How foolish of me...

[timcsaw]

Tim, I agree with you that this is the case... sometimes. There is difference between needing help for an extended period of time and counting on the help of others as a justificaion for repeating risky behavior.

I think we are in agreement; In short, always willing to help at least once, but not forever.

[jdm61]

Isn't one of that reasons that a settlement was been negotiated that specifically protected the banks from criminal charges from the government?

Now IF that is the case, then it would be another example of our government not following its own laws. For the rest of us, using the threat of criminal action in order to facilitate a settlement of a civil/administrative matter will get YOU prosecuted for a form of extortion.

[ttoney83]

Now IF that is the case, then it would be another example of our government not following its own laws. For the rest of us, using the threat of criminal action in order to facilitate a settlement of a civil/administrative matter will get YOU prosecuted for a form of extortion.

TRUE, and I think that is exactly what is going on. The Financiers own our government and the government does their bidding. Nothing short of a complete removal of all incumbents will even beGIN to have even the HOPE of a change in the status quo.

[ttoney83]

So aren't you actually saying that the regular banks that BOUGHT these mortgages on the secondary market are the people that got ripped off? You have to "own" the mortgage in order to be responsible for "helping" the mortgage holder.I am sure that the major banks listed that actually hold these mortgages sure hoped that the homeowners would pay them. Yes, mortgages get sold, but not ALL of them come from shady mortgage brokers. For example, mine was originally written by Southtrust, which is now part of Wells Fargo, but they sold it to Chase early on, so I never dealt with one of these fly by night brokers.

No, what happened since ALL banks were allowed to participate in the gambling, is that all banks began to participate in the gambling without any concern for responsibility..... GREED was the sole motivater. You are assuming that anyone operating in this "system" was concerned with being "responsible," and you are also assuming that there were any "regular" banks. There could have been some, but most were doing the same things, selling as many mortgages as they possibly could and selling them off so they could sell more, AND in addition, buying up the CDO's and other gambling instruments, in an attempt to make as much profit as they possibly could. Under Glass Steagall this would not, and did not happen. Under Glass Steagall a bank could be EITHer a Commercial Lender, OR an investment banker, not both.

But, your elaboration is not true either; My mortgage was originally with Southland, which was a subsidiary of BofA, but it was sold to another, and then back to BofA. Under this post Glass Steagall paradigm ALL banks were gambling institutions and operated just like the "fly by night" mortgagers..... Even Greenspan said that not even a PhD Mathmetician could determine which securities were good and which were bad. The reason is that no SINGLE individual had any vested interest in any SINGLE mortgage as ALL of these were sliced and diced and mixed and matched with others which were also sliced and diced and mixed and matched to "spread the risk." In other words, a percent of one mortgage would be mixed into a security with a percent of others, including a percent of credit card debt and a percent of studen loan and a percent of auto loan etc... etc...

SO, the REALITY is that NO ONE really cared because ALMOST EVeryone was operating under the delusion that the risk was spread so wide that no one could lose. How wrong they were. A commercial lender MUST NOT be allowed to gamble in the Wall Street Casino with borrower or depositer money; there MUST be a clear consequence to the lender for borrower failure to provide the incentive to thoroughly vett the borrower.

[ttoney83]

Isn't part of the problem that these mortgages generated two different forms of revenue for the banks in the form of mortgage instruments and in the form of a mortgage-backed securities? Closing mortgages, whether they represent "good" or "bad" debt could generate immediate income in the mortgage-backed securities market. That, and the idea that the real state sales boom would go on "forever" was incentive enough to secure exotic mortgages that processor knew the buyer could not afford once the higher mortgage payment rate change kicked in. Racing through and cutting corners in the foreclosure procedure didn't help matter either. This doesn't mean all or even most mortgages closed were of this kind, but it seems there were enough of them. Of course, this doesn't excuse buyers from taking more debt that what they knew they could afford, but it takes two to tango. When one of the two is an expert, the responsibility although shared, falls heavier on the expert.

That is exactly it! When a mortgage was written, it no longer stayed with the mortgager, but was sold off to other banks. This relieved the mortgage underwriters of any risk for defaults, therefore, they sought to create more and sell more off to other banks. These were then passed round and round and there even came a point when these instruments, which were ALREADY leveraged, to be used as collateral to buy MORE....

It is all explained in the FCIC report with a nice 14 page summary known as the Angelides report below.
http://fcic.law.stanford.edu/report

[ttoney83]

But once again, I say that the securities fiasco is unrelated. You know what you are signing when you buy $400,000 home (when you would normally be able to afford $200-250,000 home using a conventional mortgage) on a "no doc" loan the has a balloon or a huge interest rate jump in 5 years. You are expected to pay your mortgage. Likewise, if you are buying crazy, exotic securities like derivatives, you had BETTER be an expert. Say what you want about misleading "The People" but there is a VERy good reason that a very liberal administration has not brought any criminal cases even though many people have been howling for them. They aren't there.

No, you THINK you know what you are signing when you buy a home. You are thinking that things where working like they had under the old paradigm, the paradigm regulated by Glass Steagall. Had I known in 2007 what I know now, I would not have bought a home. What I was thinking then, is exactly what MOST people were thinking; that if I didn't get into the market now there is NO WAY I'll be able to afford even a 600 sq. ft. apartment in another couple years. Now, I'm in a house which, even though I paid less than asking price, and went WELL below what I was qualified for, will take AT LEAST 10 years to break even on.
I'm seriously considering walking away from it. EFF THE BANK! EFF CREDIT!!! Hell, I think it was Lehman Bros. who did exactly that, walked away from a multi million dollar mortgage and moved to a rental, so I would just be following the example of "experts."

CHECK IT OUT! I think ALL people who are underwater should just walk away! BANKSTERS DO IT ALL THE TIME!
http://www.nytimes.com/2010/01/10/ma...OB-wwln-t.html

Such voluntary defaults are a new phenomenon. Time was, Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work. But the housing collapse left 10.7 million families owing more than their homes are worth. So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible?

Businesses — in particular Wall Street banks — make such calculations routinely. Morgan Stanley recently decided to stop making payments on five San Francisco office buildings. A Morgan Stanley fund purchased the buildings at the height of the boom, and their value has plunged. Nobody has said Morgan Stanley is immoral — perhaps because no one assumed it was moral to begin with. But the average American, as if sprung from some Franklinesque mythology, is supposed to honor his debts, or so says the mortgage industry as well as government officials. Former Treasury Secretary Henry M. Paulson Jr. declared that “any homeowner who can afford his mortgage payment but chooses to walk away from an underwater property is simply a speculator — and one who is not honoring his obligation.” (Paulson presumably was not so censorious of speculation during his 32-year career at Goldman Sachs.)

Heck, I would just be following the example of our Capitalist Heros.....Reading that shite, my decision is all but made. I'm done playing the games......

[timcsaw]

No, you THINK you know what you are signing when you buy a home. You are thinking that things where working like they had under the old paradigm, the paradigm regulated by Glass Steagall. Had I known in 2007 what I know now, I would not have bought a home. What I was thinking then, is exactly what MOST people were thinking; that if I didn't get into the market now there is NO WAY I'll be able to afford even a 600 sq. ft. apartment in another couple years. Now, I'm in a house which, even though I paid less than asking price, and went WELL below what I was qualified for, will take AT LEAST 10 years to break even on.
I'm seriously considering walking away from it. EFF THE BANK! EFF CREDIT!!! Hell, I think it was Lehman Bros. who did exactly that, walked away from a multi million dollar mortgage and moved to a rental, so I would just be following the example of "experts."

CHECK IT OUT! I think ALL people who are underwater should just walk away! BANKSTERS DO IT ALL THE TIME!
http://www.nytimes.com/2010/01/10/ma...OB-wwln-t.html



Heck, I would just be following the example of our Capitalist Heros.....Reading that shite, my decision is all but made. I'm done playing the games......

Deed in lieu of foreclosure... but be prepared to pay some hefty taxes for the "income" you will receive as a consequence (not sure if this is also the case with a straight foreclosure, but I wouldn't be surprised if it is).

[ttoney83]

Deed in lieu of foreclosure... but be prepared to pay some hefty taxes for the "income" you will receive as a consequence (not sure if this is also the case with a straight foreclosure, but I wouldn't be surprised if it is).

If I walk I'm not owing SHITE and I aint PAYING shite! There is no income to be had in this case, if I walk, they take the house. I don't give a damn about credit anymore. I'm not doing anything with credit any more.....
Heck, they probably don't even have the actual paper work, the deed to prove they have a legitimate claim on the property. I should challenge them to produce it! That would be sweet to take the property from the theives and punish them for their greed.
I will encourage everyone to walk. Follow the banksters lead and walk away from the bad investment. Hey, that's a catchy phrase that just might catch on. WALK AWAY, WALK AWAY..... Sounds almost Pythonesque.

[timcsaw]

If I walk I'm not owing SHITE and I aint PAYING shite! There is no income to be had in this case, if I walk, they take the house. I don't give a damn about credit anymore. I'm not doing anything with credit any more.....
Heck, they probably don't even have the actual paper work, the deed to prove they have a legitimate claim on the property. I should challenge them to produce it! That would be sweet to take the property from the theives and punish them for their greed.
I will encourage everyone to walk. Follow the banksters lead and walk away from the bad investment. Hey, that's a catchy phrase that just might catch on. WALK AWAY, WALK AWAY..... Sounds almost Pythonesque.

I believe that if you walk, and the bank takes your house, and can only sell it for less than was owed (let's say they sell it for $10,000 less that what you owed), you just made $10k worth of "income" that you will owe taxes on. Sound's weird, but I think that is how it works IIRC. The taxman cometh!

ON EDIT: IIRC, in some states, you may even owe taxes on their sale of your property even if they sell it for more than your loan was for... The IRS can treat forgiven debt as taxable income, subject to regular income tax.

[jdm61]

Deed in lieu of foreclosure is actually a way that you can avoid paying taxes on that "income" that you received by not paying your loan. But that assumes that you and the lender agree to do this.

Deed in lieu of foreclosure... but be prepared to pay some hefty taxes for the "income" you will receive as a consequence (not sure if this is also the case with a straight foreclosure, but I wouldn't be surprised if it is).

[jdm61]

Actually, if you have a mortgage, they for sure have access to the deed. "Mortage" means "dead hand" The "contract" is actually between the lender and the piece of property. When a foreclosure is commenced, the lender is actually suing the piece of dirt, not you directly. That is why you have to sign a separate promissory note which personally obligates you to make the payments.

If I walk I'm not owing SHITE and I aint PAYING shite! There is no income to be had in this case, if I walk, they take the house. I don't give a damn about credit anymore. I'm not doing anything with credit any more.....
Heck, they probably don't even have the actual paper work, the deed to prove they have a legitimate claim on the property. I should challenge them to produce it! That would be sweet to take the property from the theives and punish them for their greed.
I will encourage everyone to walk. Follow the banksters lead and walk away from the bad investment. Hey, that's a catchy phrase that just might catch on. WALK AWAY, WALK AWAY..... Sounds almost Pythonesque.