I know this is SHOCKING INFO but...

[AladainAF]

Many Borrows Re-Default After Mortgage Is Modified - Real Estate * US * News * Story - CNBC.com

O RLY?

How fucking blatantly obvious was this? I mean really. How many homeowners were defaulting because "their loans are skyrocketing in interest"?

Dugan said recent data showed that after three months, nearly 36 percent of borrowers who received restructured mortgages in the first quarter re-defaulted.

The rate of re-default jumped to about 53 percent after six months and 58 percent after eight months, Dugan said, without providing an explanation for the trend.

No shit? These people cannot afford the house. Period. Kick them out, make them get some efficiency apartment. They aren't fit to live in a fucking house. How long is this lunacy going to go on until these asshats figure this out?

[CnCGOD]

Yea this is no shocker, I am quite surprised its not a lot higher...

The question is how did these ppl get loans in the first place? I mean that kind of irresponsibility tends to show through credit ratings and other bad signs before they buy a home.

I would say the blame is on loan brokers who sell loans then misrepresent them to the banks who they sell to... people are of risk to default if they meet certain criteria, you can't base your business model on that risk not coming to fruition./

[Tallyn]

Originally Posted by CnCGOD

I would say the blame is on loan brokers who sell loans then misrepresent them to the banks who they sell to...

To be fair to the brokers, I don't think the banks much cared about the credentials of the borrowers either. When I applied for my mortgage this spring the broker told me, "Standards are tightening; you'll need to provide some proof of income now." The implication is, obviously, that prior to this spring you could say your income was whatever the hell you wanted and they'd take you at your word. The broker didn't care because he gets to take his commission and run and the bank didn't care because home values were going to continue going up forever and they'd still make money even if you defaulted. The latter, of course, didn't happen, and here we are.

[Soriak]

Chances are those houses couldn't have been sold quickly anyway. Might as well try and keep people in their houses, even if the profit on the loan will be less than expected - beats having to sell the house and take a loss.

If they default in 6 months, it's not like the bank has lost anything. They got a few more payments and still get to sell the house.

[Kugbok_Fennin]

I'd be curious to see what the re-structured mortgage looks like. I'm actually doing some loan restructuring right now with a family friend and we have seen a lot of shady paperwork already and we have only been running about two weeks. We have an attorney in office review and basically sign his name to each deal for this exact reason.

[Dr. Funkenstein]

Banks didn't care about who got the loan because they were instantly selling it to someone else at an instant (albeit small) profit. Collecting on the loan was someone else' problem.

Interesting loophole created in 1999 or so.

That's what this credit crisis is: a bunch of packaged loans being traded around that should have never existed in the first place. Once the trading stopped and stock was taken of the resulting debts owned by those who ended up with them, they puked. They're still puking. Damn hangovers.

[Strifen]

Here's a little clip explaining the sub-prime mortgage fiasco. Great watch if you're confused. Really clears things up.

Originally Posted by Dr. Funkenstein

That's what this credit crisis is: a bunch of packaged loans being traded around that should have never existed in the first place. Once the trading stopped and stock was taken of the resulting debts owned by those who ended up with them, they puked. They're still puking. Damn hangovers.

Wall street corruption and sub prime mortgages are an effect, the cause of the credit crisis stems from consumers who are maxed out. Sub-prime mortgages are a last attempt to get as many people to sign that dotted line as possible.

[Mist]

Originally Posted by Tallyn

The broker didn't care because he gets to take his commission and run and the bank didn't care because home values were going to continue going up forever and they'd still make money even if you defaulted. The latter, of course, didn't happen, and here we are.

Actually, the bank didn't care because they were just going to package the loan with other loans and then sell the loans off to another bank.

[Aetos]

Originally Posted by Dr. Funkenstein

Banks didn't care about who got the loan because they were instantly selling it to someone else at an instant (albeit small) profit. Collecting on the loan was someone else' problem.

Interesting loophole created in 1999 or so.

That's what this credit crisis is: a bunch of packaged loans being traded around that should have never existed in the first place. Once the trading stopped and stock was taken of the resulting debts owned by those who ended up with them, they puked. They're still puking. Damn hangovers.

Im curious as to what loophole you are talking about, because most of this has stemmed fromt he 80's

[brekk]

Mortgage restructuring doesn't help people pay it if they just lost their job because companies are cutting jobs.


And for anyone who says this is the borrowers fault for getting into loans they couldn't afford... When a lawyer fails to defend someone, is it the convicted persons fault that they didn't do their own research on the laws? When a doctor tells you what medication you need for a condition and it doesn't help, is it the individuals fault for not doing their own medical research? People become professionals in an industry so that your average person doesn't need to know the in's and out's of everything. People are payed to know their business well and make sound decisions for both their industry and the people doing business with it.

These people are professionals in an industry. The CPA, the banker, the person allowing that loan to go through. They're job is to make sure loans are sound and that they will profit from handing out this loan/mortgage.

And before anyone says "well the bankers are out to make money they don't care about you." I've seen this argument brought up. You're right their bottom line is profit for their business. And they couldn't do that either.

[Aetos]

im sorry brekk but you can't compare them to doctors or lawyers. You don't need to be a fucking mathematician to know you can't afford a $2700 a month mortgage when you are only grossing $3000

Not placing all the blame on the borrowers, but the ignorance of people on all sides. Not everyone deserves to own a house. Just like not everyone deserves to go to college.

[Lyenae]

Aetos just shut your fucking face.

Not everyone deserves to pay retarded bloated, super inflated living costs. However, people need a place to live. A place to live within relative proximity of their job location. Period.

This isn't an issue of 'everyone deserving to own a house.' It's an issue of the market being broken. Renting really isn't any different. You have to be fucking blind if you think housing prices are fair when they are 5-10x the MEDIAN yearly salary. Back in the early 80's, housing prices were only 1.5-2x median yearly salary. Banks wouldn't even give you a mortage if it exceeded salary and a half. My father was pulling down about $22k back in the late 70's as an engineer with a p.Hd at General Electric. Our 2 lot house, about a mile walking distance from the ocean just north of boston, was bought for around $44k. His salary increased to about $80k just as he retired around Y2K. Meanwhile the house's worth rose to a bloated 300k.

The median salary in a town I work at is $38k and the median house price is $198k, There's a fucking problem. Not everyone deserves to own a house is the stupidest fucking thing I've ever heard. Someone with a phd working a fulltime job has to struggle to make housing payments and raise a family? Get the fuck out.

College... is no fucking different. Back in the 60's, 70's, finances NEVER really stopped the majority of people going to college. Early 70's, tuition at BU complete with room/board was 30-40% of median salary per year. Now the shit is 100% of median salary. Why? Who the fuck caused that to happen?

Don't you fucking dare blame the average joe claiming he's ignorant. The market is fucked up.

[Aetos]

Originally Posted by Lyenae

Aetos just shut your fucking face.

Not everyone deserves to pay retarded bloated, super inflated living costs. However, people need a place to live. A place to live within relative proximity of their job location. Period.

This isn't an issue of 'everyone deserving to own a house.' It's an issue of the market being broken. Renting really isn't any different. You have to be fucking blind if you think housing prices are fair when they are 5-10x the MEDIAN yearly salary. Back in the early 80's, housing prices were only 1.5-2x median yearly salary. Banks wouldn't even give you a mortage if it exceeded salary and a half. My father was pulling down about $22k back in the late 70's as an engineer with a p.Hd at General Electric. Our 2 lot house, about a mile walking distance from the ocean just north of boston, was bought for around $44k. His salary increased to about $80k just as he retired around Y2K. Meanwhile the house's worth rose to a bloated 300k.

The median salary in a town I work at is $38k and the median house price is $198k, There's a fucking problem. Not everyone deserves to own a house is the stupidest fucking thing I've ever heard. Someone with a phd working a fulltime job has to struggle to make housing payments and raise a family? Get the fuck out.

College... is no fucking different. Back in the 60's, 70's, finances NEVER really stopped the majority of people going to college. Early 70's, tuition at BU complete with room/board was 30-40% of median salary per year. Now the shit is 100% of median salary. Why? Who the fuck caused that to happen?

Don't you fucking dare blame the average joe claiming he's ignorant. The market is fucked up.

You can keep your little personal stories to yourself, because I dont think any one really cares. Not to mention the fact that your post shows you have no idea about what causes prices to be what they are. But maybe with your strategy of bitch and moan they will come down just for you. Untill then I continue to place equal blame on the average joe.

[Cynno]

Originally Posted by AladainAF

Many Borrows Re-Default After Mortgage Is Modified - Real Estate * US * News * Story - CNBC.com

O RLY?

How fucking blatantly obvious was this? I mean really. How many homeowners were defaulting because "their loans are skyrocketing in interest"?



No shit? These people cannot afford the house. Period. Kick them out, make them get some efficiency apartment. They aren't fit to live in a fucking house. How long is this lunacy going to go on until these asshats figure this out?

You sir, are fucking retarded.

[CnCGOD]

I love how believing in personal responsibility in fiscal situations makes you retarded now, the delusions of the left are just... epic. If you buy a house and can't make the payments that is bad. If you buy a house, cant make the payments, the government helps you by forcing banks to renegotiate with you, THEN YOU STILL FUCKING MISS PAYMENTS... that is epic.