FORECLOSURE PREVENTION PLAN.....

NEW -> Contingent Buyer Assistance Program
<p>It isn't a matter of belief.</p>

<p>It isn't a matter of who was right and who was wrong, unless you were actually defrauded, and I'm willing to entertain the idea that you were defrauded, given what I know about lenders.</p>

<p>I note I offered to do a calculation for you about the 17% and you haven't responded.</p>

<p>I think cram down legislation should be enacted, and there's a good chance it will be enacted.</p>

<p>Obviously, you are very angry about this. We didn't do it.</p>

<p>I repeat, we IHB-ers didn't do it. </p>

<p>I'm interested. Do you think you have even, say, a 1% responsibility for what happened?</p>
 
Remember the plan is not about a presumption of guilt on the part of the brokers producing complicated and confusing documents and managing to fill the majority of subprime loans with people who actually qualified for a 30 fixed with better rates. Regardless of feel-good revenge issues the possibly guilty brokers are now basically broke and there's no blood to be had from that stone. Given the number of people involved in the mortgage broker industry criminal punishment is impossible and not really to the best interest of society - the people involved are generally "normal" and away from the temptations of the brokerage fees an asset to society. The more outrageous frauds can be, and occasionally are, being prosecuted but for the most part we're going to have to let this go.<p>



All this specific plan does is to back out a special exemption from bankruptcy courts granted to mortgage loans over all other loans in a court decision in 1993. The borrowers have to go through bankruptcy, so they certainly get punished. Also, the bankruptcy effectively is just sharing the pain between borrower and lender and both sides have dirty hands with respect to these loans. Innocent people do not have to pay for those bankruptcies. Those who have a problem with the concept of bankruptcy should address that directly, but they should notice that both sides of the great secularist vs. christianist divide we have in American society are for reasonably generous bankruptcy laws, albeit for different reasons.<p>



There is a proposal out (from Dodd) for a bailout of homeowners which will produce the benefits of cramdowns without the costs and stigma of bankruptcy. That's a separate issue though and I for one oppose Dodd's plan while favoring bankruptcy cramdowns. My prime reason is that Dodd's plan creates a huge risk for taxpayers. I also think it's important to change as little as possible to control the problems as big changes done under great pressure frequently have nasty side effects.
 
<p>"You guys can believe all you want but you tell the 600,000+ people who would benefit from this act and are in similar situations that they were wrong and not the banking industry..."</p>

<p>I can't think of a better way to tell the banking industry that THEY were wrong than to have 600,000 + people mail in their keys! I hope you guys do it. Just walk away from it! Screw the banks!</p>

<p>Nothing would return prudent lending measures (i.e., minimum 20% down, 28% DTI, on a 30-year fixed rate mortgage) quicker than this! The deviation from this tried and true requirement caused this mess in the first place.</p>

<p>Please, walk away! Teach the lenders a lesson!</p>
 
<p>"You guys can believe all you want but you tell the 600,000+ people who would benefit from this act and are in similar situations that they were wrong and not the banking industry..."</p>

<p>I'm sure there are at least a few cases where borrowers where actually defrauded. Documents were changed, etc. I'm sure there are a boatload of cases where the borrowers did not READ the documents they signed. There's probably an even bigger boatload of borrowers that didn't understand the documents. And probably even bigger group that just stuck their head and sand and said 'I wanna new home" and "everything will be alright".</p>

<p>The whole system, IMHO, is set up to encourage fraud and swindling by putting people in a pressure situation to take a final set of thick complex documents and sign them or screw up escrow when everything else in their life is in motion around that. The final process of signing papers, IMHO, needs to be changed.</p>

<p>That said, even given the potential fraud, I still come back to the final person that can stop it, the borrower. Whether it's the Alt-A guy doing a Stated Option ARM claiming not to have known but is electively too stupid to figure out that a half a million dollar loan is only costing them $1270 a month isn't quite right or the someone that can't get a credit card is getting loans with no money down for million dollar properties, it's like the couple on the 60 Minutes episode, with the woman saying something to the like of 'when housing is going up that's fine, but it's not anymore, what do you do'</p>

<p>In the end, I call baloney on all the ranting of the borrowers, I still know that the vast majority willingly went along and intentionally did not ask questions because frankly, they did not want to know the truth.</p>

<p> </p>
 
<p>Over 40 million adults choose to smoke in this country. That we would find a small fraction of that number who are too greedy, too lazy, or just plain too stupid to understand the possible outcomes of <em>borrowing hundreds of thousands of dollars</em> is hardly surprising.</p>
 
<p>The last loan that I took out was in late 1994 at 5.675% fixed for 30 years. At that time I had the option of an adjustable starting at 3.5%. Based on being around for a long time it didn't take a lot of common sense to realize that the odds of rates increasing were higher than rates decreasing. Most of the ARMS or Option ARMS were taken out when fixed rates were at record lows which allowed people to buy over their true income level. If rates were at 14-17% then odds would be they would go down based on historical rates.</p>

<p>I do not feel sorry for people who used adjustables to either buy more house than they should have or bet on refis later if the current rates were below 7-9% which is the historical level. My question to them would be to ask if they thought fixed rates were going to 3 or 4%? If they thought that what did they base the thought on? If they didn't think rates would decline then what would be the logical outcome? Rates would increase is the answer.</p>

<p>People need to be responsible for their actions and decisions. People need to read and understand contracts and if they don't then pay a few bucks to a lawyer to explain the ramifications and provide a third party prospective. From the composition of the posts of some of the people complaining about their situations I don't get the feeling that they are uneducated or have a problem with the language. </p>

<p>They made bad decisions and need to deal with the outcome.</p>

<p>Like laywer Liz said, if there was fraud then they have legal recourse. Otherwise suck it up and get on with your life!! </p>

<p>Regards</p>

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tired



I absolutely cannot understand how your loan could have done anything that wasn't spelled out in writing as possible when you signed it. I feel for you, and it sounds as if you mistakenly placed trust in someone you had no business placing trust in. But your loan couldn't have maliciously reset just because it felt like it, and you should not have signed a contract for hundreds of thousands of dollars without knowing darn well what it said.



I understand that you are bitter and unhappy about what happened, but I hope that you can step back at some point, reevaluate what happened, and stop wishing for the government to swoop in and absolve you of responsibility for your mistake. That's not what government is here for. My tax dollars are not for your to stay in a home that you can no longer afford. Sorry. I rent - would I rather own? Hell yes! Is it the government's job to make me a homeowner? NO.



If you loan involved fraud or deception, I hope that you are made whole and the people that did this to you pay.



But if you want a bailout because you took out an ARM, and that ARM did what ARMs tend to do, I don't think that is right. I didn't bet my fortune on the housing market - YOU did. That IS the bet you made, and I highly doubt you would be giving me money for a house if the bet paid off. Taking out an ARM is exactly like making a bet. You lost. It sucks, and I do feel bad for you and everyone else who will lose their homes - but no way in hell should those who didn't make those bets cover your losses.
 
<p>Since I'm the resident ex-special assets person on the board, please allow me to do what I do best - be the big meanie and boil it down with brutal honesty.</p>

<p>When I worked special assets, I saw folks like tired come in all the time. The either were over their head (29 times out of 30) and needed to be liquadated because they lacked the capacity to run a big boy business at a profit, or they knew what was going on and either screwed up or got unlucky on some decision they made (1 of 30). Of the (1 of 30) crew, I could help about 10% of them. Those were the guys who knew they screwed up and had a plan to fix it, and needed my help to buy some time to get it done. The over their head crew were consistantly in denial from front to back, because "it can't be my fault". They always picked somebody to hate on, and it was never themselves.</p>

<p>I foreclosed on every one. I felt bad for about the first five. After that, I realized I was doing the world a favor because somebody needs to be the garbageman, and nobody feels bad for the garbageman.</p>

<p>tired <em>was</em> taken advantage of - <u>because he allowed himself to be taken advantage of.</u> Worse, I think he <strong>wanted </strong>to be taken advantage of. Ever hear that saying "you can't rape the willing"? I know <em>hundreds</em> of people who believed the hype from 2002 all the way till last week in residential. </p>

<p>You either 1) could never afford it and lied to the lender or yourself or 2) could/can afford it and decided you don't want to pay through the nose for something you bought badly. It's called buyers remorse. In any case, tired just got burned and now he's mad at the world because "it can't possibly be my fault". Well, yeah, it can be, and yeah, it <strong>is</strong> your fault. If you aren't qualifed to read your loan docs, you should hire somebody who is to do it for you. Then, if they screw it up, you've got somebody to sue. But you didn't. Because you're part of "it can't be my fault" crew.</p>

<p>Nobody held a gun to your head to sign the papers, and nobody signed a paper stating "I got your back bro". You played a big boy game and lost. Lifes a bitch sometimes, ain't it?</p>

<p> </p>
 
<p>No_Vas</p>

<p>Straight talk for sure. </p>

<p>Two years ago I really wanted a Shelby 500 Gt. There was a high demand and people thought they would increase in value. I wasn't willing to pay MSRP plus 40K to have one. I made a decision to put off my "want to have". They have now dropped 30K.</p>

<p>Lets say I bought one and now on ebay they are selling about 30 grand less. Whos fault would that be? The dealer who got over list price for it or the lender who made the loan or me?</p>

<p>Would the government bail me out because the price fell? What should make the purchase of a house different from a high end car or any other consumer product.</p>

<p>How many homebuyers purchase "ego cars" that depriciate? Do they whine about the built in depreciation? Why then do they feel so wronged because home prices fell?</p>

<p>Tired appears to be smart enough to have read the docs. If not it is his "BAD" as the saying goes. Tired shouldn't blame everyone else in the transaction for his bad decision. if the price went up I wonder if he would have "shared the wealth" with the team? I bet not.</p>

<p>Just a little snarkey and knarley tonight since the NASCAR race is still rain delayed.</p>

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<p>On this topic...</p>

<p>Too bad they didnt' show the original guy's reaction to this rather socalist response...</p>

<p>http://video.msn.com/video.aspx?mkt=en-us&vid=0f94e028-30bc-4451-b237-1039cfd93f7f</p>
 
<p>And since we're dogpiling, let me continue - I'm not that guy, but I might as well be.</p>

<p>You know how many people I know who got busto in the .com bust? A lot. You know how much it hurt me? Zilch. I didn't take the easy candy because I knew it wouldn't last. </p>

<p>If my brother/cousin/uncle/mom was in this perdiciment, I'd say let 'em go busto. I told anyone I could find who'd listen it wouldn't last as early as '03 and everyone thought I was batshit crazy then. I had customers making $9 an hour qualifing for neg am stated income loans for $700K. Some didn't have SSNs!</p>

<p>I'm not looking for an 'attaboy'. I just want to buy a reasonable priced home compared to what I can rent it's equivlent. And until all the dead wood borrowers like tired are pushed out of the homes they shouldn't of bought in the first place, I can't do that.</p>

<p>And that, folks, is the endgame. </p>

<p>XSC, </p>

<p>'Cup race canceled 'till tomorrow. 10am PST start. I'll be working.</p>
 
<p>Funny, I was sure "tired" was a she.</p>

<p>I guess we've driven him/her off. Actually, too bad. I would've liked to really figure out a person like this. Most of my foreclosure clients didn't have toxic mtges, just loans they couldn't afford. Some lost their jobs. Most of lots of equity. Or they thought they did; who knows what anything is worth now? I don't think any of 'em put 100% down. Wait, there's one. Most of them could have refinanced last year.</p>

<p>Most of them could have refinanced 5 years ago. The baby's gone with the bathwater.</p>
 
Awgee, I saw something this morning that I want to make you aware of.





But first of all, I should reiterate something for the sake of clarity. I believe that one possible (even likely) outcome of the housing mess is the onset of deflation. Obviously that would lead to a collapse in commodity prices. In fact, recently I said that if gold looked a little "toppy" and if it closed below $850, I would consider shorting it. Since that time, gold has been on an upward tear.





That all having been said, I saw the following in an article by Tony Crescenzi on Realmoney.com this morning:





<strong> As for the speculative position in gold, data released late Friday by the Commodity Futures Trading Commission show that noncommercial traders increased their collective net long by about 6,000 contracts in the week ended Feb. 19 to a record 212,259 contracts. Longs outnumbered shorts by a 6-to-1 ratio; 251,717 longs vs. 39,458 shorts.</strong>





Though contrarian logic isn't an absolute buy or sell signal, you do have to worry when one side of a trade gets too crowded.
 
<em>" Though contrarian logic isn't an absolute buy or sell signal, you do have to worry when one side of a trade gets too crowded."</em>





Yes, If there are that many traders on one side of a trade, it doesn't take much of a downdraft to start the cascading chain of stoplosses making for a very deep correction. Of course, once all the longs are stopped out, the selling interest would be abated, and it might shoot right back up again. Trading volatility is one thing, but long-term trends are another.





It will be interesting to see how the deflationary pressures of evaporating equity and mortgage losses are offset by the inflationary pressures of low interest rates and a declining currency. I have never seen these two forces come together before, but then again, I was not around for the Great Depression. Let's hope Bernanke, who is a Great Depression scholar, can come up with the right answers. To paraphrase Princess Leia, "Help me Ben Bernanke, you're my only hope."
 
<p>WINEX - The noncommercials are historically wrong about 95% of the time. The commercials are historically right about 95% of the time and the commercials are short gold.</p>

<p>If I was trading, I would sell. I am not trading. At least not for the last few months. My guess is that from here on out there will be $50 to $80 corrections, and I will watch them.</p>

<p>IMO, if short squeeze happens, it will be so brutal and violent on the upside, that I do not want to be sitting on the sidelines without a long positon because I was trying to make a few bucks off the "small" movements.</p>

<p>Deflation is certainly hard on commodities, but at some point gold may become more of a currency than a commodity and what do you think is the most likely Fed response to deflation?</p>
 
"Judge not lest ye also be judged." You all are so sure of yourselves and so eager to point fingers as to who is right and who is wrong and what I might or might not have done. How do you know I didn't try to get my house refinanced in the past 3 years to get out from a high interest rate. Don't condemn someone until you are walking in his shoes.
 
I was under the impression that if a buyer wouldn't be able to afford the home they are in even at the current market price, the bankruptcy judge could just compel them to sell it or let the normal foreclosure process take place. It's like declaring bankruptcy and having a new ferrari. You don't automatically get to keep it.
 
<i>"Don't condemn someone until you are walking in his shoes."</i><p>


Why do you assume we haven't been in those shoes?
 
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