Is it greed, or is it just me.

You have to remember the bank may not own that loan and may only be servicing it.  For some reason this country has "villanized" the banks.  Has anybody thought about the alternative had the banks not been bailed out?  The money in the banks (deposits) belong to hard working Americans.  Would the FDIC had been able to cover all the deposits had those banks failed?  It could have been catostrophic.  Why do I deserve to lose my life savings because so many people lied to get a home loan?  People put their money in the bank and the bank uses it for investments and loans.  When people lie to get these loans, the depositor like me is the loser.  Why should I reward bad behavior?  I was with a young family for an eviction recently.  The daughter told me her car payment is $700 a month for 5 years.  These people have over extended themselves.  Why is it the bank's problem that people assume there aren't going to be hard times.  Anyone who has worked over the last 30 years knows there will be a recession.  I watched a lot of younger people throw caution to the wind as they bought expensive cars and homes.  Now I see them losing them.  I also watched them refi them over and over again or get a HELOC and spend it on toys.  So sorry, no sympathy from me.  You need to go on a few foreclosure/evictions and when you drive up and see $100,000 worth of cars in the driveway, you will see what got people in this mess.  In my opinion, they are the ones who were greedy.  Had they not been so caught up in having things they could not afford, the rest of this country would not be paying for it.  There are very few exceptions.  So no, the bank is not being greedy.  They are just protecting people like me because when all of this started, I pulled  my money out of Bank of America as I no longer trusted I would get it back if I needed it.

Exactly, business is business. However, it works both ways, the banks and the homeowners. So, banks ought to comply with their end of the bargain and go ahead and foreclose on those condominiums with defaulted mortgages, instead of leaving them lingering, just because it is not a good business for them. A deal is a deal for both parties, and the condition for the mortgage was '... and if you don't make the payments, we will take the property away from you... little that they thought the property was going to loose more than half of its value, so... now they don't want to meet their end of the deal, that is, foreclose and keep the condo!!

Greed.  Corruption.  Mortgage brokers, Realtors, appraisers - made a lot of money in the sub prime market, all motivated by greed.  When all the ARMs and zero interest loans started adjusting on those sub prime loans, the bottom fell out of the housing market.  When the government stuck it's head into the industry and began forcing lenders to give loans to people who never should have received them, they opened the flood gates to rivers of greed and oceans of corruption.  Now, our Country is paying in spades for something that was totally preventable.

It is beyond my comprehension why banks do not renegotiate some of these extremely high interest mortgages, and allow people to stay in their homes - especially in hardship situations.  It makes no business sense to me why a bank would willingly allow a home to foreclose, and be stuck with an empty property that's value is far below market, than to reduce an interest rate and get a monthly payment down to a reasonable and fair amount.  Imagine how quickly the housing market would recover if lienholders lowered the interest rates on mortgages for those in financial distress!  Modifications are the answer - I only wish I knew why they have not been successful and why they are so difficult.

I believe firmly in personal responsibility, and that we must honor our commitments.  However, what happened in the housing market was not the fault of the people obtaining mortgages - it was the fault of the lenders who allowed "NINJA" loans, ARMs and zero interest loans - and rolled closing costs and additional money into mortgages that resulted in inflated home prices. 

I know my Realtor colleagues will cringe, but I believe every person purchasing a home should be required to make a down payment - you need to have some "skin in the game".  If you can't save before you buy the house, you're not going to save after.  Then, when a crisis arises or a major repair is needed - and we all know that's inevitable - the homeowner falls behind and the trouble begins.  Also, buyers in the past have been encouraged to purchase homes at the very top of their affordability level.  I follow another path, and encourage my buyers to purchase more conservatively so they are not "house poor."  

The American Dream is attainable - however it is not an entitlement and must be earned. Homeownership is a privilege, not a right or entitlement.

Ooooo, Marcanne, #158, lenders ultimately decided whether TO or NOT TO loan money to people.  If they were really looking out for us depositors, wouldn't they have spotted the $700 per month car payments, high credit card debt and slow payment history and NOT have made the loans?  It was THEIR JOB TO DO SO!  They failed.  Why?  Greed.  They wanted the fast easy money and KNEW that if the economy clunked you and I would be their fail safe.  After collecting mortgage insurance on the foreclosed property, principal and interest payments for how many years prior to the foreclosure, upfront origination fees and back end sales fees for selling the loans they made plenty of money in the transaction.  LENDERS were the professionals in the transaction that had the power to say NO to deadbeat borrowers and they didn't do it.  So much for looking out for you and I.  Don't give them a pass on this one, they knew better.

Steve, come on.  They falsified their W-2?  Fraud, then jail.  Let's say everyone who defaulted on their mortgage in the last year falsified their W-2 form.  Did they also falsify their past two years tax returns, did their employers also commit fraud by lying when the loan officer called to confirm employment and income? Here's one:  when the banker checked balances in the borrower's accounts and found NO MONEY there, did the thought occur to them that something was wrong?  The fact is, they didn't check.  They didn't want to know too much because that could cost them money by not making a loan to someone.  They gambled.  They lost.  We paid.  One last statement if I may.  The heads of Fannie Mae and Freddie Mac recently asked the government for an additional $18 billion in subsidies.  These same heads are making bonuses of $5 and $7 million annually respectively.  Does that sound like someone who is taking responsibility for any of this?  Lenders could fix this problem tomorrow by writing down loan balances to market values then charging a higher interest rate to the homeowner who would get to stay in the home.  They won't do it because it's easier to sit back and take our money for their abject failure. 

Steve #166, lenders and borrowers are BOTH responsible.  However, I don't see borrowers lined up with their hands out for any of the over $1 trillion in bailout money given to financial insitutions because of their bad decisions.  You won't see any lenders staring at their reflections in your hypothetical mirror, they're too busy spending your bailout dollars.