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FHFA To Treasury: Forget Principal Forgiveness

Tyler Durden's picture





 

FHFA Acting Director Edward DeMarco offered some prepared remarks today making it abundantly clear that his preference is for forbearance over forgiveness in the great mortgage hole in the US balance sheet's dam. As Bank of America's Chris Flanagan noted this evening "[DeMarco] effectively nixed the idea of broad-based principal forgiveness by Fannie Mae and Freddie Mac" in his comments on the Treasury's incentives to forgive principal on underwater borrowers. Citing three factors - NPV Impact to taxpayer, moral hazard, and operational costs - the FHFA Director indicated that forbearance (simply put - delaying foreclosure) is effectively a shared appreciation mortgage (SAM) without the operational complexities of a more formal SAM. BofA concludes: "his preliminary remarks on the incentive approach to principal forgiveness of GSE loans [mean] that there will be zero to minimal scale of such an approach." Back to the drawing board for the Treasury (or more forced-through unintended consequences?).

 

30Y Mortgage spread to 10Y TSY remains close to all-time lows...

Acting FHFA Director DeMarco Effectively Says No to Principal Forgiveness by GSEs

In prepared remarks today, Acting FHFA Director Edward DeMarco offered preliminary thoughts on the use of Treasury incentives to forgive principal on underwater borrowers and effectively nixed the idea of broad-based principal forgiveness by Fannie Mae and Freddie Mac. DeMarco cited three key factors in the analysis:

  • NPV impact to taxpayer. The Treasury incentive payments would be considered as an offset to the NPV benefits of a principal reduction modification.
  • Borrower incentives. This is the moral hazard issue associated with principal forgiveness. DeMarco noted that less than 1 million of the 11 million underwater borrowers would benefit from forgiveness. He expressed specific concern about keeping the remaining borrowers current on their mortgages, most of whom have always been current. He clearly expressed concern about incentivizing these borrowers to claim hardship or go delinquent on their mortgage.
  • Operational costs. He noted that forgiveness guidelines would have to be clearly rolled out to over 1000 servicers and that there would be costs associated with such a rollout. Moreover, he cited opportunity costs relative to other retention programs, such as HARP. These operational costs need to be factored into the benefit analysis of principal forgiveness.

DeMarco expressed a clear preference for forbearance over forgiveness, and indicated that forbearance is effectively a shared appreciation mortgage, with far fewer operational complexities than an explicit shared appreciation mortgage. He indicated that he would like to wrap up the discussion on principal forgiveness within the next few weeks.

We conclude from his preliminary remarks on the incentive approach to principal forgiveness of GSE loans that there will be zero to minimal scale of such an approach.

 


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Wed, 04/11/2012 - 01:04 | Link to Comment zorba THE GREEK
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They only forgive banks their debts. The bastards will pay some day.

Wed, 04/11/2012 - 14:31 | Link to Comment PayneNita
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my classmate's sister makes $62 hourly on the laptop. She has been unemployed for 5 months but last month her pay check was $13843 just working on the laptop for a few hours. Read more on this web site ....  http://bit.ly/FPPP3j

Wed, 04/11/2012 - 01:05 | Link to Comment SHEEPFUKKER
SHEEPFUKKER's picture

Moral hazard?  lol......good one. 

Wed, 04/11/2012 - 01:04 | Link to Comment piceridu
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DeMarco's hot tub "accident" or small plane crash in 3, 2, 1....

Wed, 04/11/2012 - 01:06 | Link to Comment BobPaulson
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A terrible accident cleaning his revolver...

Wed, 04/11/2012 - 01:38 | Link to Comment UP Forester
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....behind his back....

Wed, 04/11/2012 - 01:55 | Link to Comment UP Forester
UP Forester's picture

....hands in zip-ties....

Wed, 04/11/2012 - 06:38 | Link to Comment Frankie Carbone
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....the bullet went through his head, richoted off the doorknob, flew into the bedroom, taking a right turn and stiking his spouse between the eyes.....

Wed, 04/11/2012 - 01:06 | Link to Comment nbsharma
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tough problem to solve, however, the moral hazard argument makes sense.

Wed, 04/11/2012 - 01:06 | Link to Comment Ms. Erable
Ms. Erable's picture

This douche nozzle cites moral hazard? Huge fucking balls. No brains, but HUGE fucking balls.

Wed, 04/11/2012 - 01:10 | Link to Comment infiniti
infiniti's picture

Tomorrow's news:

FHFA Director Edward DeMarco was fired on Wednesday, in a surprise move by the Obama administration. Barney Frank, former chairman of the House Financial Services Committee, was tapped to take his place.

Wed, 04/11/2012 - 02:20 | Link to Comment Ms. Erable
Ms. Erable's picture

So... you're saying Obama tapped Bawney's ass?

Wed, 04/11/2012 - 01:20 | Link to Comment ss123
ss123's picture

There is a moral hazard with debt forgiveness, but no moral hazard with pumping house prices up in 2004-2007 so that first time home buyers in their 20s were fucked for the rest of their lives?

Wed, 04/11/2012 - 01:21 | Link to Comment DormRoom
DormRoom's picture

zombie household balance sheets.  Not good for an economy that relies 70% on consumers.

Wed, 04/11/2012 - 01:23 | Link to Comment williambanzai7
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Socialism for the rich, capitalism for the poor.

The world is upside down.

Wed, 04/11/2012 - 05:31 | Link to Comment cossack55
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"I like the way you think"

                Sam Kinison   Back to School

Wed, 04/11/2012 - 05:49 | Link to Comment navy62802
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That is one of the central tenets of fascist economics, as implemented by Benito Mussolini.

Wed, 04/11/2012 - 01:31 | Link to Comment skepticCarl
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"his preliminary remarks on the incentive approach to principal forgiveness of GSE loans [mean] that there will be zero to minimal scale of such an approach."

Finally, some positive news covered on ZH.

Wed, 04/11/2012 - 01:31 | Link to Comment mr. mirbach
mr. mirbach's picture

Forebearance? After this summer's inevitable aftermath of additional 20% -30% devaluations in home values maybe he'll rethink his position. OTOH, when more properties go glup, glup (underwater) will more mortgage holders opt for a strategic default?  Remember last summer when Van Jones was calling for a mortgage payment strike? Now would be even a better time for a mortgage payment strike as the TBTF Banks and the FED are tettering on the brink of collapse. 

Wed, 04/11/2012 - 02:29 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

maybe, mr_m,  but why?  are housing prices his problem? 

mrPolo seems to have some decent agruments;  this is "equivalent" without any legislation or paperwork

he may have failed to mention (wink, wink) this strategy may keep swaps from triggering; plus, the deal is still foreclosable and we know banksters!

also, doesn't this give us the added benefit of m2"shared"~~a new unicorn, BiCheZ!   cherd

now, if you want to start a mortgage strike, isn't that like taking out an equity loan?  with falling equity, too?  i guess at some point they would examine your affairs (like they haven't, already); and if you were making a "statement" maybe they would foreclose instead of forbear? 

so, yeah, the FHFA will throw around 'equivalent' and 'shared' and 'forbearance' b/c they get to keep the hammer on the property

in RE/propertyLaw, the hammer is the hammer

that's how you get paid

Wed, 04/11/2012 - 01:32 | Link to Comment msamour
msamour's picture

Moral hazard!!! Unbelievable.

Wed, 04/11/2012 - 01:35 | Link to Comment barliman
barliman's picture

 

Interesting display of ignorance by the early commenters on this one.

DeMarco has been consistently opposed to principal modifications since they:

  • Reward bad behavior - if you DON"T pay your mortgage because (fill in whatever reason you please), we'll force the banks to forgive part of the principal. Which REALLY won't come out of the bank's pocket thanks to all the different programs we have put in place to TAKE the MONEY from the TAXPAYERS.
  • Incentivize more bad behavior - why PAY your mortgage? JUST complain about (fill in whatever reason you please) as an excuse and see if you can get the principal written down on YOUR mortgage
  • All of which leads to more bailouts, more government intervention and eventual market collapse

... so THAT is the OUTCOME all the early commenters WANT? ...

and YOU (collectively speaking) are calling DeMarco a "bastard" and a "douche" ????

Wake up and click your way back over to HuffPo-FairyFartville.

This is ZeroHedge.com not Unicorns&Greenshitsville.com

Bye-bye

barliman

Wed, 04/11/2012 - 02:08 | Link to Comment Donnie Duvanie
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Hey, watch what you say. My unicorn has a multi-colored twisted tusk, and he's sensitive about it.

Wed, 04/11/2012 - 02:44 | Link to Comment barliman
barliman's picture

 

That's cool but if he has green shits, you need to take him to the vet.

barliman

Wed, 04/11/2012 - 02:12 | Link to Comment rumblefish
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i agree with you Barliman.

 

 

 

 

Wed, 04/11/2012 - 02:14 | Link to Comment Ms. Erable
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Oh, that's right - moral hazard only applies to the peons. When Too Big to Jail organizations slough off their toxic crap onto the public sector to save their own asses, it's not considered moral hazard - just business as usual.

 

Wed, 04/11/2012 - 02:42 | Link to Comment barliman
barliman's picture

 

Regardless of WHO sloughs "their toxic crap onto the public sector to save their own asses" they are still a DOUCHE !!!!

Individual, corporate or enabling politician or academic appointee - ALL are POND SCUM

So - just to be clear - YOU ARE supporting the idea that the mistakes people make are NOT THEIR RESPONSIBILITY but must be carried by OTHERS WHO DID NOTHING WRONG ???

barliman

Wed, 04/11/2012 - 03:01 | Link to Comment Ms. Erable
Ms. Erable's picture

Nope. Just pointing out the blatant hypocrisy in "Mr. Consistent" denying to one class of persons that which has already been granted to another class of persons. I think everyone should suffer for their own mistakes - including and especially the corporate persons whose losses I am currently (and will be, for the rest of my natural life) backstopping with my tax dollars.

So - just to be clear - YOU ARE supporting the idea that a two-tiered system of laws, justice, and legal exceptionalism for the politically connected is a GOOD THING for the financial health of EVERYONE in the nation?

Wed, 04/11/2012 - 03:15 | Link to Comment UP Forester
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Didn't you listen to TOTUS today?  Those aren't YOUR tax dollars, they're the governments, and they'll keep 'em if they want to.

Wed, 04/11/2012 - 03:19 | Link to Comment barliman
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Nope ... and if you had been reading the multiple posts on ZH regarding DeMarco you would know he isn't either.

He has been the target of every SCUMBAG BAILOUT SUPPORTER in Washington, D.C. including BAHNEY FWANK, Pelosi and Reid who have tried everything they can to get him replaced.

REALITY - stop by and join in some time.

barliman

Wed, 04/11/2012 - 03:34 | Link to Comment Ms. Erable
Ms. Erable's picture

I guess you missed the point - the moral hazard horse left the barn going on 4 years ago. THAT's reality. Wake me when DeMarco claws back my money and reconveys the garbage back to its points of origin OR begins the write-downs. Until then, he's just another hypocritical bullshit artist.

Wed, 04/11/2012 - 03:52 | Link to Comment barliman
barliman's picture

 

GOT IT

Ignorance uber alles - if it doesn't fit my world view. It's wrong.

MORAL HAZARD - don't have to worry, it was ALL handed out 4 years ago - there is NO MORE risk of it happening again

Write Downs - the defintion of Moral Hazard are NOT moral hazard because YOU want it and therefore IT MUST BE GOOD\

DeMarco didn't lose your money - you did, you self absorbed twit.

barliman

Wed, 04/11/2012 - 06:39 | Link to Comment jeff montanye
jeff montanye's picture

you are intentionally misunderstanding ms. erable.  she (?) says the banksters ALREADY got theirs and in spades.  moral hazard ain't the problem.  it's WHOSE moral hazard.  in olden times all would have gone bankrupt and a restart would be possible.  now we have bank bondholders protected from even a dime of loss and criminal management protected from prosecution while, at the margin, cheated homeowners are required to pay every cent of their debt.  not only is this unequal treatment before the law, it prevents organic recovery (see japan 1989 to today).  not to mention the debt slaves of credit cards and student loans that cannot be discharged even in bankruptcy.  

it's no good to say you don't agree that either the rich or the poor should be bailed out when the rich already have.  your view has been made obsolete by reality and you must address it.  and ad hominem is the weakest of arguments.

Wed, 04/11/2012 - 10:38 | Link to Comment barliman
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I never intentionally misunderstand a moron - or in this case Ms. Erable.

I don't give a shit WHO ALREADY GOT THEIRS

I DESPISE EVERYONE WHO THINKS THEY ARE NOT RESPONSIBLE FOR THEIR ACTIONS and are thereby ENTITLED to their own TAXPAYER FUNDED BAILOUT.

I also DESPISE the practitioners of MORAL EQUIVALENCE

Time to face facts, Jeff.  The bank bondholders who think they are going to come out of this whole are going to find out they are monumentally WRONG

NOTHING HAS BEEN SAVED - the end result will still be BANKRUPT BANKS that will now take down the nations that bailed them out.

NO ONE is going to get OUT FROM UNDER or BE FORGIVEN THE DEBT they took on of their OWN FREE WILL

IF they made themselves debt slaves by paying for OVERPRICED EDUCATION or buying THREE iPADS for everyone in the family, their ASS IS STILL GOING BROKE

IF that hurts your feelings - GREAT !!!!      Get your whiny, bitch ass back over to HuffingtonPost!

barliman

Wed, 04/11/2012 - 07:30 | Link to Comment GMadScientist
GMadScientist's picture

You can be against moral hazard as a concept and against differentially applied moral hazard at the same time.

Stop being daft already.

Wed, 04/11/2012 - 10:50 | Link to Comment barliman
barliman's picture

 

Or you can be logically AND morally consistent and want both sides of the equation held to account ...

... and, historically, they always are held to account - doing it my way involves less mass violence ... if you care about that sort of thing.

barliman

Wed, 04/11/2012 - 07:15 | Link to Comment Benjamin Glutton
Benjamin Glutton's picture

a juvenile homophobic and a partisan hack. reality is a scary thing barliman?                                            

 

hilarious.

Wed, 04/11/2012 - 10:53 | Link to Comment barliman
barliman's picture

 

If you are living in a partisan world where YOU don't see those three individuals as primarily responsible for the housing bubble and coming economic collapse ...

... reality is going to have you shitting yourself on a DAILY BASIS.

barliman

Wed, 04/11/2012 - 03:51 | Link to Comment legal eagle
legal eagle's picture

IT IS NOT THAT SIMPLE:

1.  THE BANKS CREATED MERS AND SECURITIZED LOANS -- WHICH MEANT THEY SOLD YOU A LOAN BACKED BY A HOME WITHOUT CLEAR TITLE WHEN YOU DETRIMENTALLY RELIED ON THE BANK AND THE TITLE COMPANY TO ENSURE YOU WOULD HAVE CLEAR TITLE; YOU DID NOT GET WHAT YOU PURCHASED

2. MERS PROCESS INFLATED THE VALUE OF ALL HOMES; YOU PAID MORE THAN YOU SHOULD HAVE BECAUSE OF THE ILLEGAL CONSIRACY TO AVOID RECORDATION LAWS AND INFLATE PRICES - THIS IS WAS A RICO TYPE CONSPIRACY;

3. THE BANKS CANNOT TELL YOU WHO OWNS YOUR NOTE, PROBABLY THE FEDERAL RESERVE AT THIS POINT; YOU ARE PAYING THE WRONG PEOPLE AND YOUR MORTGAGE IS NOT BEING DISCHARGED;

4. IN NO OTHER CASE ARE THE CRIMINALS (BANKS) ALLOWED TO PROFIT FROM AN ILLEGAL ENTERPRISE AT THE EXPENSE OF THE VICTIMS; I.E. BAIL-OUTS FOR THE BANKS NOT THE HOME PURCHASERS WHO ARE NOT "HOME OWNERS" BECAUSE THEY CAN NOT ACHIEVE CLEAR TITLE;

5.  THE LAW WILL NOT REQUIRE YOU TO COMPLETE A CONTRACT EXECUTED IN BAD FAITH, WITH MISREPRESEENTATIONS ON ONE SIDE, WITH CLEAR FRAUD ON ONE SIDE, IN ANY OTHER CIRCCUMSTANCE;

6. YOU CAN SAY YOU ARE BEING RESPONSIBLE BY PAYING THE LOAN, BUT YOU ARE JUST MAINTAINING THE STATUS-QUO OF THIS ILLEGAL ENTERPRISE, YOU ARE NOT BEING RESPONSIBLE TO YOUR FAMILY BECAUSE YOU ARE THROWING AWAY YOUR RESOURCES;

6. I HAVE BEEN TRYING FOR TWO PLUS YEARS TO FIND OUT WHO OWNS MY LOAN, NOBODY KNOWS, AND NO ONE HAS THE NOTE - THAT MEANS MY PAYMENTS ARE BEING SPREAD AROUND LIKE CANDY TO FOLKS WHO ARE NOT ENTITLED TO PAYMENT (THIS SHOULD NOT BE READ WITH A SIGH, BUT SHOULD OUTRAGE EVERYONE WHO THINKS WE LIVE IN A COUNTRY OF LAWS);

7. IF YOU OWNED COMMERCIAL PROPERTY, INSTEAD OF PURPORTEDLY OWNING A "HOME", YOU WOULD NOT MAKE THE PAYMENTS TO PERSONS OTHER THAN THE HOLDER OF THE NOTE IN DUE COURSE, WHY WOULD YOU WHEN IT IS YOUR HOME?

8. IF WE DID NOT LIVE IN A PLANNED ECONOMY, WE WOULD NOT HAVE TO WORRY ABOUT MORAL HAZZARDS, BECAUSE THERE WOULD BE NONE. - THERE WOULD ONLY BE INCENTIVES TO OPERATE IN YOUR OWN BEST INTERESTS AND NOT ACCORDING TO FALSE INCENTIVES ESTABLISHED BY BUREACRATS TO MAKE YOU JUMP THIS WAY OR THAT.

I AM ABSOLUTELY IN FAVOR OF A MORTGAGE PAYMENT BOYCOT.  WHY HAVE AMERICANS BECOME SO PASSIVE, SO UNWILLING TO STAND UP FOR THE RULE OF LAW, SO WILLING TO CEDE POWER TO BANKS AND BUREAUCRATS? 

 

 

 

 

 

Wed, 04/11/2012 - 03:57 | Link to Comment barliman
barliman's picture

 

Normally ... I can get worked up about MERS.

 

but you have the half truth/half fairy tale mix going on - and I won't take the time or energy to differentiate fact from your widlly interspersed fantasy.

 

Breaking chain of title does not absolve any debt - it may make it unsecured under certain circumstances.

 

MERS is the largest, self documented RICO violation ever. I would LOVE to see bankers losing ALL their ill gotten gains ... but the state AG's bent over and took it up the ass t make sure that couldn't happen.

barliman

 

Wed, 04/11/2012 - 04:02 | Link to Comment legal eagle
legal eagle's picture

I agree the debt is still owed, and as soon as the holder in due course steps forward to collect the debt, they should be paid, but not before.

Wed, 04/11/2012 - 07:33 | Link to Comment GMadScientist
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.

Wed, 04/11/2012 - 11:08 | Link to Comment MachoMan
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How can you have detrimentally relied when, at the time you signed the note and mortgage, it was either not yet assigned or the assignment was expressly consented to in the documents?  The issue can best be spotted when looking for damages (not a premature lawsuit)...  for example, those claiming bad title have no damages until a second creditor claims an amount due...  to my knowledge, this does not occur (because despite the documentation being missing, the banks have at least worked things out amongst themselves).  In other words, when you sell your MERS house, the closing agent will pay off your mortgage...  and you will not owe any more money...  the title issue is then moot. 

Wed, 04/11/2012 - 13:39 | Link to Comment legal eagle
legal eagle's picture

DO YOU REALLY THINK HOMEOWNERS HAVE EXPERIENCED NO DAMAGE UNTIL THEY SELL THEIR HOUSE?  WATCH AS THE LAWSUITS INCREASE BY FOLKS WHO BOUGHT FORECLOSED HOMES BUT ARE THEN SUED WHEN THEY RESELL THEM TO NEW BUYERS BECAUSE THEY ARE WARRANTING CLEAR TITLE.  NO, THE DAMAGE HAS BEEN DONE, IT MIGHT NOT HAVE BEEN FULLY EXPERIENCED, BUT THE HOUSING MARKET IS NOT UNDAMAGED FROM THEIR ACTIONS.

Wed, 04/11/2012 - 14:13 | Link to Comment MachoMan
MachoMan's picture

You want to know what happens in the real world when a foreclosure sale is improperly conducted?  The purchaser enters an agreement with the bank (forecloser) to create a unified front against the person seeking to set it aside...  the bank picks up the tab on the legal fees and, if not, the title company does.  If the sale is invalidated, the purchaser collects the sale price from the bank/title company...  and any improvements likely become a lien on the land through the state's betterment statute...  or, alternatively, paid by the bank/title company.  The deadbeat homeowner is then promptly foreclosed upon again and the process repeats (although probably with a higher probability of finality the second time around).

You also have issues of adverse possession...  laches...  sales might be void, but they can also be merely voidable (a divergence of law that baffles me, but still exists)...  aside from legal trump cards existing.  It's not as simple as you're trying to portray.  However, in the end, the law has mechanisms that will not only clear title, but put each and every piece of land to its best use...  just give it a little time.

PS, your #1 is incredibly poorly written given it's broad enough to apply to initial loans, not merely foreclosures.

Wed, 04/11/2012 - 07:25 | Link to Comment GCT
GCT's picture

Yep you need to go thank your Stae AG for screwing the people of your state in this last 25 billion dollar deal.  Foreclosures will begin in earnest this year now the state AGs in conjunction with this administration just screwed homeowners.  That deal gives the banks a green light to foreclose if you signed on the dotted line regardless of the robo signing and other criminal activities.

Like Barliman stated you signed on the dotted line you are responsible for your debt. The banksters are laughing as they again got off easy and knew thihs would have cost alot more if property laws were enforced.     

Wed, 04/11/2012 - 02:05 | Link to Comment Tuffmug
Tuffmug's picture

DeMarco favors the Zombie solution. Do nothing and pretend you will get paid in full some day. Mark to fantasy means you never have to admit you are broke and stuck with millions of homes worth squat. 

Wed, 04/11/2012 - 02:49 | Link to Comment adeptus
adeptus's picture

OT: It's not obvious to me how to submit an article to ZH team, so I'm just posting it here.

I used to think that the reason that my friends and family didn't get it was because economics was "complicated". But this 5 minute video changed my mind.

Look, even a 12 year old gets it! So what's everybody else's excuse?! 

A 12 year old on the Corrupt Canadian Banking System:
http://www.youtube.com/watch?v=axS-QdUkMqk&feature=player_embedded

Please share this everywhere! There's no more excuse for ignorance.

Wed, 04/11/2012 - 03:09 | Link to Comment JaylP6
Wed, 04/11/2012 - 03:46 | Link to Comment Catullus
Catullus's picture

Bailing the banks out was the moral hazard. Too late. They've flipped the meaning of the term to mean a moral hazard on the part of the borrower. This is a dirty trick to flip blame. DC trolls have tremendous contempt for the average person. What they're basically saying is that if they negotiate with the borrowers, then other borrowers will pick up on what they're doing and want to negotiate as well. There's no moral hazard there. All debts are negotiable. It's not a handout to realize a debt is unserviceable. What the fear is that because the government Guarenteed this garbage at par that they'll be the bagholders.

This is the worst of all possible worlds. The instructions to FHFA should be to liquidate the mortgage portfolio, no longer guarentee debt, shut down Fannie and Freddie, default on outstanding Guarentees on an announced date and allow the market to clear. Investors will buy this debt up at something much lower than par and negotiate with people. It's already occurring with non-agency bonds.

A thought: these guys think mortgage revenues are going to be a new form of government revenue. Same with socialization of student loans. The government wants in on the loan origination business.

Wed, 04/11/2012 - 05:08 | Link to Comment obejoyful
obejoyful's picture

I agree bailing out banks was the biggest moral hazard.  But people that bought a house in a extremely obivious housing bubble should not get a pass.  I lost a ton in the internet bubble and learned an invaluable lesson that will last the rest of my life.  I will also pass that lesson on to my kids if I can.  Let us not deprive those that bought a house in the housing bubble of that invaluable lesson. 

Wed, 04/11/2012 - 06:13 | Link to Comment ebworthen
ebworthen's picture

A bubble created by central banks and other banksters for just such a purpose?

Like he said, "Moral hazard?  TOO LATE."

Why haven't you lerned that lesson?

Wed, 04/11/2012 - 07:36 | Link to Comment GMadScientist
GMadScientist's picture

Shouldn't there be TWO parties learning lessons here?

Let us not deprive the OPM-shuffling copuloids that created the housing bubble this invaluable lesson.

 

Wed, 04/11/2012 - 04:14 | Link to Comment Dingleberry
Dingleberry's picture

And ya'll bitchez thought Obama was gonna "pay my mortgage!"

Wed, 04/11/2012 - 07:38 | Link to Comment GMadScientist
GMadScientist's picture

You didn't get your checks this month?

 

Wed, 04/11/2012 - 05:37 | Link to Comment ILikeBoats
ILikeBoats's picture

Forbearance - means kick the can down the road.  Everyone in FedGov must have awesomely detailed thighs at this point from all the can-kicking.  Of course it also protects the banks and allows time for the fake-settlement about fraudclosure to become settled, wouldn't want any Supreme Court challenges to the latest fraud from the combined bank/FedGov swindler cartel to get in the way.

Wed, 04/11/2012 - 06:00 | Link to Comment engineertheeconomy
engineertheeconomy's picture

BUY PHYSICAL GOLD, END THE CENTRAL BANKING SYSTEM

Wed, 04/11/2012 - 06:03 | Link to Comment non_anon
non_anon's picture

Presedential Executive Order before the electon = win!

Wed, 04/11/2012 - 06:09 | Link to Comment ebworthen
ebworthen's picture

I see, bail out the banks, insurance companies, car companies and provide endless liqidity to trading houses but DON'T YOU DARE FORGIVE AN INDIVIDUAL'S DEBT - THAT WOULD BE MORAL HAZARD.

Yeah, right, like moral hazard hasn't already been breeched and burned into everyone's Corzined minds yet.

Dipshits.

Wed, 04/11/2012 - 07:45 | Link to Comment GMadScientist
GMadScientist's picture

Where I once would've recommended mailing in the keys, I know find myself inclined to recommend arson.

 

Wed, 04/11/2012 - 10:26 | Link to Comment entropos
entropos's picture

Bankruptcy. It's not that hard. If you're underwater the sooner you declare or walk away the better. What do the rents look like?
I walked away from my house when I was upside down on it - lived in it mortgage and rent-free for about 8 months before fucking off to rental "you fix this shit when it's broken" land.

What a relief it was.  

Wed, 04/11/2012 - 10:34 | Link to Comment AGuy
AGuy's picture

I think we already have forbearance since a large number of underwater mortgage foreclosures are about 18 months. I think after 6 months with no payment it should easy to determine the final outcome. After six months, the borrower is walking away from an underwater mortgage and no length of delay (unless permanent) is going to get the borrow to repay. Forgiveness isn't going to work unless the mortgage is decreased below the value of the property, If you reduce the mortgage by 10% and the property is 30% overvalued the borrow is still going to walk away.

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