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Prepare to Be Forgiven, Ye Mortgage Sinners
Although we waxed skeptical here the other day about Warren Buffett’s just-announced $5 billion stake in Bank of America, we allowed for the possibility that the deal will provide a handsome payoff to him no matter what happens to the bank. B of A could implode, after all, a victim of sinking collateral values for its mortgage loans, and of litigation over its securitized-lending business. There is also the wild card of homeowners challenging lenders in court to show clear title to properties that are in line for foreclosure. In fact, this issue alone has the ability to capsize the global financial system, since “clear title” is exactly what ceased to exist when the feather merchants of the banking world leveraged out real estate to-the-max earlier in the decade to create an $800 trillion derivatives edifice – the Mother Lode of Digital Money, as it were. All of that sum must be viewed at the moment as deflationary overhang, by the way – not to mention, a key stumbling point for those who argue that The Great Economic Crisis must eventually precipitate out as hyperinflation.
So, how do you produce even mild inflation, let alone hyperinflation, with the housing market in a full-blown Depression? Most surely not by expanding the capacity of banks to make mortgage loans. That’s been tried to death – first moderately, then aggressively, and finally desperately — with zero success. Despite trillions of dollars worth of mortgage stimulus and supports both implied and real, the residential market looks even grimmer than it did a few years ago. Existing-home sales fell 3.5 percent in July despite the fact that prices were 4.4 percent lower than in July 2010. Now that’s deflation. There’s also the $6.6 trillion loss of home equity that has occurred since the onset of the housing bust five years ago. Will it ever return? We can’t imagine how, although it’s possible that Buffett and our President think they see a way. The two have been pretty tight lately, raising suspicions that they had hatched a rescue plan for housing before the Sage of Omaha sank a pile of dough into B of A preferred stock, a fat six-percent dividend, and warrants exercisable for $7.14 a share. (The stock ended the week at 7.75 after trading as high as $8.80).
Buffett must have gotten something from Obama. Why else would he have announced a $40,000-a-plate fund-raiser for the President before the ink had dried on the B of A deal? Pretty unseemly, really. As ‘C.C.’ noted in the Rick’s Picks forum, the “Robin Hood of the downtrodden” has cozied up to the second wealthiest man in America. So what might they have talked about? The “housing problem” for sure. It supposedly will be one of the President’s key talking points in the jobs speech he’s slated to give when his endless summer actually ends after Labor Day. We expect the speech to mark Obama’s outward transformation from elitist to populist. As such, we can expect to hear about a plan that will purport to save homeowners rather than mortgage lenders, allowing the former to refinance loans at low rates regardless of whether their homes are underwater. The President may even demagogue the bankers by admonishing them to get with the program in a big way. We are about to enter the Era of Mortgage Forgiveness, you see, and it can work only if lenders find it in their obsidian hearts to favor wastrels just this once over well-to-do shareholders and bondholders Banks and rentiers are about to take a hit, since they will be cajoled into trading old mortgage bonds for new ones that carry a lower coupon rate. Politicians will be in the line of fire too, since they might have to make some tough calls that would effectively favor deadbeats and spendthrifts over borrowers who acted responsibly.
Lying to Ourselves?
And make no mistake, that is going to be the most delicate part of any political maneuvering that purports to deal with the mortgage crisis. The New York Times would have you believe otherwise. “Many of today’s troubled borrowers were not reckless,” the Grey Lady editorialized recently. “Rather, they are a collateral damage in a bust that has wiped out equity and hammered jobs, turning what were reasonable debts into unbearable burdens.” We are lying to ourselves if we accept the narrative that the housing boom/bust was caused by factors other than a reckless and massive collusion between borrowers and lenders. We are all to blame, really, although it would appear that, politically speaking, the time has come for the bankers to shoulder their fair share of the housing bust.
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If you paid in full, you still have been cheated out of 20 to 50 percent of the value of your home by banker market manipulation. The banks created a system to churn and burn mortgages without telling debtors, mortgage or no mortgage, you are paying for the systemic fraud!
I lucked out and bought before the bubble rise here in Phoenix in the early 2000's. My home right now is worth approximately the value of the payments I paid for it (discounting improvements I put in). If you retire a mortgage in 11-12 years you can actually avoid paying a huge amount of interest in the process of acquiring the home.
You miss the point, I can afford to stay. The question is WHO should pay for what the banks did? Should I work for the next 15 years to pay back a loan while my property continues to depreciate from the bank's destroying of the market? Or, should the bank stockholders and officers pay for what they did?
I do not think it is fair that I lost my savings to fund banker bonuses (and mortgage brokers who never should have been licensed) when they hyperinflated the market. They never disclosed to buyers what they were doing.
I came in with 1/3rd down, then remodeled the home and never was late on a payment. I am a great neighbor. In exchange for this "responsibility" I received a clouded title and a depreciating asset that was caused to depreciate by the banker negligence and short sightedness.
I refuse to be their indentured servant.
Absolutely not - you should not pay unless you choose to. There is some kind of legalese in the documents you signed that spells out what happens should you walk away. If you no longer wish to pay for it, then walk away. Hopefully this will result in you no longer being their 'indentured servant' as you say.
you are way off base on this one......plus i wouldnt feel so confortmable sitting there with a fully paid property........thats a bullseye for government
Am I off base by:
Is the 'new noble' to screw the banks for all we can because the screwed us or others? And therefore I am 'hopeless' for not playing in this way? If this is hopeless or ignoble then I will take it.
As far as being 'comfortable' you assume way too much. I am only comfortable that I don't need to fight legal battles regarding documents that bear my signature. I have no trust that the system or the government will not come after me in the future, though.
Hopeless!
Not any more. I took action. It is called war.
A army of hapless sheep against the fine tuned soldiers of fortune aka Banksters.
I have zero, count it ZERO BIATCH, feeling of loss of personal credibility. I played the game well my friend and never missed a payment till my country took me down.
Now, this is no country for old men.
My country left me i did not leave my country.
out.
I admire your balls on this. If you're in the Southern Ohio area, I would like to have you as a client when the SHTF. Better save your litigation money.
This requires no courage in a non recourse state. I would suggest everyone do this in a non recourse state.
Sounds to me like you are trying to convert your mortgage into a call option.
Unfortunately, short term expediency precludes the long term effects.
If you think the banks are in trouble now, just wait until after this proposal creates an entire industry with rates below the historical mean.
What happens when inflation arrives and rates return to 6%+?
Look at the condition of Fanny and Freddie.
Now the banks will be "underwater", stuck holding vast amounts of loans that return only 4%. It's sometimes hard to remember that this 4% is not pure profit but must first be used to pay the bills. That the money they lend is largely money they borrow.
It's all very complicated to detail in a paragraph, but the bottom line is this will be just one more major kick of the can down a road toward a cliff.
My neighbor was one of those risky borrowers. He tried to get a loan mod and they told him he had to be in default first. So he stopped paying his mortgage, and instead started improving his house. I mean, he's a heavy equipment operator - truck driver, so he had backhoes and skip loaders to make his backyard into a paradise. He planted huge palm trees, dug a pond, started a putting green, put monster palms in his front yard, everything.
His loan mod failed never came. About 7 months ago, he walked away and moved in with his girlfriend. Since nobody was watering the lawns, trees, grass or anything, the house next door is now a fire hazard. It's all dying.
Apparently, someone is at least partially staying there, likely squatters. But they don't water the lawns, prolly no water utilities turned on. So now I got squatters for neighbors, living in a fire hazard. Nobody seems to care.
The new refinance program will somehow benefit the banks much more than homeowners because as in everything "the devil is in the details".
There will be lots of empty promises and false hope by our illustrious govt leaders especially with elections right around the corner.
They are worried about a dollar default. I guarantee every new mortgage will have a clause in it protecting the banks in case we have some new form of money or a resetting of values in the event of hyperinflation. Im keeping mine just like it is, Screw their two % and fees. They did not want to refinance when it mattered so now I only owe 6 more years with a chance of hyperinflating out out the remainder. I like my odds and I am not signing JACK.
It's depressing to read all the comments on here whining about 'freeloaders' and mortage deliquents getting a break (which you know will never happen, anyway) or even 'free houses'. Can't you see that this is exactly the mentality that the bankers want? Personally I'd much rather see some actual real human beings get a hand out rather than the god damned banks. I couldn't care less if the borrowers acted irresponsibly and didn't pay their mortgage. Oh, boo hoo, they got away with free candy and I didn't! Stop acting like jealous little children and remember who the real enemy is.
And Obama will not "transform into a populist". And the banksters will not shoulder anything heavier than an Armani. Yes, the teleprompter will be full of populist ire and promises of reform...then the speech will end, the financial industry lobbyists will write a ripoff bill named "The Homeowner Rescue Act," and all the money dedicated to it will go to the banks (see HAMP).
Please, don't upset yourself over fellow citizens getting rich (or even getting a nickel) from this disaster. Ain't gonna' happen.
True, if it comes down to making a choice, you have to acknowledge that it was the banks that created this market, they were the actual risk takers. Why should they push off the costs of their bad decisions on innocent parties? Listen, i pad too much for my house relative to now, but it was affordable when I did it, and that was the going rate. I did not create the going rate, or the manner in which mortgages were offered, I just committed myself to a too-high price. Now it's all my fault?
Not worth it!
I think making all existing home loans principal only is the best fix they can do here.
What about renters? This wouldn't be fair to them.
The lesson we beat into children every day of their lives is that not only does enough money make anything right but lack of it turns practically everything into a crime.
The bankster bailouts were good because the banks are rich, but mortagage bailouts are bad because homeowners are poor (comparitively speaking). See also drugs in Hollywood and fraud in politics/business. In other words, "only the little people pay taxes."
both bailouts are wrong because they take money from generally honest hardworking people who were prudent with their finances.
No more bailouts please.
The point most are tring to make is that no one should be bailed out. Banks or individuals. Bankruptcy is the only real and right choice.
The principle is sound. How about we just return to enforcing the law transparently, and providing equal justice to both banks and individuals? What the banks want is to distort commercial law, real estate law, and annihilate the borrowers rights to a fair trial, all to cover their schemes. What in the hell is left after that? Does the destruction of the entire concept of legal equality have any repercussions? Anyone ready to invest in a climate where differents sets of rules apply to different parties? Does this accord with a government that inspires obedience? Just how are we supposed to get away with all this without anyone noticing?
The banks have already been bailed out - they can't be 'unbailed out'. Yet the taxpayer has recieved little.
What if ALL mortgages were rest to a given equity level and /or interest rate? Would bank shareholders suffer - NO they got bailed out when they should have gotten nothing so they have little to complain about.
What I cannot abide is a sytem that only SOME recieve the benefit of the government becoming the mortgage underwriter of last resort. If they are going to do it, they do it for everyone. This doesn't have to be a big 'cost', the government could potentially recoup all costs and more. They can also repackage all of the loans and sell those to the market with government guarantee...
Is it what we would expect from a free market - no, but this ain't a free market and hasn't been for some time.
Two wrongs don't make a right.
On the other hand, two rights don't make a wrong, either. But three lefts do make a right. Time flies like an arrow; fruit flys like a bananna; and so forth, and so on.
One of the things that pisses me off the most is that the banks got bailed out with a trillion in cash up front and trillions more in backstops and lowered borrowing costs, as well as being paid to park all those new taxpayer sponsored funds in reserve at the Fed, not to mention most of the really toxic garbage was not even on their books to lose money on anyway, it is carved up and levered and sold to the Norwegian Sovereign Wealth Fund and the Ohio Teacher's Union retirement account, and CalPers for them to swallow the losses. Very damned little of the real money put up for mortgages was ever actually the banks own. Take my mortgage for example, $131,296 I borrowed at 6.5% for 30 years and Eagle Mortgage was the originator of the mortgage which they "sold" to Chase two weeks later. But neither Eagle nor Chase put up the original funds, those came from Ginny Mae. Which means the taxpayer in effect. So the tax payers put up the original funds for my mortgage, and then they bailed out the banks when I quit paying via a bailout, and since my loan is 100% guaranteed by the USDA so once the bank does sell the place at foreclosure (if) they will add up all the balances and fees and insurance, and taxes paid, and submit a bill to the USDA for that as well. Remember, Chase was just a servicer which did not put up the original mortgage amount so when Ginny gets screwed they also will get a bailout, in the end my house will have been paid for maybe 4 times by the taxpayers and probably still be empty or have a welfare family living in it for free, and my credit will be more or less permanently in the ditch.
Sorry, but that horse got out of the barn and ran off into the night long ago. The barn also caught fire and burned to the ground. There is NO going back. The bankster criminals have seen to that. Whining and blaming working people all the time is about as helpful as taking a flying you know what at the moon.
Yeah I have already bailed out the banks. Now the freeloaders want me to bail them out too? Why can't you just all get along without my money?
Not to knitpick a possibly fictional accuont of what may happen -- but I have got to wonder....
If this were to occur:
How about the people who have already lost their homes? Yeah, okay - probably too late to help...can't go displacing other people out of newly purchased foreclosures. But in the case of wrongfully foreclosed properties over the passed years...I guess those folks will be out of luck unless they wish to pursue litigation.
This is a sticky wicket - but where confusion exists on who is the rightful bank - will it between a coin toss as to who will offer the homeowner the refinance opportunity? I've seen foreclosures where more than one bank thinks it is the rightful foreclosure. I've read about people losing their homes only to learn they are the subject of yet another foreclosure from a bank they've never heard of. While an exhaustive process, it seems to me that possibly the best way to address any sort of contemplated correction is case-by-case. I know...I know...a nightmare...but I'm not seeing that any sort of broad brush stroke is going to fix this cesspool of bank issues & fraud.
I've about had it with being responsible and paying for everyone else to be irresponsible and greedy. I've had it with paying $4500 a year for health insurance that I don't use because I have been to the ER once in my life and maybe get a sinus infection every other year that needs $5 worth of antibiotics.
I've had it with paying the same amount for car insurance as someone who could have caused a 15 car accident with damages in the millions five years ago since that is off their record now. Since I started driving 18 years ago I have made a total of 0 insurance claims and been in 0 accidents.
I've had it with paying insane tax rates when billionaires can get away with paying almost nothing.
If Obama gives away homes or 1% refinances for under water home owners and I can't take part then I will have carried my last straw. It is criminal that a bank forces you to pay them double the value of your home over the course of the loan because you have no other choice. If I am stuck with 5.5% while my irresponsible neighbor who hasn't paid his mortgage in a year gets a refi then I am not going to pay another dime to anyone.
I HAVE ALWAYS PAID MY DEBTS. I HAVE ALWAYS PAID MY INSURANCE. I HAVE ALWAYS TAKEN IT UP THE ASS TO FINANCE THE IRRESPONSIBLE. NO MORE!!!!!!!
Chase can forget my monthly credit card payment
Bank of America can forget my monthly credit card payment
Best Buy can forget my payment
Home Depot can forget my payment
5/3rd can forget my mortgage payment
When the responsible stop financing the irresponsible we will get our truth. When the healthy stop paying for the sick we will get our change. When those who are good for our debts decide that we will no longer pay, we will get our Armageddon!!!!
Thanks for paying inflated health insurance rates and never using it. I am sure as a doctor I got a small cut of your insurance payments somewhere, however small, however indirect.
Thank you for shrugging, Atlas.
...'bout time
So your sinus problems are why my rates went up? Thanks.
Health insurance is not for health problems. It is so you don't destroy your family with debt if you actually get screwed up bad. Stop using health insurance for health problems that can be solved or waited out through suffering, quarantine, natural healing processes, or lying in a ditch after a car accident until your broken bones naturally knit back together.
Do us all a favor and stop abusing your health insurance for the purpose of maintaining your health. The rest of us cannot afford your "milking the system".
Hear, hear!
Sort of reminds me of a great flick replaying itself in a newer perverted version.George C Scott in the "Fim Flam Man".Obama is now starring as Mordachai Jones,master of backstabing ,double dealing.The ultimate scammer!
Weirmar hyperinflation drove the cost of food to feed a family to 99% leaving nothing to service the cost of housing. The saving grace of many was that they could burn banknotes so they wouldn't freeze to death. Germans sold all the family jewels for a few bits of gold.
Problem with today is that electronicaly produced zeros don't provide much heat. While the wealth of many is tied up in trusty never going down in value real estate gov'ts and CB's are hyperprinting currencies into oblivion. Gold at 87,000,000,000,000 marks per ounce was its fair value at the time.
I seriously doubt to see any forgiveness except for the banks in "broad legal immunity" in all mortgage cases. The banks are pushing real hard to only allow cases of preditory lending but gain that 'get out of jail free card' for anything else they did against the law, including robo-sigs. They know the cases for preditory lending would be easy winnings as these cases would be against those with little to no assets to fight a court battle. The banks are willing to agree to a 25 billion settlement if they get their way tells us they have much more at stake.
"The courts must be called to our aid, debts must be collected, bonds and mortgages foreclosed as rapidly as possible.
When through the process of the law, the common people have lost their homes, they will be more tractable and easily governed through the influence of the strong arm of the government applied to a central power of imperial wealth under the control of the leading financiers. People without homes will not quarrel with their leaders." - The Bankers Manifesto of 1892
The banks are going to win I bet. Our glorious leaders want the illusion of things getting better but in reality they will not, just a smokescreen while the banks get off the hook. Tell me the statement below is not a tell...
"Federal officials are aiming for a settlement by Labor Day, with some insisting that making a deal soon would give the housing market a much-needed boost and avoid the risk of a protracted legal showdown with the banks."
http://online.wsj.com/article/SB1000142405311190407060457652128289453415...
I have never found original source material for any of these quotes including Rothschilds alleged quote about caring not who governs.
This is probably another example of enemies making up shit like the protocols of the elders of zion.
While I have seen the quotes, I am not specifically aware of the origins and take them with a grain of salt until proven otherwise.
To squash the "conspiracy theory" excuse, I offer a documentary called The Ascent of Money. Dr. Niall Ferguson tells the story well.
It is available on PBS.org and I just saw it has won an international Emmy.
So:
1. Written and presented by a Ph.D
2. Available on PBS.org
3. Internationally acclaimed.
I am not referring to the protocols or anything else whatsoever. I am referring strictly to Rothschild and his hand in heavily influencing/manipulating our present day system.
Ok. so all you people downrating this comment why don't you show me the original source material for this quote.
they better make it REFI AT 1% across the board, with principal reductions and at market value ....its Obamas last chance and it has to be REAL BIG !...if he is as good as be crooked , as i think he is, He will not swing and miss this time
Bankers shouldering their fair share of the housing bust? You've gotta be dreaming.
So when your bank calls you to refinance, before this is announced, don't do it. There will certainly be some fine print that disallows you from taking part.
Millions of mortgage squatters live free and havent paid a dime in 24 months, so now theyll jump at the chance to pay their mortgage at a lower rate? With a new 'marked down value'? This is delusional.
Delusional? Check
Make Obummer seem like he gives a shit and knows what he is doing? Check
Save the banks from their robo signing fiasco? Check
Will it work? Who cares? We gonna get re-elected!
It is part of " hope and change "
They gonna hope this changes da economy
I don't need to see your balls - lose the photo.