The bank settlement is in.

#2
#2
Didn't read the article, but heard yesterday afternoon this is like $2k to everyone who was foreclosed on.

Ok, great, but a) what does that do to turn the tide currently; and b) what about those of us who continue to pay our mortgages despite being hopelessly underwater?
 
#5
#5
utvolpj said:
why is that the bank or the gov'ts responsibility?
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Well, first of all, I didn't mean it that way. I meant it more from the perspective of whether we should do something to overhaul all of these mortgages so that people can see some light at the end of the tunnel, even if its a ways off. The problem as I see it now is that people can;t leave where they are to take a new job because they are stuck paying down a mortgage that is so out of kilter it basically is just a long trudge to God knows where.

Second, as long as you ask, I think the banks long term are better off if they coordinate some kind of program to ease this problem. So I see it more in their own self interest, really. But, yes, would probably take some kind of government guarantee program to get the ball rolling.
 
#6
#6
lawgator1 said:
Well, first of all, I didn't mean it that way. I meant it more from the perspective of whether we should do something to overhaul all of these mortgages so that people can see some light at the end of the tunnel, even if its a ways off. The problem as I see it now is that people can;t leave where they are to take a new job because they are stuck paying down a mortgage that is so out of kilter it basically is just a long trudge to God knows where.

Second, as long as you ask, I think the banks long term are better off if they coordinate some kind of program to ease this problem. So I see it more in their own self interest, really. But, yes, would probably take some kind of government guarantee program to get the ball rolling.
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were you ever forced into signing anything? Why should the banks/govt work to help you get out of a contract you freely signed?

suck it up and eat your peas
 
#8
#8
utvolpj said:
were you ever forced into signing anything? Why should the banks/govt work to help you get out of a contract you freely signed?

suck it up and eat your peas
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Okkkkkaaaaaayyyy, I really don't think you see my larger point here, but whatever.
 
#9
#9
lawgator1 said:
Okkkkkaaaaaayyyy, I really don't think you see my larger point here, but whatever.
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or maybe you don't see mine. People entered into a contract knowing what their responsibilities were. Things suck and now people want to get out of or amend those contracts because they aren't able to fulfill their end. Why is that the government's responsibility?

there are plenty of options for people to take to get out and move if they really want to. Of course it will screw up things like their credit but that's simply a reflection on how responsible they are paying debts so it seems pretty fair.

My house is worth much less than what I bought it for in 2006. Funny thing is I owe less than it's worth right now. How is that possible? Am I eligible for any assistance for being responsible?
 
#10
#10
utvolpj said:
why is that the bank or the gov'ts responsibility?
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Depending on who you ask, it's some combination of fault with banks and the government for creating the recession which directly resulted in the collapse of home values.

Millions upon millions of people bought their homes on bubble prices, and if you allow the markets to reset without offering refi, then you're still going to be left with 20-25% or whatever it is of homeowners underwater on their mortgage.

As for the banks, we'll see what comes of this. They got off pretty easy here depending on which state you're talking about, I was aware of at least a dozen attorneys general or so who said they had a much tougher, very winnable case.
 
#11
#11
milohimself said:
Millions upon millions of people bought their homes on bubble prices, and if you allow the markets to reset without offering refi, then you're still going to be left with 20-25% or whatever it is of homeowners underwater on their mortgage.
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again I ask- so what? There is no guarantee that the house will be the same price or higher at all times.

I bought my house in May 2006 and it has dropped about 15% yet I am doing just fine. Should I get paid back for the money I essentially lost in the deal?
 
#12
#12
utvolpj said:
again I ask- so what? There is no guarantee that the house will be the same price or higher at all times.

I bought my house in May 2006 and it has dropped about 15% yet I am doing just fine. Should I get paid back for the money I essentially lost in the deal?
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Forgive me, I forgot for a moment that "systemic risk" is a dirty phrase around here.
 
#13
#13
milohimself said:
Forgive me, I forgot for a moment that "systemic risk" is a dirty phrase around here.
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you act like I don't understand that. However no one can point out why people who make bad choices get rewarded and people who do the right thing get screwed.

In my world if you owe the debt you either pay it or face the consequences. Unfortunately it seems my world is very small
 
#15
#15
utvolpj said:
you act like I don't understand that. However no one can point out why people who make bad choices get rewarded and people who do the right thing get screwed.

In my world if you owe the debt you either pay it or face the consequences. Unfortunately it seems my world is very small
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The consequences are bad credit, and losing some possessions. I don't feel all that bad for people with bad credit. All it signifies is that they are in a situation where they are forced to live within their means. I'm sorry, these people don't need or deserve charity/bailouts. If they do, everybody does.
 
#16
#16
T-TownVol said:
digging DEEEEEP into the bailout talking points
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I'm aware.

nbakerld said:
The consequences are bad credit, and losing some possessions. I don't feel all that bad for people with bad credit. All it signifies is that they are in a situation where they are forced to live within their means. I'm sorry, these people don't need or deserve charity/bailouts. If they do, everybody does.
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Karma is fine. Karma is good. Karma is necessary.

But, just for fun, let's just think this out on a macro level: What happens when a quarter of all homeowners in the US are left with underwater mortgages indefinitely?
 
#17
#17
The same thing that should have happened to the banks and auto companies.
 
#19
#19
milohimself said:
But, just for fun, let's just think this out on a macro level: What happens when a quarter of all homeowners in the US are left with underwater mortgages indefinitely?
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wait, don't the homeowners control how long that is? Indefinitely implies they don't

T-TownVol said:
The same thing that should have happened to the banks and auto companies.
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pretty much
 
#20
#20
milohimself said:
We don't know for sure what would have happened to the banks.

Let's stick with homeowners for now.
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and most homeowners would find a way to survive just as the banks would have.....lets stick with "get the government out of private business" for ever.
 
#21
#21
milohimself said:
I'm aware.


Karma is fine. Karma is good. Karma is necessary.

But, just for fun, let's just think this out on a macro level: What happens when a quarter of all homeowners in the US are left with underwater mortgages indefinitely?
Click to expand...

The banks go down for agreeing to make bad loans. The system goes through severe short term growing pains, but home prices return to a more normal level, and the masses are better off in the long run.

We think about the issue from the "con" perspective of established families who invested in inflated homes without the means to pay for their bad decision. The pro in all of this is first-time home buyers are reaping the benefits. Buying a home is more feasible for them now.
 
#22
#22
I'm much too nice to have a responsible opinion on this. Haven't met enough people living on the govt dime like tha rest of ya, i guess.
 
#23
#23
nbakerld said:
The banks go down for agreeing to make bad loans. The system goes through severe short term growing pains, but home prices return to a more normal level, and the masses are better off in the long run.

We think about the issue from the "con" perspective of established families who invested in inflated homes without the means to pay for their bad decision. The pro in all of this is first-time home buyers are reaping the benefits. Buying a home is more feasible for them now.
Click to expand...

I'm not in the buyer's market ATM, so I'm not sure what credit requirements look like, but I'll take your word for it.

I have a friend out in the Columbia River Gorge that received a seven figure settlement for being shot in the shoulder point blank by his landlord, and bought about a dozen properties when they hit bottom.

I was looking for a more specific answer, but it's a genuine question; Somewhere between a fifth and a quarter of all home owners are underwater, for simplicity's sake let's assume that applies to the seller's market. What would be the results on a macro level of 30 million homeowners, or whatever the figure is, of either taking a substantial hit on equity or severely damaged credit?

I'm basically asking for a thorough explanation in this situation of the typical "free up the markets = good" explanation.

The crappy thing I see going on in all this, is I see no acknowledgment of the issues that led to tens of millions of untenable loans being written in the first place. Banks rightfully ought to be punished for any cases of that happening illegally, but where is the culpability in market conditions?
 
#25
#25
milohimself said:
But, just for fun, let's just think this out on a macro level: What happens when a quarter of all homeowners in the US are left with underwater mortgages indefinitely?
Click to expand...

Here's the question though - there are plenty of economists that suggest that what you've suggested above is really the better solution - by artificially floating the housing market we are in fact making the pain longer and potentially worse.

Politics aside, I haven't seen evidence that this is good policy from a macro perspective.

Add politics in and T-Town was right - it is a feel good, short-term approach that gets votes, "punishes" greedy bankers and kicks the can down the road.
 
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