Mortgage problems? Don't look for help from your bank

This is a discussion on Mortgage problems? Don't look for help from your bank within the Off Topic & Humor Discussion forums, part of the The Back Porch category; kare11.com | Twin Cities, MN | <i>Encore Extra:</i> Banks slow to respond to homeowners in trouble this is a 5 min video everybody should see. ...

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    Senior Member Array Maverickx50's Avatar
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    Mortgage problems? Don't look for help from your bank

    kare11.com | Twin Cities, MN | <i>Encore Extra:</i> Banks slow to respond to homeowners in trouble

    this is a 5 min video everybody should see. Yes, It's about Minnesota/twin cities but It surly would fit most any community of size in the USA


    Just more fall out from our big government bail out plan. Goes to show that throwing money at problems are just as likely to create more problems than fix anything.
    I carry to protect myself and my loved ones from the BG's. Not to solve societies problems. That said: if more carried the deterrent would only have a positive overall effect on those problems.

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    VIP Member Array farronwolf's Avatar
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    Ok, a guy wants to sell his condo for twice as much as the neighbors are selling theirs for, and a woman bought a home that was overpriced and now is having trouble making her payment because she went with an ARM instead of a fixed mortgage. Those are the banks fault, why?

    Why the banks aren't responding to these particular customers I have no idea, but if the bank looses money on the deals, then I guess their stockholders will pay a price for it.
    Just remember that shot placement is much more important with what you carry than how big a bang you get with each trigger pull.
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    Senior Member Array Maverickx50's Avatar
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    Quote Originally Posted by farronwolf View Post
    Why the banks aren't responding to these particular customers I have no idea, but if the bank looses money on the deals, then I guess their stockholders will pay a price for it.
    I agree completely. The only issue I have with this comment is that after all the bail outs "we" you and I are now the owners if not the stock holders.
    I carry to protect myself and my loved ones from the BG's. Not to solve societies problems. That said: if more carried the deterrent would only have a positive overall effect on those problems.

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    VIP Member Array farronwolf's Avatar
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    That depends on which bank they have the mortgage with. Only a few banks got TARP money or are getting anything from the stimulus package. I don't recall from the video if they ever named the banks that were involved.

    All of the spending is going to cost the taxpayer, I think we all will agree on that point.
    Just remember that shot placement is much more important with what you carry than how big a bang you get with each trigger pull.
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    Losses are passed along

    Quote Originally Posted by farronwolf View Post
    Why the banks aren't responding to these particular customers I have no idea, but if the bank looses money on the deals, then I guess their stockholders will pay a price for it.
    While some banks and probably lots of credit unions hold the mortgages they originate, most of these papers are packed and resold in the bond market. The bank itself (and certainly not the stockholders of the bank) does not eat the loss if they have had a market for reselling the original loan. The bond buyer is the one who eats the loss. That is why so many institutions have been able to act irresponsibly. ANd it is one reason why the insurer of the bonds has eaten dirt.

    One of the underlying causes making the bailout necessary is that there is now no secondary market into which the loans can be sold because there is no functioning mechanism for valuing the derivatives that must be created for their resale.

    Geithner is trying desperately to re-create a secondary market that would do two things: 1) take the "bad loans"* off the balance sheets of the large financial institutions; 2) establish market value for existing bonds.

    We had all better hope Geithner succeeds.

    With regard to the comment about not understanding why the banks won't work with the customer, one possible answer is that they are out of the loop, having sold the loan on the previously existing open market. The holder of the note (who may be many times removed from the initial transaction) expects to be paid.
    __________________________________________________ ____
    * Fear has caused the market value of mortgage backed derivatives to fall very far
    below the true value of the underlying assets. That is one reason why some
    accounting gurus want to do away with market to market accounting (not a good idea IMO), but also why Uncle stands to possibly gain quite a bit of money by purchasing
    these depressed assets.

    Long term, Uncle could turn out smelling like a rose.
    E.g., A bond representing a market basket of mortgages originated at 1 K. Now, if the risk of mortgage default were evenly distributed, even a 10% foreclosure rate could not drive the bond price below $900.00. Yet, these things are selling at fire sale prices in the $200-300 range because as a potential buyer, you can't determine whether any particular bond has no mortgages that will default, or 80% of mortgages that will default. Uncle can with private investors acquire these things at fire sale prices, clear the balance sheets at the financial institutions, and make money in the long run.

    There is a lot of dumping on Geithner that comes from not understanding the game plan.

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    I can relate to the first guy. We moved due to a job transfer in Feb 08. Our house was for sale about a year before my transfer date and it stayed for sale for a full year after we moved. Two years folks. I paid double mortgages for a full year because of the housing market collapse. We owned our home for six years total. We kept it up well and even did a full kitchen remodel and a bath remodel as well. Our house appraised for 153K after the bubble burst (It had been much higher) and we sold it for 130K. Why? Because of all the foreclosures dropping the value of all homes out there. There is no way to compete with a homes for half price fire sale. We lost about 30K over all and for a whole year my family lived on mac and cheese and the like. I called the bank a couple of times and tried to rework our interest rate on the second house but they didn't care.

    In the end it's always the working man who gets screwed, and in the end I just kept paying and paying. Thankfully I have a good job, and thankfully our house sold last month almost a year to the day after we moved. We had to take a loan out on a previously paid off car just to have the money to pay at our closing. It will take us about 4 years to dig out of the hole that we are now in.

    I sometimes wish that my conscience would have let me just walk away from that house, but alas as a Christian I just had to deal with it. And I will be continuing to deal with it for years to come.
    Two roads diverged in a wood, and Ió
    I took the one less traveled by,
    And that has made all the difference.

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    With considerable concern and sympathy, but...

    Quote Originally Posted by atctimmy View Post
    I can relate to the first guy. We moved due to a job transfer in Feb 08. Our house was for sale about a year before my transfer date and it stayed for sale for a full year after we moved. Two years folks. I paid double mortgages for a full year because of the housing market collapse. We owned our home for six years total. We kept it up well and even did a full kitchen remodel and a bath remodel as well. Our house appraised for 153K after the bubble burst (It had been much higher) and we sold it for 130K. Why? Because of all the foreclosures dropping the value of all homes out there. There is no way to compete with a homes for half price fire sale. We lost about 30K over all and for a whole year my family lived on mac and cheese and the like. I called the bank a couple of times and tried to rework our interest rate on the second house but they didn't care.

    In the end it's always the working man who gets screwed, and in the end I just kept paying and paying. Thankfully I have a good job, and thankfully our house sold last month almost a year to the day after we moved. We had to take a loan out on a previously paid off car just to have the money to pay at our closing. It will take us about 4 years to dig out of the hole that we are now in.

    I sometimes wish that my conscience would have let me just walk away from that house, but alas as a Christian I just had to deal with it. And I will be continuing to deal with it for years to come.
    While I have considerable concern and sympathy, and admiration for your stick with it attitude, look at it from the other side.

    The guy who bought your promise to pay him back has a right to have that promise kept.

    He didn't create the bubble or the stampede to get out from under the bubble. He didn't cause you to need to move at the wrong time with regard to sale price of your home.

    I do agree with you that it is the always the working man who gets screwed, and that is an aspect of our present economic system which needs drastic modification. Ordinary consumers (ordinary people) need much more protection from the sharpies and the wise guys, and the very powerful elites who rig the game.

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    Quote Originally Posted by Hopyard View Post
    The guy who bought your promise to pay him back has a right to have that promise kept.

    He didn't create the bubble or the stampede to get out from under the bubble. He didn't cause you to need to move at the wrong time with regard to sale price of your home.

    I do agree with you that it is the always the working man who gets screwed, and that is an aspect of our present economic system which needs drastic modification. Ordinary consumers (ordinary people) need much more protection from the sharpies and the wise guys, and the very powerful elites who rig the game.
    Maybe not my guy as an individual, but the banking industry as a whole most certainly is to blame. They did create the bubble by writing motrgages on falsly inflated homes. It doesn't take a genious to realize that a person making 40K a year cannot afford a 300k home. The bankers knew it couldn't work in the long run! The banking industry was running a get rich quick scheme and after it fell apart we the working man and we the taxpayer are on the hook to pay the bill. The bankers still have their millions they made while we, Joe nobody, are still out of his or her life savings.
    Two roads diverged in a wood, and Ió
    I took the one less traveled by,
    And that has made all the difference.

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    It also doesn't take a genious to know he/she can't afford a $300k house making 40k a year.

    The government has as much culpability as the banks, since they encouraged the bad loans, interfering with the market, by threatening CRA lawsuits and also by increasing the federal insurance on the loans. If you knew Uncle Sam was going to cover any losses you incur, why wouldn't you make as many bad loans as you possily could?

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    Don't understand this comment

    Quote Originally Posted by alfack View Post
    It also doesn't take a genious to know he/she can't afford a $300k house making 40k a year.

    The government has as much culpability as the banks,... by increasing the federal insurance on the loans. If you knew Uncle Sam was going to cover any losses you incur, why wouldn't you make as many bad loans as you possily could?
    I don't know what that is referring to. I know about private mortgage insurance. I know that too many loans were made without it, that the companies which issued the insurance issued bogus insurance, but I didn't think Uncle was in the insurance business until after it was forced to acquire AIG.

    At least a portion of the current problem, maybe a big portion, is due to liar loans. You know, the family with a 70K income misrepresenting it as 120K so that they qualify---and often with help from unscrupulous mortgage brokers. One of many things which went wrong is that banks lost control of the mortgage origination business. That business instead went to unlicensed and unregulated mortgage originators who had no incentive to check on a borrower's real ability to repay the loan. They then, after originating the loan, sold it on the bond market to unsuspecting purchasers who looked at the phony ratings issued and thought they were buying a quality bond.

    There is plenty of blame to go around. The issue now, how to fix the dang mess and whether or not it can even be fixed.

    At least some progress seems to be being made, and it is possible that 2 years from now we will all be amazed at how well things actually turned out. Will there be bodies and victims. Of course. And I'm all for a good hanging if we can identify real people who needs it.
    And that includes the folks who lied to get their loans.

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    Restricted Member Array SelfDefense's Avatar
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    I'm really tired hearing the whining about it's the bank's fault. It's the government's fault. It's always someone else's fault. People want to spread the blame around but it is a very easy issue. The blame resides on the individuals that did not pay their mortgage. Period.

    It is also disturbing when people think their home buying is an 'investment.' When you buy shoes, is that an investment? Is the new mattress for your bed an investment? This is the language Obama is now using to justify out of control spending. It is an investment.

    Let me provide a clue. When you buy a house you are SPENDING. Can't afford it? Don't buy it.

    Stealing is a criminal offense. If you sign a contract, borrow money, and do not fulfill your obligation then you have stolen money and belong in jail. It is no different than burglary or what Madoff did.

    It we mandated personal responsibility and penalized violating monetary contracts then we would not be in this financial faux crisis.

    I have no sympathy for anyone complaining that their house is not 'worth' what they paid for it. My dirty socks are not worth what I paid for them either.

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    Distinguished Member Array Squawker's Avatar
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    I don't have a very high opinion of mortgage companies, at least after my experience in 2007. I'm sure that there are probably a few decent ones out there, I just haven't found them. I was out of work for part of 2006, then worked for a company where the owner skipped the country, owing me $8K salary. During this time, we moved, with my wife paying cash for a new house (our finances are totally separate). I was having mortgage problems with my house, given the loss of income. I wanted to rent it, but it needed about $20K worth of work (courtesy of some “friends” of my wife, who I let stay there because they were going to be homeless, and they trashed the place). I started working a new job, but there were problems there. I was then hospitalized, first for 2 weeks, then 2 additional tines over 2 months, the last time I was unconscious for 2 days. During the time that I was unconscious, the mortgage company called, threatening foreclosure. My wife talked to them, and was going to send them a check. They told her that they wouldn't accept a check from her, since she wasn't on the mortgage. After I was released from the hospital, I ended up filing bankruptcy. That bought me some time to start making payments. I put the house up for sale. I called them before setting a price, and was given the payoff of $197,000, and I set the sale price accordingly. My agent found a buyer quickly. As we were to getting ready to close, I received a statement from the mortgage company, saying that I owed $227,000! The sales price only gave me a few thousand over what I thought was the payoff, meaning that I would have to come up with thousands of dollars just to sell it. I contacted the company, and tried to get them to take what I was originally told. They wouldn't even talk to me about a short sale as long as I was in bankruptcy, but if I took the house out of bankruptcy, there was no guarantee that they would accept the short sale, and I would be screwed. So, I couldn't close, and lost the sale. I raised the price, but the house wouldn't sell, and after 6 months, I gave up.
    Well, I found a decent job, and was about to start making monthly payments (the arrears were covered in my bankruptcy payments). Just as I was about to send them a check, I got a notice from them saying that they were raising my monthly payment by $500! Well, I was furious. Also, I just couldn't afford it. Since these people would do absolutely nothing to help me, and I wasn't going to be homeless, I told them to stick it, and let them take the house. It took them many months to sell it, and I know that they didn't get anywhere near what they would have gotten if they had taken the short sale.
    I wouldn't feel so badly toward them if they had just tried to help out. Not wanting to take money from my wife when I was unconscious, and she didn't know if I would live or die, giving me the wrong payoff and then not be willing to at least discuss a short sale, just ticked me off.

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    Quote Originally Posted by SelfDefense View Post
    I'm really tired hearing the whining about it's the bank's fault. It's the government's fault. It's always someone else's fault. People want to spread the blame around but it is a very easy issue.
    I agree with you to some extent......Methinks there is plenty of blame to go around to all participants, focusing on the Home Buyers and Original Borrowers who defaulted or walked after ending up in too much house (payment).......To wit....

    Banks and mortgage companies that started racing to lend more money on lower standards to feed the insatiable beast called Earnings per Share (quarterly, mind you) and their CRA ratings;

    The mortgage brokers with more loan demand from the upstream purchasers and additional incentives to "produce" more loans;

    Mortgage Companies feeding the beast of "Securitization" to generate more fees and more income;

    Wall Street, Fannie and Freddie Securitizing mortgages to feed the beast of the CDO/CMO/Bond market appetite and the investors that wanted more and more of the same;

    The PMI Insurance Companies that failed their basic underwriting standards due to earnings and fee pressures from investors;

    The Credit Default Swap houses (AIG included that thought they were hedging their risks);

    The investors that bought the CMO/CDO's and Bonds paying the high rates with good ratings set by Moody's and S&P and did not understand what they bought (poor due diligence!);

    The Feds that pushed Fannie and Freddie to lend more to historically underserved markets, and then pushed them to buy more of the CDO's/CMO's to support the markets;

    The Fed that kept rates low for extended periods of time (irrational exuberance);

    The Builders building the houses that set up Mortgage Companies to finance the sale of the houses; and the;

    The buyers that bought them using loans they didn't understand and probably couldn't afford them, or loans that required a "Perfect Environment" to actually work.........

    Now, when housing Appreciates for Years on End, the appreciation hides many sins! Get in trouble, sell it (and make money);

    Housing appreciates, refi and like a drunk on shore leave, spend on cars, vacations, college, drugs, alcohol, stupid crap, and the Appreciation saves your bacon;

    The End of Appreciation, the End of Musical Chairs! Regional Bubble - we've survived that. Muli-Regions, gets tough, maybe tougher.....nationally....the Music Ends, and some of the Chairs are Missing!

    Enough blame to go around in spades.........

    But I agree with you, SD. Really. It all starts with personal responsibility.

    At all levels, and less Greed

    Timmy G is just trying to get these markets functioning again, poor fella. Maybe he should have paid his taxes:

    http://www.youtube.com/watch?v=MAdJL...e=channel_page

    Edited to Add:

    A lot of "Community Banks" own their own loans, and didn't securitize them. If you are in default, or close, talk to them first to see if they are amenable to work out terms. They want to get paid and maximize the earnings, and don't answer to anyone else except the regulators and their Board of Directors.
    Last edited by Rock and Glock; March 29th, 2009 at 09:53 PM.
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    Ticked off and rightfully so

    Quote Originally Posted by Squawker View Post
    I wouldn't feel so badly toward them if they had just tried to help out. Not wanting to take money from my wife when I was unconscious, and she didn't know if I would live or die, giving me the wrong payoff and then not be willing to at least discuss a short sale, just ticked me off.
    What a bunch. They could have had the money in hand and were too stupid to figure that part out.

    Amazing.

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    It sure is frustrating. I never missed a payment but without some timely (read Godly) things happening we would have been in big trouble. We ate allot of wild game for dinner last year.

    To SD: The problem doesn't just affect the losers who were being stupid, it affects us all. I bought a regular single family home in a nice area and owned it for six years. I didn't buy in a trendy or over-inflated area. In fact my area was well under national averages. I had a 2200 sq ft home with 3 BRs 2.5 BAs and hardwood throughout the place on a seven acre lot. I paid only 139K for it. Not bad huh? The reason I sold was due to a job transfer, not on a whim or anything like that. The problem is that even though my house was great and everyone who came through it loved it, there are too many cheap houses out there. So in the end I got crushed. I lost all my savings and then some. What makes me mad is the bankers still get to keep their millions they got to pocket during the "good times".

    So while there are plenty of folks out there who are idiots that like to play with fire, there are some (like me) who do all the right things and still get burned.
    Two roads diverged in a wood, and Ió
    I took the one less traveled by,
    And that has made all the difference.

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