Do you think taxpayer money be used to help delinquent homeowners avoid foreclosure?
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Do you think taxpayer money be used to help delinquent ... - 10/31/2008 1:43:25 PM
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raspberry331
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Sorry,I wasn't quite sure where to post this. Please post it where it needs to go. Thank-you.
Do you think taxpayer money be used to help delinquent homeowners avoid foreclosure?
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 10:15:33 AM
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small_creation
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No, especially if it means we bail out those people who borrowed 125 percent of their new home's purchase price or people who bought more house than their incomes allowed for.
Foolishness should not be rewarded.
j
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 11:09:41 AM
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rcjames
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No way, no how.
Thanks
RC
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Read the first chapter of my latest book here;
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 11:56:59 AM
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mrtigger
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quote:
ORIGINAL: raspberry331
Do you think taxpayer money be used to help delinquent homeowners avoid foreclosure?
I think there needs to be some effort made to help homeowners avoid foreclosure. It should not be a giveaway though. Something like a program to help them refinance into a fixed rate mortgage that they can actually pay. I think that kind of program would be worthwhile. No principal reductions however -- that is a giveaway.
Actually, what we need is more of a stick, instead of a carrot, approach to foreclosures. What the morons in charge don't seem to understand is that right now it is far too easy to "just walk away" from an underwater mortgage. Most mortgages are non-recourse which means the underwater homeowner can escape from their mortgage obligation without any financial penalty -- they just get a foreclosure ding on their credit report. But it costs them nothing in dollars and they actually may come out ahead money wise since they can squat rent free in their house for 6 months or so before they are actually evicted.
It needs to be made very painful in dollars for a homeowner when he gets foreclosed on. We need to motivate homeowners to work very hard to pay the mortgage they accepted and agreed to pay back.
Forgiven mortgage debt used to be taxable as income and that was some financial incentive to avoid default. But early on in this thing the morons in charge decided to change it so that there was no income tax on that forgiven debt. Homeowners then had little financial incentive to avoid defaulting.
Personally, if I was in charge, mortgage debt that is written off at foreclosure would be treated as income to the defaulter and taxed at the special tax rate of 100%. Pay their loan back to the bank or pay it to the government. Either way they should pay back what they borrowed. I assure you that homeowners would then be be working very hard to make their payments.
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 11:58:41 AM
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relady
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quote:
Do you think taxpayer money be used to help delinquent homeowners avoid foreclosure? I think it should be determined on a case by case basis. If people were defrauded by the bank or if they did everything right and are still having problems, I would be ok with it. Every home that gets foreclosed on and sits vacant in a neighborhood decreases home value for everyone in that neighborhood by about 1 to 1.5% right now.
I am certainly not in favor of just a blanket ok for everyone who is in danger of losing their home to get bailed out. But that's not going to happen anyway, so I'm not too concerned about the ones who do get assistance, if that materializes. I do like Obama's idea of a 90 day moratorium on foreclosures just to give everyone some breathing room and time to figure out what to do.
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 12:45:19 PM
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Random
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I like the idea of a "shared appreciation mortgage." The way this works is that mortgages are rewritten at the current market value, but then if the house appreciates from there, the bank rather than the borrower gets to keep the upside.
The bank should get first $ until they are made whole, and then there can be some sharing between the bank and the borrower.
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 4:55:50 PM
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rhippie
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quote:
ORIGINAL: relady
quote:
Do you think taxpayer money be used to help delinquent homeowners avoid foreclosure? I think it should be determined on a case by case basis. If people were defrauded by the bank or if they did everything right and are still having problems, I would be ok with it. Every home that gets foreclosed on and sits vacant in a neighborhood decreases home value for everyone in that neighborhood by about 1 to 1.5% right now.
I am certainly not in favor of just a blanket ok for everyone who is in danger of losing their home to get bailed out. But that's not going to happen anyway, so I'm not too concerned about the ones who do get assistance, if that materializes. I do like Obama's idea of a 90 day moratorium on foreclosures just to give everyone some breathing room and time to figure out what to do.
I could agree with you on this IF (and it's a big IF) those getting the help did not originally borrow more then 80% of the original value of the house when they purchased it. There are way too many people, imo, that bought houses using 80/20 mortgages or even worse borrowed more than the original value of the house....such as those 125% mortgages. These folks were betting that the housing market would continue to climb and they took a risk. They need to live with the consequences of such a foolish risk.
If they had been prudent homeowners and had some of thier own money invested then I am willing to consider helping them depending on the reasons/circumstances for the problems they are having now.
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 4:57:23 PM
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rhippie
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quote:
ORIGINAL: Random
I like the idea of a "shared appreciation mortgage." The way this works is that mortgages are rewritten at the current market value, but then if the house appreciates from there, the bank rather than the borrower gets to keep the upside.
The bank should get first $ until they are made whole, and then there can be some sharing between the bank and the borrower.
If the government (you and I with our tax dollars) are doing the bailing then the government should be the one that gets the reward.
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Stand up for what's right....even if you're standing alone
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 5:31:21 PM
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redeemedsaint
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No, they got themselves into this mess and they bought more house than they could afford. The banks encouraged this by offering no credit checks and no money down. People need to learn how to be responsible instead of finding the easy way out.
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Get off the track cause the freight train is coming - Coach Bobby Lee Duke from Facing the Giants
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 5:54:50 PM
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Random
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From: Zipperhead
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quote:
ORIGINAL: rhippie
If the government (you and I with our tax dollars) are doing the bailing then the government should be the one that gets the reward.
I agree, sorry I wasn't more clear. Whoever is putting up the money to rewrite the mortgage, whether it is a bank on its own, or the government through the bailout, should be the one getting the upside.
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"That which has always been accepted by everyone, everywhere, is almost certain to be false." -- Valery
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 9:05:44 PM
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relady
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quote:
No, they got themselves into this mess and they bought more house than they could afford. The banks encouraged this by offering no credit checks and no money down. People need to learn how to be responsible instead of finding the easy way out.
Not everyone who is in trouble "got themselves into this mess". In some places home values have plummeted so that even people who put up 20% have lost their investment. They did nothing wrong.
I agree that whoever puts up the money/takes the hit on the loan re-write should get made whole when the home sells.
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 9:19:24 PM
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SovereignIsHe
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No... It's no different than covering gambling debts in Vegas...
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Proverbs 12:10 A righteous man regardeth the life of his beast: but the tender mercies of the wicked are cruel.
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 9:26:59 PM
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SovereignIsHe
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quote:
ORIGINAL: relady
Not everyone who is in trouble "got themselves into this mess". In some places home values have plummeted so that even people who put up 20% have lost their investment. They did nothing wrong.
They lost their investment because they don't want to pay the bill... They walk away because it's not in their interest to pay the inflated mortgage... It's a choice... When the appreciation was inflated they didn't squawk...
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John
Proverbs 12:10 A righteous man regardeth the life of his beast: but the tender mercies of the wicked are cruel.
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 9:55:45 PM
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1970rodney
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NO I make responsible decisions,pay my bills on time, work two jobs and have never defaulted in 20years and I have to help someone who makes poor choices, won't work at a pie factory smelling pies & buys big so to look important? How is that fair or right.
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 9:56:08 PM
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colliefan
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quote:
The banks encouraged this by offering no credit checks and no money down.
checking on credit and income is somehow racist. The banks has no option in this mater
quote:
In some places home values have plummeted so that even people who put up 20% have lost their investment
The bottom would have to totally fall out of the market for this to happen. In this case the best option is to stay in the home or find a renter who will pay enough to cover mortgage and taxes. If someone paid this much as a downpayment, odds are good they could find another mortgage. That is unless they maxed out their credit cards buying such things as plasma TVs.
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RE: Do you think taxpayer money be used to help delinqu... - 11/1/2008 10:03:30 PM
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cog41
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No.
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RE: Do you think taxpayer money be used to help delinqu... - 11/2/2008 3:18:01 AM
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47.samuel
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quote:
ORIGINAL: raspberry331
Sorry,I wasn't quite sure where to post this. Please post it where it needs to go. Thank-you.
Do you think taxpayer money be used to help delinquent homeowners avoid foreclosure?
If only it were that simple!
We are talking about a domino effect - millions of foreclosures - declining real estate values - financial institutions going bankrupt - international credit freeze - dramatic declines in the DOW - pension plans collapsing - job losses - etc., etc., etc.
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RE: Do you think taxpayer money be used to help delinqu... - 11/2/2008 9:30:02 AM
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mrtigger
Posts: 319
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quote:
ORIGINAL: Random
I like the idea of a "shared appreciation mortgage." The way this works is that mortgages are rewritten at the current market value, but then if the house appreciates from there, the bank rather than the borrower gets to keep the upside.
The bank should get first $ until they are made whole, and then there can be some sharing between the bank and the borrower.
It's not a bad idea except that it won't work. Even if that program is made available, most underwater homeowners would still default rather than take that bailout:
If mr. underwater homeowner defaults & walks away, he can buy another house at current market value (banks are still happy to make mortgages to these people) and not have to share any future appreciation on his new house. OTH if he accepts that bailout plan, he will get less, of maybe none at all, of the appreciation.
So, even if that plan is in place, it is still best financially for the underwater homeowner to just walk away.
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mr tigger
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RE: Do you think taxpayer money be used to help delinqu... - 11/2/2008 9:34:26 AM
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mrtigger
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quote:
ORIGINAL: SovereignIsHe
quote:
ORIGINAL: relady
Not everyone who is in trouble "got themselves into this mess". In some places home values have plummeted so that even people who put up 20% have lost their investment. They did nothing wrong.
They lost their investment because they don't want to pay the bill... They walk away because it's not in their interest to pay the inflated mortgage... It's a choice... When the appreciation was inflated they didn't squawk...
I agree! They did nothing morally wrong (although they did do something dumb) by buying a house when they did. Their moral wrong comes into play when they try to walk away from it and leave someone else holding the bag for their financial mistake.
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mr tigger
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RE: Do you think taxpayer money be used to help delinqu... - 11/2/2008 10:10:09 AM
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Random
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From: Zipperhead
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quote:
ORIGINAL: mrtigger
It's not a bad idea except that it won't work. Even if that program is made available, most underwater homeowners would still default rather than take that bailout:
If mr. underwater homeowner defaults & walks away, he can buy another house at current market value (banks are still happy to make mortgages to these people) and not have to share any future appreciation on his new house. OTH if he accepts that bailout plan, he will get less, of maybe none at all, of the appreciation.
So, even if that plan is in place, it is still best financially for the underwater homeowner to just walk away.
If Mr. Underwater walks away, he will not get a loan for a new mortgage. In this credit climate, no bank is going to approve him for a mortgage when he just walked away from his old one.
And if he tries to buy the new one first, he probably won't get approved unless his income is high enough to support both mortgages.
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"That which has always been accepted by everyone, everywhere, is almost certain to be false." -- Valery
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RE: Do you think taxpayer money be used to help delinqu... - 11/2/2008 10:10:57 AM
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Random
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P.S. I don't agree with a bailout, my post about shared appreciation mortgages was to highlight something that should be done if we go down that road. But, I'm not sure that we should.
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"That which has always been accepted by everyone, everywhere, is almost certain to be false." -- Valery
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RE: Do you think taxpayer money be used to help delinqu... - 11/2/2008 10:54:22 AM
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relady
Posts: 1210
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From: Greater St. Louis Metro
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quote:
checking on credit and income is somehow racist. The banks has no option in this mater Pure baloney. YES THEY DO. I have no idea where you got this. Banks have ALWAYS had the choice to do that. They have tightened up their underwriting rules now and no laws regarding that have changed. THEY WERE NEVER EVER FORCED TO DISREGARD COMMON SENSE UNDERWRITING RULES. NEVER. But, hey, if it makes you feel better to think they were forced.....be my guest. But you're flat out wrong.
quote:
Their moral wrong comes into play when they try to walk away from it and leave someone else holding the bag for their financial mistake. Again, often the banks leave them no choice. In spite of the "spin" from the banks, they still are VERY difficult to work with and do NOT want to work with the homeowners. Sometimes it's because the servicer of the loan doesn't really own the loan. But I work with a lot of banks and know a lot of GOOD lenders and even lenders are saying the banks are a whole lot at fault for this situation.
quote:
If Mr. Underwater walks away, he will not get a loan for a new mortgage. In this credit climate, no bank is going to approve him for a mortgage when he just walked away from his old one. Absolutely. The old rules, which have become the new rules (LOL) are that you have to be (I think) 4 years out from a foreclosure for FHA and 5 years for a conventional loan. No one is going to get a loan who just walked away from their home a few months ago.
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RE: Do you think taxpayer money be used to help delinqu... - 11/2/2008 11:29:22 AM
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mrtigger
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quote:
ORIGINAL: relady
quote:
If Mr. Underwater walks away, he will not get a loan for a new mortgage. In this credit climate, no bank is going to approve him for a mortgage when he just walked away from his old one. Absolutely. The old rules, which have become the new rules (LOL) are that you have to be (I think) 4 years out from a foreclosure for FHA and 5 years for a conventional loan. No one is going to get a loan who just walked away from their home a few months ago.
Homebuyers are still liars and banks are still believing their lies.
The SOP for defaulting, and yet still being able to get into a new house, is to lie about having a current mortgage obligation and buy your new house before the old one is lost in foreclosure. The foreclosure is not on your record yet so you aren't disqualified from getting the new mortgage. Banks were still falling for these homebuyer schemes as recently as a few months ago.
Strict mortgage checking & qualification would prevent it but I don't think banks have actually changed much how they are doing mortgages.
And even if I'm wrong on that, and you are right, it still is in the best interest for the underwater homeowner to just walk away. Default now, buy 5 years later after the foreclosure expires and the underwater homeowner will still likely obtain appreciation $$ that they would lose out on by taking the bailout.
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RE: Do you think taxpayer money be used to help delinqu... - 11/2/2008 11:33:52 AM
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GregandJenny
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quote:
In some places home values have plummeted so that even people who put up 20% have lost their investment.
So should we do this for people who invested in say stocks who are now worth hardly anything?
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RE: Do you think taxpayer money be used to help delinqu... - 11/2/2008 1:01:43 PM
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SovereignIsHe
Posts: 5921
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quote:
ORIGINAL: mrtigger
So, even if that plan is in place, it is still best financially for the underwater homeowner to just walk away.
Yet, wrong...
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John
Proverbs 12:10 A righteous man regardeth the life of his beast: but the tender mercies of the wicked are cruel.
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