature=fvst
I used to play the piano and that is cool. Never saw it before. Do they have Little Birch Canoe on that one?
Used to be a conveyancing lawyer then went into drilling. Can definitley drill better than Putin and know that I am a better lawyer than those guys. Don't know much about spying however but I am willing to learn anything. Actually I just got my PAL in Canada which means I can own any gun other than a handgun or full auto so I guess I could be a semi-spy.
Instead of soiling Monica's dress so you can stick your cigar up her humidifier......why not just cum on your cigars and work it in like saddle soap on a new mit ? Spend more quality time with Jimmy Carter ! Swing a real hammer......and work on you aim !......I believe Billy did meat Hillary in college......on the astro-turf in his El Camino ! Monedas 2011 Loans will be forgiven, property taxes will be paid for them, heating and air conditioning and all utilities will be paid for them, all home repairs and even gardening, health care, dental care, food stamps, 3 hot meals at school for the kids, vouchers for McD and the Colonel, all transportation, vacations for the underprivileged, home care for the folks........and your reaction is to pay your taxes promptly ! It will cost 500K every year to totally care for a family......and all they are expected to do is breathe, eat, shit, fart and make more babies ! It's unsustainable and unmaintainable !
As long as Clinton's stupid idea is going to enacted, let me suggest a different approach. How about having the federal government guarantee the price of every house and condo in US for the price the owner paid for it or for what it was worth in 2005-2006. If a person sell his house for less than he paid for it or its value in 2005-06, the federal government cuts him a check for the difference. all payments would be subject to any outstanding mortgages. No endless negotiation about mortgage write downs. Just document the difference in the sale prices, disclose your mortgage lender and a check is issued to you an the bank , if there is a mortgage. If not , homeowner walks away with everything. real estate sales boom, tax revenues rise, real estate agents start earning commissions and paying taxes, everyone has money to spend and feels rich again. Sure it's inflationary but Clinton's idea is deflationary and isn't that what the Fed is afraid of? Just think of this as an FDIC plan but for houses . I call it the Home Value Guarantee Plan or HVGP. Wouldn't hurt the price of gold or silver either.
We are so far past Moral Hazard in thid country that it's silly to even argue. Virtually every strata of the elite class has drunk from the hazard well so why not the middle classes too? Unless, that is, your conspiring to termiate the middle class...
Wasn't there a $50 billion scheme (of the $3.14 Trillion TARP/TALF/AUTOs bucket of wet chunder) that was earmarked to do exactly that?
Was it not a total failure because the banks would not play nice?
It was such a blatent hand-out to the banks that even the administration had to admit it publicly.
Now now...don't be hasty...I'm sure they cherry-picked some good loans and "trickled down" on their friends and family.
Make sure you include "DARK INVENTORY" In those write downs {Slick Willy}.
It doesn't matter what valuations are or what the monthly payment be, most would pay as a house is a "home", but if you lost your job or taken a salary cut or the interest rate goes up to loan shark status or energy costs are killing you, it is out of your control.
For those of you who did the "right" thing and paid off your mortgage, but lost your job and are in danger of losing your home anyway because of non payment of property taxes or HOA fees, you are screwed and discover you really do not own your "home" anyway.
Home ownership does not exist.
Inevitably, a write down of debt's is necessary to economic activity. Period.
Wait...where did I read that? Oh, yeah, ...wait for it.....The Bible...
Jubilee.....bitches...
It's ok for the banks to be bailed out? .. but wrong for homeowners? Its wrong, for both parties. But, macroeconomic hell translates into millions of microeconomic horror stories. The gov bailouts ALREADY PAID YOUR MORTGAGES...you're going to pay them all AGAIN!!
hahahahaha....
Die America, Die die die.
We deserve it.
Is this really about "the American homeowner", or just making mark-to-market for the TBTF less vertigo-inducing?