Welcome Aboard the Foreclosure Express
Click the post title above to see today’s video! Catch all your real estate news, mortgage news and a little entertainment with Frank Garay and Brian Stevens here at www.TBWSDailyShow.com. And get some sales tips at www.RealEstateMarbles.com!
You stated that homeowners signed a contract that should be honored and that the contract does not have provisions for modifications or help with paying mortgages. I’m in total agreement…. but there are exceptions in life when undue hardship devastates so many. I mean you can’t come down on homeowners about demanding help when we the taxpayers are bailing out banks that created the downfall in the first place. Why is it that the cry out of homeowners, who need help is not valid but the fact that banks took money from the government or (we the people) was not even mentioned. Is it our responsibility to keep them afloat, I think not. However, here we stand……
Ok, per your analagy, the housing and lending market is bleeding profusely and needs to have the arm amputated so we can start to recover and heal and an axe should be used instead of the current butter knife. I think you should add to this analagy that not only is a butter knife being used but per over regulating loan officers in recent months with comp reform and disclosure laws that simply hurt the consumer rather than helps them, our government leaders maintains that the best way to amputate that arm is to turn the butter knife upside down and continue sawing. This is essentially what they have done and where we are with a glut of foreclosures still coming, vast shadow inventories still out there, and a tightening up of lending guidelines…all are just going to guarantee that our housing market recovery is still going to take many more years. What a crying shame for all tax payers, all home owners and those that want to be home owners. Do you know any adult citizen that does not fall into those categories…I don’t.
ACCOUNTABILITY from everyone!!!!!
Agreed the Banking Industry is not in the modfication business or should/do they care about the borrower, however they are part of the problem as they (banking and our own government) have created the situation we now face do to failed finance regulation, and simply put greed, otherwise knows as the bottom line/profit.
Our greedy fiancial system and government deregulation have created the situation where housing values now shoot up and down in approx. 15 yr cycles, creating the current mess we now face, and can be expected to face again in the forseeable future. The banking/loan industry is not equipted to handle security values (our home values) that rise and fall like yoyo’s.
Deregulation of the old laws that protect against this sort of thing were striped away in the 1990′s and early 2000′s, due to wall street/finance industry pressure to acquire more profitability. This destroyed the stability of the mortgage industry that rely’s heavily on stable home values, to the point that mortgages now have no stability. The Banking industry created this situation, and they bare responsibility for it, and the mess we now face. Those laws and regulations that were removed need to be replaced to again create a stable home market. Our homes cannot and should not be treated like wall street commodities to be sold and exchanged at will.
From about 1960 to 1980 the 30 year loan ruled. Creative financing, or variable interest rate loans etc., were created to allow for more turnover, and provide more profit, in the process destabilizing our housing industry. If we are to return to a climate of stable housing values, the loan/banking industry and government regulation, have to create that climate again, thru laws/regulations that protect and stabiltize our home values.
Agree with nearly ALL your suggestions. They cannot solve the problems created with sub prime & Alt-A by making it more difficult on new loans.
You said quit adding costs to loans based on credit scores. Agree, but the benchmark should be 700, not 760. A 700 credit score puts a borrower in the top 20%.
You said bring back DPA. Why do we need a 3rd party for a “bogus down payment”? What we need is a properly underwritten 100% loan. (MI could be 2 parts via a .25% – .5% higher rate + an up-front financed premium.
Someone should put these solutions in writing and submit to?????? That’s the problem, who is in charge that has an agenda to solve the problem. The Fed & big banks are in bed together to reach an objective that differs from yours, mine and everyone else making thier living selling & financing real estate.
I love the TBWS guys, but I strongly disagree with their message in this video. Modifications are a GREAT idea in that they *should* allow a mutually beneficial compromise to help with a bad situation: Making it easier for home owners to keep their home and saving the banks and the market from the losses caused by foreclosure. The problem: banks aren’t cooperating.
We all know this whole thing is rigged in favor of the banks, and that the banks are in bed with the financial policy makers in the government. Think about it, the whole country is suffering while a few fat cats get rich. This is not a healthy version of America. Regarding the mortgage notes: I heard a great quote “We have a legal system, not a justice system”. This means the note get’s enforced regardless of whether the overall situation is fair or not, or for that matter good for the country/economy or not. It’s not like the average American has a choice here, you either play by the banks rules of what mortgages they offer, or you stay a renter forever. So we do our best and buy ourselves houses, we sign the only contract available to us. Then the system that is totally beyond our control destroys both the value of our homes and our jobs/economy. And to add insult to injury we are FORCED to bail THEM out. It’s really SICK and DISGUSTING when you think about it. Look at how poorly this country is treating 95% of it’s loyal citizens while rewarding a few who are way to powerful and greedy. Legal but not Just.
I think the banks got bailed out of their ‘foreclosure’ by taxpayers.
It’s basically a gimme your money and now get the hell out.
Hi Brian, 20 yr appraiser here and regardless of how some might “nail” you on parts of today’s video, you have some basic points correct. One good point is that different home types (prices) will sell from one month to the next in an area and can tweak stats big time; even many appraisers are completely overlooking this important point. Our local Realtor Assoc. published this white paper and it clearly points out this problem: http://oregon-appraiser.com/external/stats1.pdf
Other BAD issues many regulators/appraisers across the nation are ignoring (or not wanting to admit) is the out-in-the-open fraud and violations of appraiser intimidation by AMC’s being allowed to change Scope of Work with below market fees and unreasonable turn-time (often only 24-48 hours given to upload a report). No matter what anyone says, you are often getting a different appraisal product when there is a mandated 48-hour turn-time requirement… also whenever an AMC is allowed to “force” appraisers into prettying up their reports with 90-day comparable sales that aren’t comparable or similar requests. (improves sell-a-bility of paper for secondary market/securities packages.. intentional fraud??)
Bottom line, per USPAP, the APPRAISER is the only one who is ultimately responsible for deciding Scope of Work and I guess that in itself removes any wrong doing by all the AMC’s that dictate 24 to 48-hour turn-time?? ..even if the AMC realizes they are predetermining appraisal results by setting a “come up with your most accurate analysis within this time-frame” that along with below market fees further stymie appraisers from doing their job (Sherman Act violations?). I used to be a high-volume appraiser too, but allowing this BS to prevail as the norm is just plain stupid and even most appraisers who routinely meet these turn-times will tell you it’s not right and they could improve their work product if given more time.
Another terrible issue few of us appraisers will tell outsiders is that most good appraisers are completely fed up with our profession and how AMC’s are being allowed to bully us… that many are so fed up, yet also so desperate to keep a roof over our head, that many are quietly telling each other “f*ck it”… just give the AMC’s what they want so you can keep getting work! Effectively, AMC’s now have free rein to legally pressure and intimidate appraisers, with no one to stop them… and they are getting pretty darn good at beating us down, that’s for sure. (Effectively making way for title companies to be the new valuation providers- HVCC is only part of a well-planned attack to eventually take over the valuation industry)
Ok, guess you can tell I’m pissed like the rest of us appraisers, but before I get off this soapbox I want to also mention all the new “lender requirements” AMC’s are now pushing… most are NOT by the lender, but by the AMC supposedly acting “for the lender” in the capacity of quality control. What a joke.. these mostly untrained monkeys are trying to turn appraisers into trained “form filling monkeys” and I believe Brian has this part at least partially correct (AMC’s dictating what kind of values they want). FNMA and HUD appraisal rules and the FNMA Selling Guide is what sets the appraisal rules, NOT individual AMC’s or Lenders and this new method of intimidating appraisers is a giant growing problem that will only get worse unless stopped. Perfect example is a recent Coester Appraisal AMC webinar that told appraisers to remove all boilerplate and USPAP addendums (because it pisses AMC reviewers off to read all that stuff). Ok, so here’s a webinar watched by hundreds of appraisers nationwide, where an AMC manager is saying to remove the very boilerplate appraisers are trained to add, in order to make the FNMA form compliant with current USPAP and to cover our hiney. Appraisals are serious business and if AMC staff is either too lazy or ignorant to skim a few extra paragraphs, then find a different line of work!
In closing, I want to mention that without the “anti-fair trade” HVCC rule, AMC’s would have NEVER EVER got my hard-earned strict Bank clients from me! HVCC continues to rob me and my colleagues of our hard earned careers and although appraisers still aren’t very organized yet, we’re getting more pissed with every passing day, so stay tuned….
What with bank like Chase offering the previse onwer a cash presentage to help them fine a realtor to sell the house they walked away from in one case the check to the person who they forclosed on was for $ 35.000 for a $ 300.000 home all of these banks have there asset managers witch have there realtors in place. Banks won’t lead people money but they will paysomeone very well for a referral what’s wrong with this picture
If only the holder of the note can foreclose, how are they going to get away with massive foreclosures that you’re calling for?
Bring The Ax, is a great rallying cry. But where in the hell is the ax coming from?
Great point Corey!!!
Whoops… Corrie, you double named looker you!
Bottom line is that the banks were bailed out! Does anybody remember that? Hindsight now tells me that was the biggest scam in history! If you think the politicians did not get their pockts lined in a major way, then I have some swampland in Florida that I want to sell you!
Now the banks are holding back the best assets from hitting the market! This is directly holding our economy hostage! They just trickle out a house here and there to keep the preices from dropping (and even rising in some areas). Our economy will ONLY improve when we start moving houses FAST! There is no way our economy will get better at our current pace. They got their bailout money and now they just don’t care. They will take their sweet time to make sure they maximize profit on each REO. The worst part is that the general public does not know this! The bailout should have never happened…Now were doubly screwed! The banks have their cake and eat it too! I am very angry and now it’s time to get even! Who’s with me?
I was and still am 100% against the bailout.
The banks were gonna get ‘foreclosed’ on and what happened to them?
They got a wad of cash from the people who they are trying to kick out of their homes.
@james
One client once said to me—what if everyone stops making their house payment? what would the banks do then? foreclose on the entire nation?
Something to ponder on makes sence :
Inside Information Daily
There was a fascinating article published today that the famous Ph.D. holding economist, Irwin Stelzer, has written for the Wall Street Journal. In it, he makes some of points that I have been making, and will continue to make, though I strongly disagree with his conclusions.
Who is Mr. Stelzer? Here’s something from Wikipedia:
“Irwin M. Stelzer (born 1932) is an American economist who is the U.S. economic and business columnist for the Sunday Times, the Courier-Mail, the Guardian and a contributing editor of the Weekly Standard. He is also an occasional contributor to the Daily Telegraph and the New Statesman. He resides in London and the United States. Stelzer has served as a managing director of the investment banking firm of Rothschild Inc and was co-founder and president of National Economic Research Associates, Inc which became NERA Economic Consulting and which was subsequently sold to Marsh & McLennan, Inc. He is a signatory of the Henry Jackson Society, a senior director and fellow of the Hudson Institute and has edited and introduced a book on neo-conservatism. He is a visiting fellow of Nuffield College, Oxford. Prior to joining the Hudson Institute, Dr. Stelzer was resident scholar and director of regulatory policy studies at the American Enterprise Institute.”
It is an impressive resume and the article itself is impressive in its candor, in terms of how it gets straight to the point. “We are confronting a crisis,” he writes, “but it is not a Greek crisis …” It is, “an international banking crisis.” This is what I’ve been consistently telling anyone who will listen. The system of central banks has created perhaps the most monumental economic dislocation, also called a bubble, ever seen.
There are literally thousands and thousands of major bank branches all over the world. The downtowns of every major city in the developed world and the developing world are littered with them. People are so conditioned to their existence that they don’t even notice it.
Imagine if banks were actually … tableware manufacturers. Now imagine entering a strange city and seeing the entire downtown was FILLED with skyscrapers, each one representing a different, competing brand. Imagine the city and the countryside was full of branches, all selling tableware. It wouldn’t make any sense.
Is there that much demand for tableware? why would the tableware manufacturers have thousands and thousands of extremely expensive skyscrapers?
Well, tableware manufacturers wouldn’t, but bankers, when they are able to create money out of thin air, will create near limitless quantities of money for their own benefit. The current system allows them to do so, and their billion-dollar skyscrapers, 8-figure incomes, 30,000-square-foot homes are testament to the fact that they are not shy about creating money for themselves.
I am not the only one who sees the hideous trouble of allowing private central bankers to create money out of thin air for their own benefit. In 1958, Silas W. Adams wrote in “The Legalized Crime of Banking” that Josiah Stamp said,
“Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take this power away from them, and all the great fortunes disappear, and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create money and control credit.”
Central banks create money out of thin air and lend it to “member banks” at interest rates that are currently between zero and 0.25% per year, which is the Fed Funds rate.
How much better off would you be if you could borrow billions at zero percent interest?
Eventually, bankers will create so much money that it dilutes the value of existing currency down to nothing. This has happened throughout history. The most recent example was Zimbabwe in 2008. We are currently witnessing the early stages of this wicked process in the United States.
Stelzer doesn’t come out and tell you that. Nonetheless, it is a frank article for the Wall Street Journal — the newspaper of record for mainstream business journalism in the US — to present to the general public.
Stelzer suggests implementing some steps that, he writes, would be “a start.” His steps are nothing more than a vain attempt to maintain the status quo. Nowhere does he write that central banking itself is at fault, that the ability by a select few to create unlimited amounts of money out of thin air for themselves and their friends is what has caused the inevitable, endless crises we now face.
Until the so-called banking “elites” are forced to step back and acknowledge the fundamental systemic structures they have created are unsustainable, through the internet people like myself will continue to expose what’s really going on.
I cannot stress strongly enough: we are in the midst of a financial crisis that is more severe than any ever seen. Even the Wall Street Journal is admitting it.
You need to be constantly preparing for the oncoming storm.
More tomorrow.
http://insideinformationdaily.info/signup16.php
Can’t get this one to load or play on any of my I Phones( too close to ‘ em ea’ ?) will try again later on the old lap top!!! ttfn, Jeff
I just found out why I’m having trouble posting to your site. This site is loaded with viruses. I’m running SAS now. So far it’s coming up with the XP internet security 2102 virus and more. I tried to post and it shut down all my open windows. 2nd time, most of my open windows.
You’ve got a breech and a serious problem. I read anti-malwarebytes gets rid of this. That’s my next effort.
We’re in a Great Depression, there is no recovery when taxpayers dollars are propping up phony markets. The real markets died in 2008 and what we have now is a corrupt facsimilie, to fool the people in appearances that things are alright, and it’s complete with funhouse smoke and mirrors. The only ones having a recovery and any fun are the ones holding those distorted mirrors and blowing smoke.
Homes values fell in the Great Depression 22% and they’ve fallen here now 33%. When you use the criteria that they used for unemployment figures back then – they’re nearly identical now as compared to then. And inflation is worse. There is no recovery and there won’t be as long as taxpayer monies prop up an unreal financial system that replaced the old one that died and was replaced by zombie banks and that funnels money from the taxpayer to the elite. If you want recovery, we have to get back to real markets and that means prosecutions.
Frank and Brian, you’re still ignoring the fact that the banks committed fraud. They didn’t loan you any money to buy the house, they took your signature and created that credit and then used fractional reserve banking to create 9 times that amount that they could use to fund more bad mortgages. They aren’t right or legal if the don’t have the note. Law guys, not your personal opinion is what matters.
We’re in a Great Depression, there is no recovery when taxpayers dollars are propping up phony markets. The real markets di ed in 2008 and what we have now is a corrupt facsimilie, to fool the people in appearances that things are alright, and it’s complete with funhouse smoke and mirrors. The only ones having a recovery and any fun are the ones holding those distorted mirrors and blowing smoke.
Homes values fell in the Great Depression 22% and they’ve fallen here now 33%. When you use the criteria that they used for unemployment figures back then – they’re nearly identical now as compared to then. And inflation is worse. There is no recovery and there won’t be as long as taxpayer monies prop up an unreal financial system that replaced the old one that died and was replaced by zombie banks and that funnels money from the taxpayer to the elite. If you want recovery, we have to get back to real markets and that means prosecutions.
We’re in a Great Depression, there is no recovery when taxpayers dollars are propping up phony markets. The real markets di ed in 2008 and what we have now is a corrupt facsimilie, to fool the people in appearances that things are alright, and it’s complete with funhouse smoke and mirrors. The only ones having a recovery and any fun are the ones holding those distorted mirrors and blowing smoke.
Homes values fell in the Great Depression 22% and they’ve fallen here now 33%. When you use the criteria that they used for unemployment figures back then – they’re nearly identical now as compared to then. And inflation is worse. There is no recovery and there won’t be as long as taxpayer monies prop up an unreal financial system that replaced the old one that died and was replaced by zombie banks and a system that funnels money from the taxpayer to the elite. If you want real recovery, we have to get back to real markets and that means prosecutions.
Bullseye 5pence!!! How come so many people that take shots at homeowners that are delinquent dont understand those facts. No note-No mortgage and fraud is fraud. Hey Frank & Brian, lets say you guys got married and you are celebrating your 5 year wedding anniversary only to find out your wife has been banging every guy she came into contact with since the day you met. Would you stay with her because “You took your vows and entered into a contract with God? Of course you would not, why? Because she defrauded you from day 1 just like these lenders did when they “pretended to make a loan”. Get the facts guys before you stand in front of a camera and look like 2 fountains of misinformation.
Frank and Brian, you’re still ignoring the fact that the banks committed fraud. They didn’t loan you any money to buy the house, they took your signature and created that credit and then used fractional reserve banking to create 9 times that amount that they could use to fund more bad mortgages. They aren’t right or legal if the don’t have the note. Law guys, not your personal opinion is what matters.
We’re in a Great Depression, there is no recovery when taxpayers dollars are propping up phony markets. The real markets di ed in 2008 and what we have now is a corrupt facsimilie, to fool the people in appearances that things are alright, and it’s complete with funhouse smoke and mirrors. The only ones having a recovery and any fun are the ones holding those distorted mirrors and blowing smoke.
Homes values fell in the Great Depression 22% and they’ve fallen here now 33%. When you use the criteria that they used for unemployment figures back then – they’re nearly identical now as compared to then. And inflation is worse. There is no recovery and there won’t be as long as taxpayer monies prop up an unreal financial system that replaced the old one that died and was replaced by zombie banks and that funnels money from the taxpayer to the elite. If you want recovery, we have to get back to real markets and that means prosecutions.
Brian and Frank do a good job getting the truth out. Lenders don’t care about modifying notes –especially with no political or social pressure. Every borrower DID sign a note. Okay, so every loan is SECURED. The lender made the decision that the collateral supported the loan. Both parties have options. Modifying makes sense in many cases and probably should be proposed as a Short Term attempt to help both the borrower regain traction and the lender regain value. 5-10 years would suffice in most cases. Since the exit strategies of Sale and Refinance have been eradicated in many cases, it would be a reasonable alternative to the pain and costs of Foreclosure –on primary residences.
“Modifying makes sense in many cases” … to the borrower.
But this isnt about the borrower. This is about banks balance sheets. In 2007 if it was only about the borrowers they could have bought all those subprime loans for the amount of bank bailouts.
This is about the derivatives from the MBS, CDO, ABS, etc. Essentially all the bets made on RE is so much more larger than all the mortgages.
The borrower is small potatoes to the billions to be made on the bets. Banks have too much toxic waste on their books that cant be sold at any cost. Price discovery is what they fear the most … so extend and pretend is the name of the game.
Whereas I do agree that everyone should live up to their contractual obligations. The banks really need to take responsibility for the mess THEY MADE! And by taking responsibility I mean principal reductions.
My house which was worth 1.4 mil is now below $600K! They did this to me and the market by not loaning money! I didn’t do it to myself. Realistically my note should be reduced by half!
Your 2 shows last week talking about ways to fix this mess, placed the blame squarely where it belongs.
The banks are doing nothing to fix this problem, as they are getting big money form the Govt to make up for their losses.
So the only way I see to make them fix it is to eat some of the Principal they have stolen.
FAT CHANCE!
They are holding the economy hostage by the threat of crashing it, and the idiots we have running this country are so stupid they don’t know the difference between and idle threat and reality.
The banks have more to lose! The country will survive, no matter what, and if they did crash the monetary system, none of them would live to tell about it. They would be hunted down and executed like the Nazi’s they are! I personally think they should be labeled as “Traitors” to this country.
I have no use for these greedy SOB’s that would place their own personal gain above the welfare of the country that allows them to be in business in the first place.
Randy
Well said…
Very well said!
Randy,
While I completely agree that some of what the banks have done is horrible and downright criminal in some cases, I have to disagree with some of what you’re saying. By the decline in your home’s value as you’ve stated, I’m guessing you live in one of the following markets: Phoenix, Las Vegas, California or Florida. First of all, to suggest that it was all the bank’s fault that you payed huge money for your home only to see it come crashing down is nowhere near accurate. There were many factors that helped this occur. The fact is, some of the markets, while things were good, were appreciating at ridiculous, completely unsustainable rates. Anyone with a bit of knowledge and some common sense could have and should have seen this. Instead, so many people turned a blind eye and jumped on the runaway train that was the real estate market. Some with the hopes of making fast cash and others who just had to have that $400,000 home even though they may have only qualified for $250. I completely see the bank’s role in all of this and they are as guilty as anyone. With that being said, I have to question your logic that the banks should just slash your pricipal balance in half. While that may sound great! ( for you) what about all of the rest of the hard working people out there who DO pay their maortgage each month, some struggling to do so? What about them? Where do they go to get compensated for the huge loss of equity they’ve realized as a result of this whole mess? ( that all originated in a handful of markets) Something to think about.
Kaboom!
This situation is not going to get better until these foreclosures find buyers, period. Note holders should sell the houses for what ever they can get out of them, take the hit and move on. There are plenty in investors who would buy the properties at some price if they can find leverage and enjoy a possitive cash flow. As to what banks are in business for, well it seems these days it’s to provide enormious saleries and bonuses to their excutives and little else. They can’t even manage staffs in sufficent numbers to handle foreclosures and short sells. It’s a crazy situation when appartments are full and rental property is at a premium, while houses by the thousands set empty or occupied by people not making payments.
contractable obligations…stop playing on the emotions. These very same banks buy and sell discounted notes all day and every day. a borrower has the right to vacate an investment and should if it is the best option.
facts!
1. forclosures are not over.
2. Many homeowners are hanging on by a tread every month, these unit are not even on the radar becuase they have timley/preforming loans
3. The futher the market sinks, more Short Sales will pop-up. why pay your current mortgage when you can purchase a model match for half the price and lower payment.
4. Next crisis is FHA, the past 3-4 year huge market share of Gov’y lending will raise the new head of the beast, FHA defaults. there is reason PIMCO is out training realtors coast to coast on FHA REO’s. With high balance areas cumbling, you may see FHA balance sheet liquidated.
5. we will see where MERS title issues go….that may put the brakes on forclosures. they have undermind 400 years of land/title deeds in 10 years……
thatguy, what do mean PIMCO is training agents coast to coast for FHA REO realtors. Can you give more details.
Thatguy,
You are a prime example of what’s wrong with giving EVERYONE a forum to express their opinions, whether those opinions are based on fact and/or experience or on nothing more than one’s ability to repeat what they’ve heard.
Why pay your mortgage when the home has dropped in value and you can just go out and buy another one for less money?? Are you serious? I’m guessing you are fairly young or just naive. YOU agreed to pay back money that was loaned to you to buy an asset. ( Whether the bank physically had the money they “loaned” you is another topic- the fact is, their loan enabled you to close on the home)There were no guarantees of future appreciation. While over 200 years of history would suggest that real property goes up in value, there are obviously exceptions. When a market is allowed to be driven by extreme greed and ignorance, whether that market is real estate, stocks or something else, the results are usually very predictable.
Lose the ” it’s all about me ” mentality for a moment and consider the consequences if everyone shared your view- that we should all just default on our mortgages and go buy another home for pennies on the dollar. Do you have any idea how much damage that would do? Do you care at all about the people who have worked hard all of their lives to have their own home, people who’s word still means something? Many of these people are in markets that never should have adjusted nearly as much as they have. Maybe that might not have happened if there weren’t so many poeple who share your view that it’s okay to just dump your debt on the rest of the country and start over!
Maybe you should consider the people who work hard every day and struggle to pay their bills! Where do they go to get compensated for all that they’ve lost at the hands of the ultra greedy and ignorant few?
It would be great to just go ahead with foreclosures on all of these homes and get this over with. Its like a wound that just won’t heal because you keep picking at it. One thought though, can the banks handle all of these properties at once and what would happen to home prices? Wouldn’t the glut of homes on the market make prices tank and cause another wave of people to go into foreclosure as underwater home owners increased?
Yep – We need to think long term and long term says – Principal reductions from the lenders who received money to do it. Keep people in their homes. I’m currently doing my first new purchase from a ‘strategic defaulter’ who intentionally foreclosed and waited the required time period to buy again – to the day. We got into contract today on a house that is twice as nice as he had and half the price. This is not a moral dilemma – it’s math. Th
Great job! There is not a moral aspect of the contract between the lender and the borrower, merely a contractual one. The breach of the contract by the consumer allows the lender to foreclose and report the credit of the borrower (in some cases seek a deficiency, i.e. junior lenders) and that is it. When enough time passes for underwriting the foreclosure in the past, i.e. 3 years for FHA, they get to buy again. Sounds like a very sound business practice.
CVBroker, Math? It most certainly is a moral issue! Strategic default ( those who have the abilty to pay their mortgage but simply choose not to since the home has dropped in value) requires the mentality that had so much to do with where we’re at these days. The ” it’s all about me” mentality. “screw all the neighbors and what my actions do to their property value”. That seems to be so prevalent these days. It’s pretty disgusting when you see this and there’s a new car in their driveway and the latest big screen tv in every room in the house!
I’m starting to feel more and more like a sucker each month as I struggle to pay my bills! Who’s going to cut me a check for the 100k+ that I’ve lost in value since this nonsense started? Is there a line somewhere for that?
I hope that the ” Broker” in your name doesn’t refer to Real Estate Broker. I’d like to think that someone else in the business would clearly see how this is a huge part of the problem and not part of the solution.
Yes it would.
Which is why there are 700,000 people living in homes who have not made payments is over two years.
Houses not foreclosed and no payments – banks keep on balance sheet at full price even though nobody is paying.
Houses foreclosed on – banks keep on balance sheet at full price
Bank REO’s sold - losses must be realized on the balance sheet.
See why it takes so long to foreclose and why the shadow inventory is so much larger that MLS?
Let the foreclosure process run its course! If one doesn’t pay his bills and doesn’t have the sense to know what he can afford, then the only one to blame is onses self. Bailing anybody out is simply forced income re-distribution. Self accountability goes a long way, the lack thereof goes a long way too – just in a different direction!
Amen brother! Get out the ax…
why stop here, I want to live in a million dollar home, can only afford a half million home so hey, let me buy that million dollar home and pay only half a million, it’s all I can afford. In fact, why stop with homes, I like a seventy thousand Mercedes but can only afford a Kia, but hey, cut the price in half so I can drive that. Situations change, we adjust, our parents knew this and growing up we moved up as their income grew, period. If you can’t afford it, you can’t have it, this is Capitalism!
Why stop there? I want the bankers who destroyed the lives or 10′s of thousands of people around the world, to be thrown in jail. The $ trillions, they stole, with the support of the FED, should be returned to the people. The 40 million fake mortgages, upon which their ill gotten gains were based, should be forgiven 100%. This isn’t Capitalism. This is an oligarchy and you’ve drunk the cool-aid.
Thank you!!
That ” thank you” was in response to michaelforbes
F & B,
No doubt dudes, the foreclosure express should go full steam ahead, but with regards to Chase…Riddle me this, and I totally agree that everyone signed a note and is obligated to repay, but greed replaced common sense. Everyone is in similiar financial boats, EXCEPT THE BANKS. With Chase, lets be real here, the bulk of their mortgage portfolio is that of WAMU. They bought those loans for pennies on the dollar, why not give a deal when they get a deal? Yes, its right and moral to foreclose when payments arent made, but to drag a borrower out 2 years with empty promises of modification is crossing the line and I see it constantly with Chase. Why not this?….I take out a loan with WAMU at 100 pennies on the dollar, Chase bought them for 32 pennies, I work in the mortgage business and can no longer pay the 100 pennies, but I can pay 64. Its still a profit to Chase yet they’d rather get 30 pennies on the dollar by foreclosing. Why?
Knowing the truth of how they operate and seeing the millions being spent on their PR commercials of “rebuilding local economies” makes me want to vomit. Theyre stringing people out and getting paid big to do it. Berne Madoff would be proud!
Hey Guys lets cut to the bone and discuss the one thing nobody is talking about.
Here in NorCal prices are still too high.
Quite simple, and the USGovt gave you the formula with their mortgage mod workout when they stated a 31% of gross income payment plan.
Debt to income ratio by that formula basically says the average income of $50K can afford an average $150K home. See how simple it is?
Where are the sales taking place? At the foreclosure end of the curve where qualifying incomes can meet the payment requirements.
I have been saying this for a long time. Most homeowners dont want a bailout, the just want lower payments. There are many homeowners out there with 6% or more interest rate. Because their home is upside down, they cant refinance…..even with full qualifying. Why can’t the government come up with a program and allow a one time drop to the current interest rates? I am talking about no qualifying, no appraisal. Have it be a flat fee cost for the option to pay for services. Redo the note and make it recourse if they default. This would stop many strategic walk aways. Whatever bank currently carries the mortgage should be made to do it, especially if it was a bail out bank.
nothing wrong with this – in fact it was proposed to congress late last year. Think it went any where? The trouble is you can’t motivate a bloated, self important organization like congress to actually do something good for the people its supposed to represent. That’s so true but equally so sad.
Big picture….
Banks won’t change.
Foreclosures crippling comp values
Stats show minimal lending acivity outside of REOs
LOs leaving the industry in numbers because they can’t earn a living,
Joe public is not buying, selling or refiing.
Legislators don’t care enough to effect change.
F&B are just trying to tell you the reality. Without getting the values back and not being haunted by foreclosure induced “declining markets” – we are all toast.
Once upon a time, long, long ago, there was a lawyer who was losing his home to foreclosure. Since he didn’t have to pay legal fees, he sued the bank under the grounds the “money” given in return for a mortgage on the REAL property was created out of nothing (fractional banking) and therefore, nothing of value, making the contract null. It was called the Credit River Decision with First National Bank of Montgomery vs. Jerome Daly, decided in the late 1960s. The judge ended up dead 6 months later and the case was swept under the carpet until recently.
http://educationcenter2000.com/legal/credit_river_decision.htmAC
Brian and Frank: Have ya ever READ a STANDARD FHA NOTE:
See Below from a Federal Court Complaint I’m getting ready to file. This is the tip of the iceberg on “legal duty”.
Blair
The note states, “MULTISTATE – FHA FIXED RATE NOTE USFHA, NTE 05/01/08″ and the deed of trust has a notation, “FHA COLORADO DEED OF TRUST – MERS CODOTZ.FHA 11/01/08″. The note in term 6 deals with borrower’s failure to pay. It states:
“If borrower defaults by failing to pay in full any monthly payment, then lender may, except as limited by regulations of the Secretary in case of payment defaults, require immediate payment of the full principal balance remaining due and all accrued interest. Lender may choose to exercise this option without waiving its rights in the event of subsequent default. In many circumstances, regulations issued by the Secretary will limit Lender’s rights to require immediate payment in full in the case of payment defaults. This note does not authorize acceleration when not permitted by HUD regulations. As used in this note, “Secretary” means the Secretary of Housing and Urban Development or his designee.” (emphasis added).
Frank and Brian;
How about doing a show on “cash for keys”? My wife and I are going to a foreclosure sale on Wednesday and the TENANT has already told us “He doesn’t really feel like moving out”. It doesn’t matter that I want move my family in as our primary residence, or that I’ll have two mortgages until I can sell our existing home. “He shouldn’t be inconveinenced”. According to what I can find online and talking to an attorney, he can stay for 90 days because “He’s a victim”. He moved into the house when it was listed, let people show/view it and now that it’s a foreclosure, wants to be PAID to move out. Any thoughts?
I’m in AZ. the cash for keys to leftover occupants has gotten a little out of control. that said, if you bought at a trustee’s sale, you should be able to file (or threaten to file) for a forcible detainer in your local justice court. check with the brokers and investors doing the trustees sales everyday. document what is in the property now, introduce yourself to the neighbors. let the occupant know that squatting is working well for those houses foreclosed by Fannie Mae, but that you don’t have the American taxpayer backing you up so they need to get themselves into another foreclosure house and try to do it all over again
tom
While I have sympathy with people who have lost value in their homes, I have always felt that if you can afford to pay, you should pay. There may be a few borrowers out there who actually were made victims by the banks with their ARMS and other Sub-prime Loan products, but the majority of the people who are not paying now are doing it because they have lost value. It isn’t that they can’t afford to pay, they choose not to.
That does bother me but it is typical of the thought process of many people today. Someone owes me something, someone should make this okay for me, I have no responsibility for making poor decisions, someone should have protected me. Or, better yet, how about, I bought this because I thought I was going to make money, now I’m losing money so I don’t want it any more. It’s all about instant gratification and wanting it all now!
I may be dating myself but I was raised that I made my decisions and I had to live with those decisions. If I couldn’t meet my obligations I was going to lose whatever it was, be it a car, a house, a house full of furniture, or whatever.
I may sympathize to a degree with people who have lost jobs or had health issues and really can’t afford to make their payments. I have a problem with those who just choose not to pay because they simply don’t want to obligation any more. I agree with Brian and Frank, you signed the note, you agreed to pay, so either do it or get out. The banks are right, they have no obligation to modify anything, they have the right to take the property away if you don’t pay for it.
I know you guys are smarter than what you are saying. Contractual obligation, Yes!! Let’s talk about that. The holder and owner of the note is the only one who has the right to foreclose. When the note is paid they no longer have the right to foreclose. When a note is securitized, the note is converted to a security which is sold to mutiple owners. They would normally be the ones with the right to foreclose, but, they can’t because no one person or entity owns the note. Most of the securtized notes were destroyed. That is why so many are being forged by the servicers who are pretending to be lenders. Securtization audits are showing the note has been paid!! If I paid your note off would you like it if a pretender lender came and tried to foreclose on you?? How many Troubled Assets (loans) do you think were paid off by TARP (Troubled Asset Relief Program)?? How many investor who purchased securties were paid through the guarentee’s made by AIG?? How can homes be foreclosed when the note has been paid?? By deception, deciet, fraud and theft! That is how!! Wake up boys!!
Not everything is as it appears to be!!! Deadbeat homeowner?? How about deadbeat Banks and courts???
Here’s a site created by very conservative people who are awake and aware of the fraud created by fiat money and the banking industry who are helping homeowners legally fight foreclosure:
http://www.HomeownersJustice.com
BEWARE THIS POST IF FOR SEIU UNION. VERY “Conservative” PEOPLE???, this is a community organizer union infultration. do NOT click on this homeownersjustice link, it is a false SEIU planted link.
BEWARE OF; New Paradigm says: Here’s a site created by very conservative people who are awake and aware of the fraud created by fiat money and the banking industry who are helping homeowners legally fight foreclosure:
http://www.HomeownersJustice.com
this is SEIU union scam-beware!
Frank & Brian – you and your anti-homeowner attitude seem to forget the banks got bailed out by American homeowners (and non-homeowners) to what? Remember the reason for the bail out? All together now … AVOID A FORECLOSURE CRISIS. Did they use those funds to help avoid a foreclosure crisis? No. They used those funds to get richer, at the expense of the … lenders called taxpayers.
Part of the mortgage terms are that homeowners use the property for the intended purpose. If the borrower destroys the property, he is in default. But corporations didn’t sign any promises with the American people so I guess you think it is okay they destroyed the economy and failed to use the bail out to avoid the foreclosure crisis, huh?
It is so sad that you guys have (intentionally or unintentionally) turned into agents of the elite, the propaganda arm of the banks with the real estate community. And when the huge inventories you mentioned manage to create more homeless, values will fall again, making the new homeowners upside down. Then them mounting number of unemployed people will continue to rise and more people will get foreclosed on, profiting banks. These people will no longer contribute to taxes or the economy, falling into poverty. More people will lose their jobs and homes … and the banks will keep making huge profits off foreclosures.
But the good news is that because you played a key part in the brainwashing of our industry, you’ll have lots of money to buy up these foreclosed properties and rent them out to the few survivors, protecting your families and friends with absolutely no compassion for humanity as a whole.
The point of the bailout was not to avoid a foreclosure crisis, it was to avoid a complete collapse of the economy! That was accomplished by propping up banks and investment firms who were taking huge losses from derivative investments that were based on packages of mortgages that were dramatically losing value because they contained toxically bad sub-prime loans that people were defaulting on in record numbers.These loans should never been allowed and should never have been packaged into these derivative investments with A++ ratings. This was all allowed because of the de-regulation of the banking industry under Reagan,Bush Sr., and Clinton led by the Republicans and their cry for “less government interference. The banks were basically allowed to do business with very little government regulation and we can now see what the result was. It’s the same result they had that caused the “Great Depression” which led to the banks being heavily regulated in the first place. Those who do not learn from history are doomed to repeat it and this is a perfect example.
We should treat this like Major League Baseball’s steroid scandal. Everybody did it and everybody is guilty. Put in place ‘tests’ to prevent a reoccurance and move on.
I think the bigger problem for the future of the industry is the paradigm shift in attitude by future buyers. Defaulting on a contract for a residential deal is now like it’s always been on commercial deals: If it fails, walk away. This will translate into higher rates to account for higher default rates.
I believe we need all go back to cash & carry to show the banks who is boss. Remember when Washington Mutual in black & white blamed the loan brokers for the bad loans??? Like their UNDERWRITING DEPARTMENT wasn’t the one with the final say…
People are fed up!
What I would like to hear more about is how all these defaulting property’s are doing about paying property TAX & how that fits the economic equation. What % are paying that verses not??? Seems the things that property tax pays for are all going down, except for cops, who now seemed to be more obsessed with being revenue collectors, rather than being there “to protect & serve”… Is this my imagination or are they saving their jobs because of this lovely market?
Please let us know what % of defaulting homes are also not paying their property taxes – that is also interesting.
I would like to hazard a guess, and I am probably incorrrect, but a foreclosed home tax bill will probably be foisted off on the defaulting taxpayer….the borrower…..the banks will probably get their Yes men in DC to force the politicians in their pockets to agree. Its so easy for them as they have already paid the politicians 30 pieces of silver for their services by contributing to their cmpaign coffers….
I can’t believe all the misinformed opinions on here from people who are supposed to know what they are talking about! Yes, there are tons of foreclosures still coming thru the pipeline. The huge majority of them are because of shoddy subprime loans that were sold to people by unlicensed, greedy, loan officers who’s only concern was the “quick buck” and with no concern for the customer (should we say sucker) and certainly no concern for the damage that might be done to the economy if and when these loans defaulted. You can blame the big banks and investors for providing the products but where is any personal ot moral responsibility here? Anyone with common sense could see that getting an interest only loan for someone for $300,000 that makes $30,000 per year and has a credit score of 580 can’t end well for them or the investor. But the broker and loan officer got paid and are long gone! And don’t try to blame this all on Freddie, Fannie, and Barney Frank. We all should be aware by now that those loans represent a small percentage of the total foreclosures, nowhere near subprime’s numbers. That’s just a smoke screen to point the finger away from the most guilty parties!
As far as “getting it over with” what you are saying is that you are in favor of a second and far worse economic collapse, a minimum 25% unemployment rate, and millions more homeless people, not to mention the elimination of the middle class altogether. I don’t see that as a good alternative at all! The way we are right now is torturously slow but it sure beats the alternative.
@commenters who disagree. Can’t believe how far the moral compass has changed. If you borrow money you pay it back. It is common knowledge that markets go up and down and anybody knows that. Home values go up and down. I agree there were greedy loan officers out there, but you can’t say it is just their fault, our just the banks, or just the borrowers. Everyone is to blame, and everyone is responsible. GROW UP AND TAKE RESPONSIBILITY!
When have real estate values declined like this?
Never, it’s worse than the “great” depression, which was also created and extended by inept govt. involvement, regulation, strangulation of a supposed “free” market. Way to go Bush, Dodd, Frank, Pelosi, Obongo, etc. etc. etc.
You have got to be kidding me! Learn your history before you start making ridiculous stements like that! The Great Depression was not caused by government regulation! There was no government regulation of the banking industry back then. Back then they believed that the free markets would regulate themselves. It was after the banks all started collapsing and people were all losing their life savings and their homes that people realized that the banking industry could not be trusted to regulate itself and more government regulation to protect the public was instituted. The bankers can’t be trusted and the only group big enough and powerful enough to protect the public from them is the government. The crisis we are in now was not caused by government regulation but by the lack of it! None of this could have happened until the banking industry was deregulated by a series of Republican bills in the 80′s & 90′s. They cried that the government needed to stay out of business regulation and allow a “free market” and now we can all see what the result was. A market totally driven by greed with no regulation is not good for anyone, especially the general public.
T.J. I will mirror my response to Katie, but since you are a “realtor” I’m guessing you have no stake in this mess because you or your colleagues never pesterd a loan officer to find a way to make the deal happen even though you knew full well the buyer could not afford the house you sold them.
I guess I took advantage of people when I explained to them in length that their 3 year fixed mortgage will go up 3 points (while giving them the future payments)and they responded by “I’ll sell the house by then” or when they responded by “I’ll be in a better financial position by then” or when they responded by “I’ll clean up my act and refinance to 30 year fixed by then” ……..I can give you a list 2 miles long of all the excuses……but then again why would you believe me since I’m the bad guy I am totaly responsible for creating this mess.
T.J., you need to get your head out of your hind qurters and see the reality of people’s greed and the basic desire to live beyond their means along with Wall Street’s greed that created unsustainable products. Unfortunately, a good deal of these companies are long gone and can’t be taken to the woodshed as a result, but originators are still here so let’s bash them. Do I have that right T.J.?
TJ, it’s hard to believe all the people that think they are informed. First, subprime only made up about 11% of all the loans written at that time (depending on time frame used). Second, to place blame on ‘greedy loan officers’ is incredibly naive as is painting with such a wide brush. Do you blame stock brokers for the dot com bust because they were there to take orders and got paid for it? Or was it just that bust exclusively which the investors get the blame? Oh there were plenty of warning signs to buyers, ‘irrational exuberance’ (a phrase made popular by Greenspan at the time which should have been used as a warning by all), and as early as 2002 the word ‘housing bubble’ was a household word. Have you ever heard of the ‘herd’ mentality? Maybe you should work on a way to fix ignorance.
11% of all the loans written is irrelevant. What counts is what percent of the defaults were subprime! Don’t try to cloud the waters with mis-information. Your excuses are the same one’s the drug dealers use to salve their consciences by saying they are merely supplying a product that their customers demand. Again, no personal moral resposibility at all! I am not trying to blame the subprime brokers alone. Their is plenty of blame to go around including the consumers who thought they could get a free lunch, as well as the investors and banks who allowed the ridiculous loans to happen.Again, I think the lesson to be learned here is that some government regulation is needed in many areas of our lives in order to protect the public from disasters like this. We learned it after the last Great Depression and then over the years nothing really bad happened ( because govrnment regulation wouldn’t allow too much risk by the banking industry) and people forgot how bad things could get without the regulation so when Republicans and those who represented the interests of the bankers (again, not the public interest) cried out against government interference in business enough people bought it and the industry was deregulated. Now we can see the result. We are all living it!
Enough already with blaming the mortgage brokers. They didn’t approve loans, the banks did that. The brokers are all leaving the market anyway because they were the punching bags of the entire world. Sub prime loans were a drop in the securitization pool. Even credit card accounts are securitized. The economy is on a downward spiral and we aren’t even close to the bottom yet. Blaming the mortgage brokers and dead beat homeowners is yesterday’s news. Public anger is growing, along with disillusionment and dismay. What will it take to fix this mess in which we ALL find ourselves? Pointing fingers and name calling wont fix the sinking ship. Why not have every loan in the country reduced by half. Payments too… what effect would that have on this economy? Why not give every family in America $500,000. Would that help the economy? Why not bail ourselves out? We should all have to pay taxes on the money and pay off our obligations…. but with our slates clean…. we could start over again… Why not come up with some ideas to help ourselves?
Frank and Brian,,
after reading some of the posts, I am dissapointed. I agree with both of you on this and here is why… I still make my housepayment at 5.75% interest rate, (can’t refi, because i am SELF EMPLOYED) and struggle to do so sometimes, like everyone else. I try to live on a budget, so that I can make my housepayment because, to me, its the most important asset that I have. I don’t understand why everyone thinks they deserve a mortgage modification? Is it fair to the rest of us that are STILL making the payments that we agreed to on the note at closing, to have to pay FULL price for our homes? Is the principle reduction program just for homeowners who haven’t made “making their housepayment” a priority.
It seems crazy that homeowners think and assume that the banks don’t OWN your home! If you didn’t pay cash for it,, you borrowed the money to purchase your home. That means in really SIMPLE terms, that the home you live in, is an asset of the bank. Its not your asset until you pay off the loan right?
I am doing a ton of short sales right now and agree the end is no where to be seen right now.. Lets get this thing over with (the ax) as the recovery over a long period of time is bound to create more damage in the long run for EVERYONE!
And people wonder why there are strategic defaults… If I were in that position, I’d consider not only walking away, but faking my own death so they couldn’t come after me… or maybe it would happen the other way around so there wasn’t any suspicion about walking away. Then I’d go live in some other country illegally for a while since so many believe that seems to be such a great solution to their financial problems. Then, when the dust has finally settled and everything is back to 1936 prices, I’ll come back with the fortune I’ve made in that other country under an assumed Muslim name and stolen SSN from Connecticut and just buy up everything I can get my hands on with cash and the banks won’t have anything to say to me about it ever again. This is how to live happily ever after. Maybe I’ll even run for president, who knows…
“Click the post title above to see today’s video!”
Several days have clicked on red title in email. It takes me to safari browser on my iPod. The page at the top has the title in black. In blue text under it Is the phras ” Click here to go to comments. ”
Then a big blank space.
At the bottom of the page it starts with “Click the post title above to see today’s video!”
No video to play on my iPod.
Just the other day in a conversation I said — all these additional things the feds are doing to encourage loan modifications is simply delaying the inevitable, especially until the employment/underemployment situation is resolved.
What you don’t know that you don’t know is that once the Note is sold to a Servicer, the LOAN HAS BEEN PAID OFF! What you also don’t know is that there is not a Note in this nation(with the exception, perhaps, of the most recent loans) that is SIGNED IN WET, BLUE INK BY BOTH THE BORROWER AND THE LENDER, therefore….THERE ARE NO CONSUMATED LOANS to FORECLOSE ON. LOOKS LIKE A LOT OF FRAUD and VIOLATION OF FEDERAL LAW BY THE LENDERS AND SERVICERS ON THE UNSUSPECTING BORROWERS. Big mess this country is in…..and the smart borrower(far and few between, currently) has the upper hand, if he can educate himself!
As for: “once the Note is sold to a Servicer, the LOAN HAS BEEN PAID OFF!”
No – the loan, note or obligation, debt or what ever name you use, is transferred to the buyer of the note. Basic business; go back to school.
Who is to blame? Sorry, I don’t have time to name everybody or attribute the portion of the responsibility to each. However, I do see bankers as being the most arrogant and greedy in this current mess.
In any event, all will be well soon; we have hope and change on our side.
Good show guys, and yes a lot of homes coming our way. Also a lot of families destroyed, and dreams lost. The banks wanyt us to pay the notes, they also bet they would be to big to fail. let the people speak with their checkbooks. Dont pay the bail out banks overpriced mortgages, just move.
Let them have the house, stick it Bail out banks, you need to be closed down for making toxic products. Driving a market to a bonefire, there was no way to compete in the business unless you playe dby their rule book. Well the people are speaking now, take your crape note.
The next President should break up the To Big To Fail Banks.
If the bank is willing to take 50% less than what is owed on short sale properties then why would’nt they just modify the loan for 5 year balloon so that they can get the payments while it is for sale … would this make more sence than getting no money at all???
Kim, excellent point. That would be a common sense solution, and banks have no common sense, or the ship is too big to make such a common sense move.
I believe that everyone should stratgically default and send the market way down and send the banks packing. Frank and Brian, I enjoy listening to you guys but you miss the boat here. Dont you know that with current invetories, the market WILL fall for years. This problem is so large it is not even funny. I now have clients who where in default in 2008 and 2009. The banks are getting what they deserve. I was a real estate developer in Vegas who played by the rules. Because of the faulty fraudulent lending practices of the banks, everything I built for the last 22 years has been destroyed. I have taken a fall that was not created by me. I was taken down because of the banks. Now they have taken my tax dollars and used it to beat me over the head with it. I say let the banks fail and the sooner the better. It is a slow death either way they slice the pie. Their is no way out of this one babby. The ball rolling down the hill is way bigger than most people want to admit. Why would you Modify your loan, when it is worth half of what you owe. If you modify your loan, you are saving the banks from taking the loss. I say let the market fall baby fall. So we can all get back to what are grandparents think. PAY CASH for everything. Wow imagine that. I the market falls for five years. I can build my wealth and pay cash for a home!! When I do this then I send the biggest message to the banks to go pound sand:) By the way Fanne Mae and Freedie Mac are not interested in doing shorts sale. You should do video on them. We work short sales daily and consitently the BPOs come in Way higher than the home is worth. This being the Case Fanne Mae and Freddie Mac, want a short sale on your record. Even though those bad boys are burring our tax dollars. Frank and Brian are right. They could care less about you, your kids, your family or your credit. These guys are thieves and crooks just like the rest of the banks.
Craig, I feel your pain and agree, but as long as the politicians are in the banks pockets and the Federal reserve is owned and controlled by the big banks, it’s all just wishful thinking.
You may want to consider investing in rental properties to rebuild your business as that is where I see the market headed.
The site is now pre screening comments , no free press here ….. time for us to bail out to another site . Too commercial now , nothing but ads for bad products
US?
No free press? EXACTLY! We need the ads to pay for the site.
Another part of the underlying problem is that some people think they are entitles to things for free.
Incidentally, the Constitution is about FREEDOM of speech, not free speech as you interpret: no cost type of free.
Hey Paul you moron , go back to fourth grade and stop practicing law like you practice real estate and lending , you blow all of it . Here is the facts from doitright taken directly out of the Constitution , pay special attention to the part about press moron, do us a favor stop your moron comments on here please Paul :
Amendment I
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
Dude, is that a promise??? Please bail out…..pretty please with sugar on top….please.
When you bail out it will give the rest of us an opportunity at a meaningful dialogue without having to sift through your destructive and infantile rhetoric so please bail out. Pretty please.
I am sorry I was only kidding I see how bad you would miss me so I am staying put ! Thanks for showing you care about me and think of me often , doitright
Hey doitright
Aside from always telling people to get out (keen sense of the obvious), you do seem to have a good grasp of the situations. Why not come out from behind the curtain. You seem to have made the transition out and some of us could us the guidance.
Brad Smearman
Hadley IN.
The banks wiped the bad loan “toxic” assetts off of their books but keep homeowners paying on the same toxic amount. This is FRAUD! Making people pay on principle loan amounts that no longer exist on Citi’s books is absolute CRIMINAL. The too big and should have failed banks are OBLIGATED to reduce EVERY mort loan back to current 80% LTV. If the bailout was allowed to reach the owners, this mess would be over with, but NO, we keep paying on loans that are not even on the Citi books!
The loan amount on my “note” with Citi has an amount to pay back. But the “amount” has been wiped off of Citi’s books by the bailout. Doesn’t that mean I am paying on a loan “amount” that no longer exists? Why did the bailout never make it to the customer/borrower? This is fraud at the very least, criminal activity. The banks without a doubt should reduce these mort loans to current 80% LTV since they were paid for the “toxic” upside down loan amount. But they don’t because they want the property. Gov’t owns banks, banks foreclose and steal property, Gov’t owns property, individual liberty and property ownership out the window.
Hi Guys,
I think your foreclosure comments are right on.
Want more relaxed lender guidelines? Stabilize the market. I know lots of private investors that have stopped lending simply because they feel their money is safer under their mattresses. Once they know they don’t worry about forced loan modifications, they’ll come back.
After all, would you loan your money to someone that could legally force you to change the loan terms after they got your money?
Not sure what happened. Wrote a beautiful post and it’s not there.
Here is what I said in two sentences:
98% of you are wrong and don’t understand what occured and what is occuring. I also wrote that I believe Frank and Brian are missing the big picture here, which suprises me.
and you do what for a living Mr brilliant?
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When are you two coming to the Northeast??!! We could use the inspiration up here!
Frank and Brian, great video. I would agree with you under normal circumstances. These are NOT normal circumstances.
In brief, securitization was on its face, a good thing. In fact, it could be said that virtually everything investment banks did was done in order to make borrowing easier and more efficient.
Here is my challenge with wholesale foreclosure; The securitization of MBS pools, led to a need to create more and more borrowers out of thin air, how’d they do it? Ignore standard underwriting guidelines. So what? Well, they did this on such a massive scale, along with leveraging the crap out of these specialized investment vehicles to such an insane level, that our values went through the roof, while creationg bond debt that could not be covered without Federal Governments intervention.
In retrospect, I feel like a fool. Why didn’t I see this coming?
I put my entire retirement on the line as the principle in a mortgage banking operation. I’m a pretty smart guy. I read what Alan was saying. I read the Phd’s from the GSE’s comments and forecast. Like any intelligent professional, I ignored NAR’s economist.
Even Alan Greenspan said he had no idea to the extent derivatives had gotten out of hand.
No Frank and Brian, this is not a normal situation. A market correction would have meant 15% to 20% drop. A 50% to 75% drop from peak to trough is a murder of the bond markets.
Between, the Fed’s, Treasury & FDIC, the mega banks have been lent, or have received guarantees anywhere from 13Trillion to some estimate as much as 23Trillion. TARP was a pimple on a rat’s behind.
We cannot simply tell the homeowners who told the truth, played by the rules and have now become a victim of circumstances beyond their ability and control, to simply eat cake, but be sure and pay your taxes cause we just placed Trillions more on top of your mortgage that you owe.
Had they understood to the extent that the system was putting so many un-qualified buyers into homes, artificially driving up prices 200 to 300% from 00 to 06, they might not have bought in the first place.
No, it is far more complicated. For many, this was done to them, not by them. Not everyone took out an equity line, bought a Hummer with matching wave runners with zero ability to pay. Not everyone took an Option Arm at 1% hoping to flip by phase four. Some had no idea to the extent this was going on.
Sadly, these are the ones who receive the least amount of assistance due to the social agenda of many counselors and the dumba## way the HAMP guidelines were written. Throw in a Pooling & Servicing agreement that in the words of the Federal Reserve Bank of Boston; …”appears to create a perverse incentive to delay and then foreclose” and you have what we have today.
So much to say on this topic. You need a bottle of whiskey and I’ll need a bottle of Isosceles to finish this. Bottom line, this is all going to take time as the RTC established accounting rules have been set aside and they (Banks) are simply managing their portfolios. The banks know they’ll get most of the modified loans back, but they are staggering them via the modification process so they don’t get them all at once. Just read the HAMP guidelines. After five years the average payment goes up from years 6 to 8 about 30% (After a modification, the average back end DTI is 62%). If household income fails to go up commensurate with their house payment, which it won’t, they will begin the process all over again.
It’s a wonderful world we live in.
Of all the clients I’ve worked with no one has had a successful loan modification. No one. And tha’s very very sad as the banks get PMI for their loans. What happened to the money they receivd as bail out. Surely all of it didn’t go to the employees and chief executives! Somehow our nation has gotten quiet about their justifiable outrage at bailing them out so they could restructure a bit and help the little guy. Is it because we all neeeed the banks? I don’t know the answer. I just know that it’s challenging to get the word out that there IS help for folks with a distressed property and they don’t have to pay for it up front any more.
I am sorry for the “DECLINING”system we are in… I think same way they are not willing to work out with those families that “really need it”, let’s implement the campaing “SHOW ME THE NOTE”". .. and in some cases stood them grouund in court…
Oh I guess most people are pissed about not getting a MOD but the banks wanting to foreclosure because they sell the house at a greatly reduced amount anyway and could probably have done that for the homeowner, with a decent rate, and avoided the entire mess altogether.
Frank, Brian – Just get it over with? That’s rich of you. People were grossly taken advantage of by, now get this: UNLICENSED LOAN OFFICERS, ORIGINATORS, (WHATEVER YOU WANT TO CALL THEM). In short? The industry who wants to do all these foreclosures set them up themselves through shoddy policies and LO’s who weren’t required to be licensed. I don’t want to hear about appraisers or realtors who had to be licensed. They don’t make the final decision and loan the money. I am both an appraiser and a realtor and I was stunned during the boom of how loosey goosey the requirements were for people making an aggregate of $60,000 a year, for example, to get a $400,000 home!
The industry caused this and they should be forced to be part of the solution. Otherwise? Screw ‘em and let them fall apart. Maybe what we develop in their wake would be much better than we have today.
Katie, if you were concerned about YOUR CLIENT purchasing a $400,000 home with $60,000 in income, why didn’t you speak up? And don’t forget, for one second, who it was that offered the loan programs. It wasn’t the loan officer, it wasn’t the loan originator, wait for it……..IT WAS THE BANK.
And now that Loan Officers that work for a Broker are required to be licensed, passing a national exam as well as a state exam, are you still sending your business to a Chase LO, or a Wells Fargo LO, or a BOA LO? Because last I checked, they only had to be registered with the NMLS. No testing, no licensing.
So if you want to complain about unlicensed loan officers causing this mess way back when, then I would suggest you start complaining about all the unlicensed LOs that the big boys are harboring. Otherwise you can get off your high horse and send you next deal to that LO at Chase that couldn’t get licensed with his old broker (background check, couldn’t pass the test, etc.).
This site has become filled with ignorant people.
Of all of the loans that defaulted during this “meltdown” period, have you checked to see how many were first payment defaults? Have you looked to see how many were paid on time and only defaulted when the adjustable rate feature kicked in, raising payments greatly at the same time the most fundamental element in life trippled in cost (oil)?
A bad loan is a first payment default loan, not a loan that was paid on time for years that later defaulted because the borrower coud not afford a higher payment when their whole entire life became more expensive because of the price of oil trippling and raising the cost of life.
The fraud that took place was speculators driving up the price of oil and not having that price based on supply and demand. From there, it was a snowball effect that made the cost of living tripple and the average, broke american simply can’t afford a life that is 3 times what they were borrowing to afford anyhow. It is all simple math and the numbers don’t balance and when it happens on this scale, catastrophic events result.
We will not be able to move past this until everyone starts to realize that the price of oil is what changed the world, not the housing industry. The housing indsustry collaspe was a result, not the cause of a much bigger problem.
Oil is the most fundamental thing in human life as we know it,it effects everything and we will never recover with overpriced oil unless we find an alternative energy source or find a way to get the price based on true supply and demand.
I guess I took advantage of people when I explained to them in length that their 3 year fixed mortgage will go up 3(while giving them the future payments) points and they responded by “I’ll sell the house by then” or when they responded by “I’ll be in a better financial position by then” or when they responded by “I’ll clean up my act and refinance to 30 year fixed by then” ……..I can give you a list 2 miles long of all the excuses……but then again why would you believe me since I’m the bad guy a am totaly responsible for creating this mess.
Katie, you need to get your head out of your hind qurters and see the reality of people’s greed and the basic desire to live beyond their means along with Wall Street’s greed that created unsustainable products. Unfortunately, a good deal of these companies are long gone and can’t be taken to the woodshed as a result, but originators are still here so let’s bash them. Do I have that right Katie?
Didnt these banks receive funds to help them in exchange for increasing their commitment to doing more loan mods? They need to follow through on the addendum to the note, right?
Numbers don’t lie, people do. I have been telling California REALTORS through my workshops for 3 years that this was much larger than the media, government, or banks wanted anyone to know. Everyone jumped on the REO Workshops in 2008, 2009, 2010. In 2011 we can not even get one REALTOR Association to host a workshop because they incorrectly think the foreclosure crisis is over. They are too busy giving warm and fuzy HAFA Classes and we all know how successful HAFA has been. Nice to see our local Associations are right on top of their clients (REALTORS) markets. Wake up and smell the coffee gang Frank and Brian hit it on the head once again. I am so busy with my REO Accounts that I actually had to open a new branch office to service one of my bigger accounts. This aint over by a long shot.
Heh guys, this is off point. I have loved you for years but I am not watching you as often since you have added so much advertising in/on your actual video. My opinion is that it really distracts and reduces your credibility. I understand you are in this for the money, too, not just to inform and entertain us while delivering the dreaded news, but I wish you would rethink the video advertising and leave it to the sidebars. I teach TREC classes and previously always recommended you to my students, now I am more hesitant or I apologize for your advertising and ask students to try and get beyond the ads for your message. Just my 2 cents, thanks.
Totally agree. Lets end this whole mess. I do feel bad for anyone in this situation, but a deal is a deal. I personally know people who have been living in their house for free for over 2 years.. As my Father preached to me when I was younger. THERES NO SUCH THING AS A FREE RIDE.
AMEN
“A deal is a deal’? The “deal” went out the window when the Banks took $ (Citi took 600 BILLION) to rid the bad underwater $ from their books but didn’t correct the loan with the borrower. This was not the “deal”. They wiped it from their books but keep us paying on a loan amount that is no longer on their books. Criminals all of them!
It’s time to find lenders with programs like HomePath ( http://blog.amerifirst.com/amerifirst-news-room/bid/53397/Ridding-Neighborhoods-of-Foreclosures-with-HomePath-and-AmeriFirst ) and Rural Development and FHA 203k mortgage options. Good luck to the folks with problems. But it seems like quite a buyer’s market!
The only person who can foreclose is the owner of the note. Notes have been sold, resold and sold again and again. When Chase foreclosed on my home, they did NOT still own my note. They CHANGED a lock on my home. The Notary had her license to Notarize revoked. And the day before I went in for my final day in court, where the judge gave me 60 days to vacate, CHASE sent me a loan modification package that would have ADDED over $40,000 to my debt. A few short months later, after my taxes were already completed, CHASE sent me a 1099 for $206,000. Claiming my home at the time of Foreclosure was worth $238,000. Now why didn’t I know the home was worth THAT MUCH? I was only the leading sales agent for the builder! Home value at time of foreclosure was about $150,000. It sold at auction for $105,000. I paid $256,000.
ONLY THE CURRENT OWNER OF THE NOTE CAN FORECLOSE. Not the loan servicer or MERS.