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Odds Go Up for Mortgage Mods Post Election
This man is Ed DeMarco. He’s the acting head of the Federal Housing Finance Authority (FHFA). He’s going to lose his job in the next six weeks.
Democrats want to go back to the good old days when Fannie and Freddie were tools of both the Congress and the Administration. The Dems want the D.C. mortgage agencies to write off all underwater loans. The goal is to socialize the losses that borrowers are faced with.
DeMarco has been under attack by the liberal wing of the Democratic Party for the better part of a year. Democrats have wanted debt relief for underwater homeowners. DeMarco’s job as the head of the FHFA is to “minimize taxpayer losses at Fannie and Freddie”. As a result, he has a conflict with broad based principal reductions. "Very Important People", like Paul Krugman, have been attacking De Marco for months.
The reason that DeMarco is still standing is that he has clout behind him in the form of the Senior Senator from Alabama, Republican, Richard Shelby.
With the election over, Obama doesn’t have to play Washington politics any more. He can afford to piss off powerful guys like Senator Shelby. And that’s exactly what he is going to do.
Sometime between Christmas and New Year’s, Obama will fire DeMarco, and he will make an executive appointment to replace him. Whoever is the new boss at FHFA on January 1, will have clear orders on what to do. A hallmark of Obama’s second term will be wide scale mortgage debt relief.
The driving forces to kick DeMarco out (and get a pro-principal modification guy/gal in) has been these two Congresspersons:
This outcome is reminiscent of 2006, when another (very) liberal Democrat was calling the shots at Fannie and Freddie. Back then it was Barney Frank. We know how that worked out. It won’t end up any different with Waters and Cummings pulling the strings.
What will a principal mod plan look like? I think it will be targeted to the bottom end. Mortgages with a principal balance of less than $150,000 will get the greatest relief. Little, or no relief will be granted to those with mortgage debt over $500K. The individual mortgage restructurings will happen over the next two years. The timing will be driven around the next election. The payoff for the liberal democrats will be a shot at taking back the House in 2014.
Obama will announce who will be the next Treasury Secretary by the end of the month. Look for a confirmation of a coming debt relief plan from this appointment. If the appointee has a history of supporting debt relief, then DeMarco’s days are numbered. That’s too bad for America. He has done a good job.
The cost of a mortgage-mod-plan starts at $100Bn. It could go as high as $300Bn. That doesn’t matter at all. Bernanke will just print the money.
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If I lived from government handout to government handout, I wonder how worried I'd be about a currency crisis?
Not the least little bit.
This will play out like the Latin American debt cycle. Loans will be made. Default, based on total lack of fiscal responsibility. Then forgiveness covered by the printer. New loans. Rinse and repeat, endlessly.
Free Obama phones X 1,000.
Waters and Cummings have interesting I.Q. levels of 140. Waters at 80 and Cummings at 60. And, both have trouble reading their scrips out loud. Perfect fools...er...tools.
That must place them at the near top of the bracket, since the IQ Cap of the whole congress is only about 1000.
so very true, but that's giving them too much credit.
I think you are right on. Until the markets start to impose a cost (a true cost, not 1.6% forever) on accruing more debt then accruing more debt is the path of least resistance.
Don't sweat it folks, Frank Marshall Davis, Jr. is back in and all will be good like it has been for several years now.
jesus murphy thanks for the laugh, I needed one today.
the us taxpayer is buying all the mortgages anyways so why not. They should at least wait until the banks get paid in full for them before they write them down.
BOHCFMDJA
(bend over here comes frank marshall davis junior again)
haha....I'm gonna be stealing that one from you - BOHCFMDJA
Bruce:
I completely agree with your analysis. But who wins and who loses?
Will the Fed simply write down the value of the MBS it already holds? What about foreign holders? What about bank and insurance holders of MBS?
Most of the nortgages below 150k are "conforming" mortgages, and likely Freddie/Fannie/FHA/VHA sponsored, and therefore likely to be securitized. So what the hell is going to happen to replace the capital hole in the balance sheets of the owners/holders of these securities when they are written down?
The winners will be the banks, of course. The legislation is designed ostensibly to help underwater homeowners to get some relief on their overburdened finances.
What it really does is modify the loan in order to lock the person in the mortgage so the banks suffer many fewer losses.
:D
The losers will be the taxpayer's, pension funds, 401k's, insurer's, granny not that any of you who think you shouldn't have to pay back what you borrowed care. Your idea of morality is limited to what you think you deserve and in your mind two wrongs make a right. No one forced any of you to buy a house you were stupid enough to buy more then you could afford yet you think it is everyone elses responsibility to bail you out. It's wrong to bail out the Banks but it is also wrong to bail out people who willingly signed a contract two wrongs DO NOT MAKE A RIGHT. MERS would never even come into question had you been paying your payments so that argument is bullshit.
FHA Said to Set Stage for Treasury Draw as Losses Mount
http://www.bloomberg.com/news/2012-11-05/fha-said-to-set-stage-for-treasury-draw-as-losses-mount.html
The Election Should Be Settled by a Single Question:Who Caused the Financial Crisis?
http://www.forbes.com/sites/davidmarotta/2012/11/05/the-election-should-be-settled-by-a-single-question-who-caused-the-financial-crisis/
Third Way Document Proves Democratic Party Supports Institutionalized Looting by Banks
http://www.nakedcapitalism.com/2011/07/third-way-document-proves-democratic-party-supports-institutionalized-looting-by-banks.html#gAVrH7XLcAJL6PxW.99
Bill Black: Wall Street Urges Obama to Commit the Great Betrayal
http://www.nakedcapitalism.com/2012/11/bill-black-wall-street-urges-obama-to-commit-the-great-betrayal.html#PSX3YvxHLoMLw3Ct.99
Obama's Budget Has One Small, Missing Piece.... For $6.3 Trillion Dollars
http://www.zerohedge.com/article/obamas-budget-has-one-small-missing-piece-63-trillion-dollars
You ignore the little problem of who to pay that can give you title to what
you borrowed against.
The money trail was so convoluted(like any good fraud) with co-mingled accounts/funds its makes
Gordians Knot look like bend.
Pay who exactly ?
I know where the money came from at my closing , but they cannot give me title.
Nobody can at this point.I'm about to start Quiet Title proceedings which my
lawyer says could run to to $45k, with any out of state depositions.
If I had a couple of milion spare ,I would privately CRIMINALLY prosecute these banker bastards
for RICO.Simple case,written proof everywhere.
fool - READ IT AND WEEP !
The FBI began warning of an “epidemic” of mortgage fraud in its congressional testimony in September 2004. It also reports that 80% of mortgage fraud losses come when lender personnel are involved in the fraud. (The other 20% of the fraud would have been impossible had these fraudulent lenders not suborned their underwriting systems and their internal and external controls in order to maximize their growth of bad loans.)
"No one forced any of you to buy a house you were stupid enough to buy more then you could afford yet you think it is everyone elses responsibility to bail you out."
What a tired old canard.
Just think of all of the non-flood insured homes that are severely damaged after Sandy. These peoples' mortgages are literally underwater now.
So yep, Benron will be 'forced' to man the chopper one last time to "Save the Ponzi!"
Wow! Some kind of double posting server fart there.
Testing, testing.
Is this thing on?
Not much reason to keep paying the mortgage on a destroyed, uninsurable house. The feds will have to step in with lots of free fed insurance to save the much endangered little
bank.
Yes absolutely...and why I disagree with the analysis. Right now this Administration is being apprised...in my view...of a massive "debt bomb" about to go off in Lower Manhattan. Should New York City "technically" default on 100 billon in debt in order for the quarter trillion in new debt to "save the City's very existence" then housing will be the last thing the Administration will be dealing with...EVER. The banks are not going to issue new mortagages and they are not going to roll over existing debt formnet cash flow negative entities. The Fed has GUARANTEED this outcome by obliterating the spread trade. Equities look great STILL to me...there money is still good in my view. Muni debt? No way. "play the spread between Germany and Italy"...yes, yes?
The only decent guy looking after taxpayers so of course O wants to fire him...
DeMarco Shrinks Fannie-Freddie Without Help From Congresshttp://www.businessweek.com/news/2012-10-23/demarco-shrinks-fannie-freddie-without-help-from-congress
Wash rinse repeat
Hedge Funds Drawn to Fannie-Freddie Risk-Sharing Plan
snip
Fannie Mae and Freddie Mac, which help finance about two- thirds of new U.S. home loans, are seeking to shrink their footprint and reduce the danger to taxpayers four years after being rescued. While no deals have been announced, theFederal Housing Finance Agency says progress is underway. The regulator in March set a target of last month for their initiation.
“It’s been a really long time coming,” said Merrill Ross, a Wunderlich Securities Inc. analyst who covers real estate investment trusts that could be participants.
Fannie Mae and Freddie Mac (FMCC) have been backed by the U.S. after being seized in 2008 following the housing collapse. While the FHFA said in an Oct. 26 statement the companies won’t require any support after this year in most scenarios, they’ve received $137 billion of aid to help the recovery.
Taxpayer Responsibility“The taxpayer is directly on the hook for nine out of every 10 loans getting made,” Michael Heid, president of Wells Fargo & Co.’s home-loan unit said at the Mortgage Bankers Association annual conference last week. That includes loans backed by the Federal Housing Administration, and other agencies.
While there are a lot of similarities between proposals to replace Fannie Mae and Freddie Mac, there’s been little urgency among policy makers, he said. The plans would involve government insurance that guards against catastrophic losses.
http://www.bloomberg.com/news/2012-10-29/hedge-funds-drawn-to-fannie-freddie-risk-sharing-plan-mortgages.html
Racial Bias in Lending, Housing Draws High Court Inquiry
http://www.bloomberg.com/news/2012-10-29/racial-bias-in-lending-housing-draws-high-court-inquiry.html
Intra-European bond spreads? I don't know. I suppose we'll see after the Greeks vote on austerity or not. If they do, then Draghi has free reign and he'll probably make demands that would become the model for Spain, Italy, Portugal, etc. If they don't, all chaos will break loose and European bonds will be bouncing all over the place.
The German yield just went negative last week, which was a harbinger of bad things to come; Berlusconi is shaking things up; Norway wants out or at least to have a dual-track currency...
It's just a mess. By next mid-week, we should have the picture more clear.
:D
Dont forget France - things are coming unglued there too. Big exodus of well off / mobile people following their capital to London and Zurich. 6 months ago there were 400k french passport holders domiciled in London - I would bet it has risen at least 25% since then. Rents in London SW3, W8 & SW10 through the roof. Then we have the Brits who felt safe from UK taxation in Spain now scrambling to get domicile status in Switzerland to keep the Spanish tax collectors at bay who have woken up to the low hanging fruit that the German and UK ex pat communities represent. I think the capital flight that we saw from Greece and are seeing from Spain is going to spread fairly fast now that it is happening in france - if it reaches Germany then it will be game over for Mario D.
<cough> GM Bondholders <cough>
They were the test case. Smooth sailing from here as far as the eye can see.
That was a worthless and bankrupt car company in an industry that REPEATEDLY goes bankrupt not the Financial Capital of the World that literally "finances the existence of the European Union."
Took me a while, but well played vet.
The rule of law is only recognized as valid so long as it suits the purposes of the ruling class. Breaking the rule of law a la the GM bondholders was the example that will be followed from here on in.
Slow learner ?
Same as it ever was.
Only now they do it in front of you ,not behind closed doors.
Shit. When's the next plane to a less socialist place...like France? (And yes, I know which party Francois Hollande is from. I've lived in France in the past.)
Wait one second...even socialist France is getting clue: http://www.telegraph.co.uk/finance/economics/9659504/Francois-Hollande-lurches-Right-in-historic-U-Turn-to-save-French-economy.html#
Well this should end well.
I found this on the Barnstable County Registry of Deeds.
Who is gonna do a loan mod on this one?
Harmon Law and MERS Continue to Amaze the World
PS: auction was cancelled.
I keep telling Well's Fargo, that thanks to their criminal enterprise d.b.a. MERS, which destoyed the chain-of-title (within the first month of signing), my note is an unsecured debt, and that no thank you, I don't want any modifications that might negate this fact.
Within the MERS system, GNMA now claims to own my VA loan, yet you couldn't tell that by going to the court house.
Not applicable.
Same here.Totally unsecured.They tried to transfer it into a Trust five years
after the trust closing date.
BofA ,as imaginary servicer,to imaginery holder is trying the lost Note ploy now.
Only, I know exactly where the Note was,and still is, when I got a certified copy
this year.
So much for the banks behaving themselves after the 'settlement' with the State
AG's.
Same old shit,different container.
It's amazing the amount of fraud one can find rummaging through land records.
Instead of browsing Zero Hedge, maybe HUD should click over to the Land Registry sites.
Here's another one...this auction got cancelled too.
Did Harmon Law and MERS buy the Barnstable Registry of Deeds?
We both got junked by HUD.
LOL
Obama giveaways will be many, but mortgage modifications will be a bad deal for all concerned.
i say good.....Demarco is a fucking scumbag......
You can spin it any way each side wants.....what cant be spinned is the massive fraud on each of the mortgages, notes, titles, etc.....we are either a nation of laws or we are not......pick one
Fraud on notes and titles?
I have yet to meet a single individual who signed their loan documents at gun point. Every single one I ever met applied for their loan, and signed all the documents without duress.
We WERE a nation of laws. We are now sometimes a nation of laws, and sometimes a nation of decrees, depending upon how Emperor Obama feels that day.
DeMarco is the only one trying to do his fucking job, under considerable pressure from Timmy TurboTax, I should add.
Fuck the gun. If you can't get clear title to the property when it's paid off, you have been defrauded.
Anybody stupid enough to not understand that the biggest crimes going on in this country don't involve armed robbery shouldn't be here making a public ass of himself.
The banks didn't use guns to steal our tax dollars under TARP, QE, QE2 (a fabulous luxury liner by the way) or QEternal.
Get a clue or get a Gameboy, pal.
There are plenty that were scammed into signing things they never agreed to. If it was one mortgage, or one thousand, it might be possible to argue that it was the borrowers' fault. But the whole system was shot through with fraud from top to bottom.
We're a nation of too many laws. So many in fact, it boils down to executive fiat which ones get enforced.
I would like to add that it will only be the people who are not paying their debts who get bailed out again. Hmmmmm..... where have I seen this before? Shit, I think I might need to sell my house close all my bank accounts and get a new mortgage with nothing down through FHA then sit back and let the dumb motherfuckers of this stupid godforsaken country pay my mortgage for me. Seeing as how this has become the land of free and the home of the slaves, maybe I need to just rack up a huge credit card bill while I am at it and stiff it to all you fucking idiots out there that let banks loan your money out and pay you nothing for its use. The king of moral hazzard has taken the throne for another 4 years. He will probably bail out California too. Or Bernanke will monetize their bonds just like everything else. What a corrupt society.....
Buy Gold and Silver with your credit card and then pretend that you've lost it. When you get bailed out you'll accidentily find it again. Quelle surprise.
Good column, sounds realistic.
Buying a 149,000$ condo and not paying the mortgage seems like a good investment to me right now...
Nix on that idea!!. This will be for pre 2008 mortgages only.
backdate FTW
fabrication has no bounds
Why would you get a mortgage mod.
Deal with a pretender servicer ,to a pretender REMIC trust, that cannot give you
title at the end of 25/30 years.
And they said renting was for suckers.......
Spend $1500 on a forensic accountant ,and title report first.
When you can then prove you are an unsecured debtor,you are in the driving seat.
What about pre 2008 mortgages that have since been refi'd?