Mortgage interest rates at an all time low...and no one can refinance.

[Butters 0]

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If you don't want to feel bad for the banks, I suggest you also don't feel bad for a large number of homeowners that were drinking the koolaide along with the bankers.

I don't feel bad for those that bought houses they couldn't afford.

"That looks dangerous." Leopold Stotch

[shah269 0]

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Quote

If you don't want to feel bad for the banks, I suggest you also don't feel bad for a large number of homeowners that were drinking the koolaide along with the bankers.

I don't feel bad for those that bought houses they couldn't afford.

+1
I've been away from this a bit due to work and what not.
But yes, if you want to have a civil discussion you need to step away from two things.
1) predatory lending, and we all know who those guys and gals were. Hell with my income and perfect 800 credit score I had to FIGHT to get a traditional loan and not an interest only loan when I bought my condo. Why? There was more money to be made in those interest only loans and I am educated enough to read the fine print and insisted on a NORMAL TRADITIONAL loan.

2) Those who falsified their information or were just too dumb and did buy a house too big for their income. This is nothing new, has occurred in the past and will most likely happen in the future.

Let's for a moment do the impossible in this thread. No pissing matches no name calling and none of this usual shit we see our elected officials do every day they are in office.
Let us be civil.

We have a real problem in our hands, let's take me for example. I'm "average" and "responsible". I have very good credit and take care of my bills. So let's start assuming a good number of people are like me. They keep their credit card bills to a minimum and don't go out buying new cars or homes too big for their wallets.

The long and short of it is that I would love to be able to play on an even playing field with the big banks. Why can they walk away or renegotiate their debts and I have to "live with it?"

I pay my loan on time, I have a stable job and am a low credit risk. Yet in the day of 4% interest I'm stuck with one loan at 6.25% and another at 8.7% (I utilized an 80/20 loan to procure my condo for I did not have $60k cash on hand as called for).

I've paid down my debt and held my end of the deal. My two loans were sold off 5 times! they stated off under one lending institution but are not owned by two different banks. As such now I can no longer bundle them together. I have to deal with each bank on their own terms which is so much fun.

Of the people I know, and this is just my circle of friends who bought about the same time I have, we are all "stuck" in the same situation. We are stuck with higher interest rates and can't renegotiate a lower rate for we either make too much money or our value of our property is well below what we owe.

And why would someone want to renegotiate?
Let's talk BASIC economics for a second. And not trickle down or any other fancy theory. BASIC ECONOMICS states an economy grows when money changes hands. And in our services based economy the key to growth is the circulation of capital. And i'm not talking bank to bank, those guys were saved by TARP. I'm talking from Joe to Jane and from Jane to Jack and so on and so on. That's what creates jobs, that's what grows our economy.

Yet when our capital is effectively held hostage by the big banks in agreements in negative equity properties how do we seriously expect our economy to recover let alone grow?

This is not a Republican issue nor a Democrat issue. And if you want to talk about that, google TARP and figure out who signed it into bill and then google all the stuff Clinton did when he was in charge. A pox on both their homes!

THIS IS BASIC ECONOMICS!
The system is BROKEN!

Large institutions are FLUSH with liquid assets while your average person, who is the economic engine of our economy is paying back a loan on a property that has no equity.

No bank would do this, and many haven't! they simply return the keys and call the loss on their taxes and keep going as if nothing happened. Yet your average 2.5kids and a minivan family.....they are stuck throwing money into an black hole. When they could have been taking that money and utilizing it to either lower their over all debt and or utilizing it to procure goods and services which are PROVEN practices to grow the economy.

So the question is, when will the system fall apart?
Yes one person sending back their keys and telling the big bank to go pound sand is nothing, but tens of thousands doing the same? And not every state has a governor that is in bed with big banks such as what we have in NJ so this is not an out of this world problem.

Think about it, the nation, our society, here we sit arguing about guns and gays and god when in reality above us hangs the Sword of Damocles held up by indebted middle class who at any moment may simply wake up from their coma and say "no more".

Then again who are we kidding here, your average middle class comatose citizen is as intelligent as a boiled carrot.

Thus the question again, what is to be done?
Most loans today are backed by the treasure of the US. As such perhaps the treasury needs to perhaps flex a bit of it's muscle and grow a bit of a spine and provide a mechanism by which those who have demonstrated fiscal discipline and have demonstrated intent of continued payment be provided a mechanism by which their outstanding debts can be reconsidered. At which point perhaps capital can begin to flow again and our economy would grow.

YES the banks would loose potential income, but then again as it has become self evident with out TARP most of these banks would have either gone under or have been unable to provide lucrative compensation. As such, let's just call it "Peter paying Paul"

Then again who are we kidding here.....that also will never happen. As such, as Roam fell and as the English Empire fell....so shall we.

And that will be a truly sad day.

Life through good thoughts, good words, and good deeds is necessary to ensure happiness and to keep chaos at bay.

The only thing that falls from the sky is birdshit and fools!

[chutem 0]

Your ideas would most likely be better received if you did not have such a big stake in this outside of the benefits to the rest of society. I have to wonder if you would think differently of this if you had rented untill the prices went down, bought low with a good interest rate and were listening to someone else suggest the same thing?

I'm not sure the idea of enabling folks to free up some money monthly so they can take on more debt is really a good thing. I'm just an uneducated small business owner so it is quite possible I'm being short sighted about this.

James

[Belgian_Draft 0]

I know several people who have refinanced homes they bought between 4 and 7 years ago. They were smart enough to pay a realistic price for their homes and didn't allow themselves to get caught up in the artificially inflated real estate market.

HAMMER:
Originally employed as a weapon of war, the hammer nowadays is used as a
kind of divining rod to locate the most expensive parts adjacent the
object we are trying to hit.

[billvon 2,426]

>1) predatory lending, and we all know who those guys and gals were. Hell with my
>income and perfect 800 credit score I had to FIGHT to get a traditional loan and not an
>interest only loan when I bought my condo.

Hmm. I had no problem at all getting a traditional loan for a second house about six months ago. It's available; you just have to ask for it.

>I'm "average" and "responsible". I have very good credit and take care of my bills. So
>let's start assuming a good number of people are like me. They keep their credit card
>bills to a minimum and don't go out buying new cars or homes too big for their wallets.

OK.

>Why can they walk away or renegotiate their debts and I have to "live with it?"

They can't and you don't have to. If you have a fixed 30 year loan and they try to raise your interest rate, you can take them to court - and win.

>Yet in the day of 4% interest I'm stuck with one loan at 6.25% and another at 8.7% (I
>utilized an 80/20 loan to procure my condo for I did not have $60k cash on hand as
>called for).

Right, and banks are stuck with people who are refusing to pay their mortgages. It's sad when people overcommit or decide later they didn't want the loan they got - but that's the risk you take.

>We are stuck with higher interest rates and can't renegotiate a lower rate for we either
>make too much money . . .

Hmm. I've got Quicken Loans calling me once a week trying to get me to refinance. Again, the loans are out there.

>or our value of our property is well below what we owe.

Right. The reason that banks won't touch those is that people do that and then just walk away from the mortgage, since they are still "underwater." Remember how you were complaining about predatory lending practices, and how they shouldn't be able to do that?

Now, if you really want to refinance, put some money down. I guarantee you that Quicken will refinance you in a second if you put enough money down to make up the difference between the home's value and your current loan.

>Most loans today are backed by the treasure of the US. As such perhaps the
>treasury needs to perhaps flex a bit of it's muscle and grow a bit of a spine and
>provide a mechanism by which those who have demonstrated fiscal discipline and
>have demonstrated intent of continued payment be provided a mechanism by which
>their outstanding debts can be reconsidered.

Mandatory debt forgiveness? If the government ever tried that, the banks would run screaming away from any loans in America for decades. Would you buy a house if there was a chance the bank could seek "loan forgiveness" and just take your house away because they had some hard times?

[kelpdiver 2]

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I pay my loan on time, I have a stable job and am a low credit risk. Yet in the day of 4% interest I'm stuck with one loan at 6.25% and another at 8.7% (I utilized an 80/20 loan to procure my condo for I did not have $60k cash on hand as called for).

And here we come to the heart of it. You write about people taking on bigger mortgages than they could afford when you did 100% financing?!!

You and this 0% down are a key component of the inflation in housing prices that now have resulted in you being so underwater that you can't refinance your loan. You're entirely responsible for the situation you find yourself in. Not to mention the reason why I'm still watching on the sidelines, not having been willing to overpay like that presuming the next round of buyers would continue to prop up the prices.

Don't blame the banks for letting you do this. You claim to have been knowledgeable on the subject.

BTW, historically speaking, 6.25% is a pretty good mortgage to have.

[loumeinhart 0]

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I am educated enough to read the fine print and insisted on a NORMAL TRADITIONAL loan.

Not the 20% loan. I'm pretty sure that a 2nd lien position loans (HELOC/seller-mtg etc) are not "conforming products". I -think- 80% loan to value is the highest you can go on for a "normal traditional" loan.

I could be wrong, I don't know what your papers say.

How is your condo by the way? Does it afford you a secure, comfortable, spacious, and otherwise accommodating living situation? Or is the foundation crumbling and roof leaking?

Relax, you bought a chunk of real estate. Make your payments timely and forget about the rest. The value will increase once Michele Bachman makes $2.00 gas...

[weekender 0]

>I'm stuck with one loan at 6.25% and another at 8.7% (I utilized an 80/20 loan to procure my condo for I did not have $60k cash on hand as called for).

You are stuck because you bought a home that you could not afford properly. the way you structured this purchase proves it. learn from your mistake. Next time rent till you can come up with enough equity to absorb a loss in value.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[DougH 270]

Exactly, with zero equity in the house you couldn't absorb any loss of value.

If you had the 20% or more down you likely would still be above water. Or you slightly under water and more likely to be able to pay the difference at closing.

Yes you would have to sell the house at a loss, but you could sell it, and make yourself mobile if that was the right choice after crunching the numbers.

"The restraining order says you're only allowed to touch me in freefall"
=P

[shah269 0]

1) STFU with the personal attacks, not only is it rude but rather childish. Who has $60k to throw at a home from day 1?
*woldn't change things much, the condo is under well over $60k after me paying for the place for the past 4 years. Talk about throwing good money after bad. I'm glad I didn't do that!

2) It was the going rate, if you have the crystal ball and knew the market was overinflated by a solid 30% and had the power to do something.....do it. Don't sit there and be a Monday morning quarter back.

3) I make dam good money and can afford my payments. If I lost my job I would do the American thing, send back the keys with a nice little note stating "Kiss my ass!"

4) If the banks wanted to run away...hell let them! The US has been the safest place on the PLANET for your average banker! Let them go to Russia, hell let them go to China! Ever read a contract written in China? It ends with the line, "All said points in contract are open for negotiation." That is to say....no other country has the basic rules and business practices that we have here in the US. So run...no problem RUN! Find a better place to do business.....don't let the door hit your ass on the way out!
Imagine China or Russia passing a TARP? HA!

All that aside, it's economics. I live in the North East and I'm better off than most both in income and in loss of value. That being said there are people in the south east and south west who are now paying mortgages on homes they bought for $150k that are now worth $50k.
As I stated one or two walking away is nothing, much as one or two inches of rain are nothing. But when thousands upon thousands walk away...well do you think the federal government or the American people are willing to bail out the banks again?

So let's have a serious discussion, what can be done to the system to FIX the mess WE have put ourselves into? And no hanging around without thumbs up our collective asses for the next 5-10 years is not a viable solution.

Life through good thoughts, good words, and good deeds is necessary to ensure happiness and to keep chaos at bay.

The only thing that falls from the sky is birdshit and fools!

[weekender 0]

>1) STFU with the personal attacks, not only is it rude but rather childish. Who has $60k to throw at a home from day 1?

Who sounds childish? read our post vs yours. You do not like what someone says, fine. it does not make them wrong or rude or childish.

Stop asking for a serious discussion. You do not want a discussion that involves anything that considers your own responsibility in your predicament.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[loumeinhart 0]

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So let's have a serious discussion, what can be done to the system to FIX the mess WE have put ourselves into

[shah269 0]

I use to be an atheist until I realized that it's only by the grace of god that this nation has survived this long with its inability to debate or communicate without it turning into a monkey shit fight.

Pick up a few macro economics books regarding flow of capital and job creation.

And with that....adios.

Life through good thoughts, good words, and good deeds is necessary to ensure happiness and to keep chaos at bay.

The only thing that falls from the sky is birdshit and fools!

[DougH 270]

Where is the crybaby smiley. You can't have a conversation if you don't want to hear it like it is. I am not trying to attack you, just tell you what the reality here is.

If you sat down with a financial planner they would tell you the same exact thing, do you think that person would also be attacking you?

"Who has to the 20% down... blah blah blah"

The people who are financially ready to own a house. Those who don't, really aren't.

You sound like Dream Dancer now, THE BANKERS THE BANKERS THE BANKERS.

The bankers didn't force you to buy your house. They didn't steal your 20% down from you. They didn't force you into a interest only loan or a crazy ARM when you were otherwise qualified for a traditional 30yr 20% down mortgage.

"The restraining order says you're only allowed to touch me in freefall"
=P

[weekender 0]

please. you dont like what people are saying so they are picking a fight?

Nothing anyone posted is a personal attack or even rude. Math is funny, its not emotional. It is totally neutral.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[loumeinhart 0]

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And with that....adios.

I bought my first house in 2009 for $3500. I've since put $5,000 into it. It's big and old but It rocks.

So with no mtg/rent payment, MY situation is awesome.

Speak for yourself please

[shah269 0]

Well woo hoo for you.
I guess that's the problem isn't it?
Some people have a hard time seeing the forest for where they are at the moment.
But it's ok I see it more times than I can count. I call it the "flat earth" view. A lack of perspective of the global and long term state.
Why do you think people have a hard time getting their brains around such complex ideas as global warming or evolution or hell any major multiyear multi faceted concept?
Most people can't envision a century let alone a billion years.
And thus the situation we are in at the moment.
I'm fine everyone else can go pound salt?
Well that's nice if everyone else's state did not have a direct impact on your quality of life in this really convoluted and complicated thing we call our economy.

Yeah you did well, but many did not. And not all bought homes they could not afford. And by afford I'm indicating making payments, not slapping down $60K+. If we could find a means by which we could free the capital being send into that black hole and divert it into goods and services....it would be a self funded self sufficient stimulus package developed and funded by the middle class for the middle class to create middle class jobs that would help rebuild our economy.

But how the hell to do it? How do you free that quantity of capital?
Yes you would have to ensure that those who's capital was freed up were of good credit standing and would spend it or us it to pay down debt...but how to free that capital?

OK back to your name calling and accusing people, mostly me, of making poor decisions and that they should go pound salt.

Life through good thoughts, good words, and good deeds is necessary to ensure happiness and to keep chaos at bay.

The only thing that falls from the sky is birdshit and fools!

[weekender 0]

>How do you free that quantity of capital?
Yes you would have to ensure that those who's capital was freed up were of good credit standing and would spend it or us it to pay down debt...but how to free that capital?

You are proposing that the banks take a loss on a property to free up capital for consumers. They are in the business of making loans to multiple people and make decisions based on this not individual properties. They are hesitant to change terms after the fact because it could have a dramatic change to the business climate for them. Suddenly people would no longer feel obligated to honor their end of the contract. defaults would increase greatly damaging the banks source of revenues and profitability. IMO, your proposal is a bad idea for banks and society in general.

>Yeah you did well, but many did not. And not all bought homes they could not afford. And by afford I'm indicating making payments, not slapping down $60K+.

I am of the opinion that you cannot afford the home properly if you cannot afford a decent down payment, insulating yourself from a downturn in value. Others here agree with me, as would most financial advisors. You seem to feel my comments are an attack but just look at the math, remove emotion. You'll see what i'm saying is quite reasonable.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[DougH 270]

Proof is in the pudding. He is being very defensive of the actions that he took. But if they were such wise decisions financially then he would be able to sell the property at loss and he would be able to free himself of his albatrose condo.

Shah, it sucks dude sorry, but you didn't give yourself a plan B.

"The restraining order says you're only allowed to touch me in freefall"
=P

[kelpdiver 2]

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1) STFU with the personal attacks, not only is it rude but rather childish. Who has $60k to throw at a home from day 1?
*woldn't change things much, the condo is under well over $60k after me paying for the place for the past 4 years. Talk about throwing good money after bad. I'm glad I didn't do that!

Unless it is your intent to abandon the home and mortgage, with all the consequences that entails, you wouldn't be losing the money. Just not paying it later. And given the current interest rates and what would have happened to that 60k if invested in 2007, you might still be doing better with it as equity. As I calculated earlier, you'd be close to 215k, nearly even and quick to go back above water.

But in answer to your question, a lot of people have 20%, even more have 10% and do an 80-10-10 mortgage.

[shah269 0]

Quote

You are proposing that the banks take a loss on a property to free up capital for consumers. They are in the business of making loans to multiple people and make decisions based on this not individual properties. They are hesitant to change terms after the fact because it could have a dramatic change to the business climate for them. Suddenly people would no longer feel obligated to honor their end of the contract. defaults would increase greatly damaging the banks source of revenues and profitability. IMO, your proposal is a bad idea for banks and society in general.

But what are the options?
The banks made HUGE mistakes with respect to the mortgages and were bailed out by public funds. Yes many paid back those funds. But let's face it a good many of them would not be around if they had not received such an injection of funds to undo what they had done.

Why can't such a federal option exist for the citizens of this country? Give those that are worthy access to zero interest loans to pay down their differential to be able to refinance and free up capital?

As for accountability, hell you have the IRS! If Mr. Good Credit does not pay well guess what! The IRS will have a little word with you.

The money will be made back in basic taxes on goods and services that the middle class buy. OR the banks may become more stable by the middle class paying down their outstanding high interest debts.

The issue is at the moment, a good number of people are paying good money on properties that have next to no value for the next 5-10 years. If that money could be diverted we could see our economy rebuild faster?

I know it sounds nutty but remember, the US treasury is considered the lender of last resort. And as it stands now we may be at a situation of last resort.

Life through good thoughts, good words, and good deeds is necessary to ensure happiness and to keep chaos at bay.

The only thing that falls from the sky is birdshit and fools!

[billvon 2,426]

>Who has $60k to throw at a home from day 1?

I did. Most of my friends did. I had to come up with 20% for my first home, which was about $70K. It took a while to save it up.

>I make dam good money and can afford my payments.

OK. Sounds like you don't have a problem, then. (Other than you wish you had a better house. We all do.)


>If I lost my job I would do the American thing, send back the keys with a nice little >note stating "Kiss my ass!" . . .The US has been the safest place on the PLANET for
>your average banker!

Those two are very funny statements taken together.

>So let's have a serious discussion, what can be done to the system to FIX the mess WE
>have put ourselves into? And no hanging around without thumbs up our collective
>asses for the next 5-10 years is not a viable solution.

Excellent question. WE can make sure we don't get loans we can't afford on homes we don't want. We can make mortgage investment tools more transparent (i.e. no more CDS opacity.)

In the end, what will fix this problem are people continuing to work, invest in homes and pay off their mortgages. In other words, continue supporting the economy so that it can support other people who want to do the same.

[shah269 0]

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In the end, what will fix this problem are people continuing to work, invest in homes and pay off their mortgages. In other words, continue supporting the economy so that it can support other people who want to do the same.

OK people are doing that, they are working..if they have work...and they are paying money into an investment that will not have any real value in the next 10 years.

How will that grow the economy? It will make a few people very wealthy due to their ability to buy these federally backed mortgages but the rest...the middle class....

What they should just keep dumping money into a hole? How does that create jobs? Jobs are not created by throwing money into a pit.
Yes in 10 years time the pit will be filled with money and eventually capital will begin to float the economy. But as they say in 10 years time we may be all dead!

Thus the question what can we do today? Now!

Life through good thoughts, good words, and good deeds is necessary to ensure happiness and to keep chaos at bay.

The only thing that falls from the sky is birdshit and fools!

[winsor 187]

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Mortgage interest rates at an all time low...and no one can refinance.
For those who are aware of modern economic theory this is a true and very sad catch 22.
Many people would love to refinance their homes, doing so would inject huge sums of cash into out bogged down service based economy.
However, and I hate to pick on the banks here, but as it stands less than 80% of recent home owners, those who bought with in the past 5 years, would qualify due to the value of their homes being significantly lower than what they owe.
What a kick in the pants right? The solution to all of our problems right in front of our noses and we can't even get it.

Case in point me. I bought my condo in NJ for $300k 4 years ago. Since then the value had dropped to about $200k. I've paid down the mortgage to $270k. I will never be able to refinance. And if I did and say I saved $500 a month I could use that money to either buy a new car or utilize services. But due to being under water I am will be unable to refinance for a decade or more. Thus, my buying power along with so many others will not move up thus the economy will not grow.

Sad, but what can you do right?

One can refinance, no problem - assuming there is any equity. Unfortunately, stepping on one's dick by buying into a bubble makes that tough.

If one's job is in some kind of soft science or other field where math is considered on a par with magic, I could understand how it is possible to overlook the basic arithmetic involved. I do not, however, empathize.

Nobody has to buy at the peak of the market. The old adage applies that if you can't afford to rent it, you sure as hell can't afford to buy it.


BSBD,

Winsor

[weekender 0]

>But what are the options?
The banks made HUGE mistakes with respect to the mortgages and were bailed out by public funds. Yes many paid back those funds. But let's face it a good many of them would not be around if they had not received such an injection of funds to undo what they had done.

>Why can't such a federal option exist for the citizens of this country? Give those that are worthy access to zero interest loans to pay down their differential to be able to refinance and free up capital?

the banks were bailed out because our leaders felt our society would be worse off if they let them fail. Not because people love banks or banker or rich people. keep in mind the tarp was paid back. If you get a refi, would you pay the bank back for their losses? We both know the answer. So your not getting a bailout.

Face it, society has put a greater value on our banking institutions then on any one individual. Like it or not, it is what it is.

"The point is, I'm weird, but I never felt weird."
John Frusciante