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Mortgage Aid - Why Didn't We Help These Folks Instead?

Everyone is talking about the bailouts and bills that are moving through Congress. They will spend our taxpayers money to rescue banks and lenders that made risky loans to unworthy borrowers. So why the big to-do? Banks that made bad loans should pay the price, and so should homeowners that got themselves into a real pickle. It is not the problem of the citizens of the USA. If the banks fail, it is the price of bad decisions, and it is a norm in capitalism. Healthy and smart companies survive, not the losers.

If as a nation we have become so magnanimous what about all the others that will not be helped in rough times not of their choosing? What about a helping hand for those that have worked all their lives, not missed a payment on their taxes, never took a vacation, and now they are laid off or have no hospitalization. Suppose their spouse had cancer, and they have exhausted their medical and hospital coverage? What about those dying of AIDS? Will we cut them a break? The answer is no. Chances are that is you have gone up against hard times in life and applied for assistance or food stamps the answer you will receive is "No, you own a home!" You are ineligible for aid if you lived a responsible life.

So where does the US Congress get off placing more taxpayer money at extreme risk making such offerings? Reduce the principle, extend the terms? This is a bank bailout disguised as an assistance for the consumer. Since when does the government care? No one else has ever gotten that treatment in spite of having to make a 20 or 30% down payment years ago. There was no subsidy of the 16 and 17.5% mortgages...now we are sushing to the aid of no money down bad risk borrowers? I have a major problem wiht this,a dn I will be calling my representatives tomorrow!

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Posted by Jim Crawford ~ Atlanta Real Estate-ABR E-PRO on 05/07/2008 10:14 PM

Comments (37)

mortgage aid, mortgage assistance, congress, congressional bill, taxpayers money, defaults, workouts, mortgage terms, mortgage workout

Originally posted at: Atlanta Real Estate | Atlanta Housing News for Real Estate: Mortgage Aid - Why Didn't We Help These Folks Instead?

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37 Comments on Mortgage Aid - Why Didn't We Help These Folks Instead?

MAY

2008

Jim I like the idea you have on Mortgage aid. It sounds good. Maybe you should go into politics.

Let me weigh in just a moment. Thirty per cent of the foreclosure proceedings in Cape coral florida are for homesteads. Now the other 70% I don't care about. Banks were letting "investors" with 625 credit scores put down $1000 per home and finance up to 10 homes with no more money due until completion of construction. I have little sympathy for the bank or the "investor" nor for the builder who jumped into it. But homesteads are another matter. Many of these people are "collateral damage" because banks have refused to bend when ARMs jumped in rates or when layoffs put the breadwinner in a bind. I'm sorry, but I have some issues with throwing thousands of homesteaders out on the street. Thousands just in Cape coral, Florida. That creates problems that we will all pay for for a long time. More empty homes, for one thing. I'd rather see these folks get a workout on their loan and stay on the tax rolls instead of going on the dole. And I don't say that the govt has to put tons of money into the deal. FHA can insure the loans and "encourage" the banks to do workouts. Right now I don't know of ANY major bank that is doing workouts.

Abiud (Abi) Montes No, I do not respect politicians.

Jim, you are preaching to the choir my friend. There are so many in need that should be helped, but it seems as though our great representatives are looking the other way. Help now, talk later!

Jim Gibson Cape Coral Florida Golf course Homes The banks would do workouts with someone else's money...yours! We should be calling of investigations that the homesteaders values are collapsing due to mortgage fraud. Why aren't the lenders going to jail? Over 70% of sub primes from what I've read about are fraudulent. Those that are guilty are those that obtained mortgages, and those that gave them.

So what about the homesteaders that purchased homes in Cape Coral on their retirement? Their taxes probably became inflated, they are living on a fixed income...who helps them?

Ray Nellum, Fort Smith Real Estate No, it is election year. Bail out the banks! It has nothing to do with the individual. I cannot believe how naive Americans have become.

Desperate times call for desperate measures. Had the Federal Reserve not bailed out Bear Stearns the banking system would probably have collapsed and then chaos throughout the world... yes, it almost really happened, but the credit markets and banking system are not fixed and are in a precarious situation. The bailout for the "undeserving" has more to do with "for the benefit of the county and the banking system" than helping those who made poor decisions who during normal time should have lost their money. Just as annoying are these "stimulus" checks being handed out by our government to those who aren't rich and the government is planning more "stimulus" checks in the future. We are navigating a financial tsunami which could send us into a depression. We ALL pay for all these financial blunders via inflation, but is that not better than by having poor people living on the steets who will eventually rob from you to survive????

I find that the reality of the situation in my area is that for the most part people who are getting foreclosed on put little or no money down on the property, could never afford the payments or the maintenance, stop paying n the mortgage and LIVE FOR FREE for 6 months to a year. Generally these "homesteaders" that should have remained "renters" just got a year of free rent in a single family home and that cost plus the cost of foreclosing, re-selling and then possibly bailing out the poor banks who accommodated this temporary upgrade in rental property will be borne by everyone else. . .

Phil I understand your points, but I disagree. Responsibility should be at every level, corporate, individual and Government. It seems to have died a long time ago. Prices need to reset so we as a nation can get well again instead of propping up this house of cards.

Nyles Courchesne Massachusetts Real Estate Attorney The picture has really gotten very bad. It is all fraud! I would not even sell a 100% buyer because I knew what the consequences would be. You did not have to be a rocket scientist to know the ramifications. Others obviously did not care. The buck came first.

Jim, there are some interesting comments here. I'm pretty free market. And I'm wondering just how chaotic, long term, things really would have been without the Bear Sterns bailout. When any home goes to foreclosure, be it an investor owned property or a homestead, the impact on the neighborhood is bad. And for the lender, the impact is bad. I, for the life of me, can't figure out why more lenders are not focusing on work outs. Anyway, I find bailouts from the government are not the answer.

Great post, Jim, and I applaud your courage to challenge the issues regarding the government's oversight of high risk loans that should never have been approved. As an example, let's say that I worked for Bailey, Banks and Biddle and knocked over, and smashed to pieces, a fine case of limoge. The company insurance might cover it, but should American taxpayers have to? Loans are products serviced by the banks that provide them. If they default, or get knocked over like the limoge, should the taxpayers have to cover their losses? Since most of the default is among federally funded loans, could it sadly be possible that American taxpayers are placed on some type of constructive notice that if their neighbor defaults on their federally financed loan we become liable for their default as well and face an increase in our taxes or a reduction in some other service, such as government sposored health care, to balance the loss? When I pass by the Air National Guard, and see dozens of jumbo jets, C140's and C5 Galaxy transports grounded during the day, I wonder if it's the fuel costs, if we're closer to the end of the middle-east conflict, if we're running out of pilots, if their hangared for preventive maintenance and annual inspections, or if we're running out of money to back our military power? And then I think of the three to five hundred foreclosure notices a week in Memphis.

MAY

2008

Jim, well said, and I agree 100%! Couldn't have said it any better, great job.

Jim,

As much as they want to say they are helping...over here they aren't making progress ..at least from what I see.

Patricia Kennedy Bear Sterns should not have been bailed out. The Federal Reserve had absolutely no authority to do so. It also had not authority to go beyond its charter and use 30 Billion dollars of your taxpayer money and place it at risk. Also, I've talked to many lenders and attorneys and they advised me that Bear Stearns took on the riskiest of sub-primes. So, it should have failed. We would be that much closer to a bottom in the mess we are in, but hey...it's election year.

David Saks Well on one item...the mortgages in the "end of days" avoided the insurance by doing 80/20, 80/10/10's etc. They banks out foxed themselves. Also the loans they handed out they knew would default. It was like they knew someone was walking into a China Shoppe and would intentionally break a piece of Limoge, and who could they charge for the loss? A weak government like the USA!

Duane Marlink, Rate A Home Thanks!

Neal Bloom-Realtor ® Assoc.-CRS-Weston FL I agree, they are messing it up still. I really feel that I need to start calling my elected representatives.

Thanks again for sharing your valued opinion. This is a mess and will be messy for quite sometime I'm afraid. There are no easy solutions but it's very easy to place blame and there is plenty to go around!

Kathy Fisher Lexington's ePRO RE/MAX Realtor I am really torn between a nation that is not there to help those that earned the right to be helped, and those that are just playing the system. If you can't afford to buy something, don't buy it, and if someone does not have the ability to repay you, do not lend to them. If you do..there are consequences for your actions.

Unfortunately, banks are a special case. I and many others would have preferred Northern Rock to go bust but the Uk government stepped in to prevent the inevitable domino effect which would have ensued with everyone trying to withdraw their money from ALL the banks.

What the politicians cannot admit (though they know it is inevitable) is that we are all going to have to suffer the upcoming recession as jobs are lost and everyone tries to spend less to pay for higher fuel and food costs.

In terms of the housing market the UK is about 12-18 months behind the US - however the credit crunch in August and the subsequent withdrawl of mortgage funds has quickly begun to bite and UK house Prices are already showing YOY falls which will rapidly increase in the next few months.

The latest news is that 150 Estate Agents Offices are closing every week - so I guess we are about to experience what you have been going through for the last couple of years.

Jim, I agree the government let the interest rates drop where it was easy to get money. The banks got greedy and made dumb loans. Now the bank think it's everyone else's problem. I have dealt with a number of short sales and foreclosures and the banks are horrible to work with. they seem to rather lose lot of money going to foreclosures rather then working something out and losing $4000. After dealing with my last short sale deal I now understand now the banks made the dumb loans they did. It not my job or your job to bail out dumb and or greedy people.

Roger Hollingsworth First of all, I love your comments. Many Americans assume that it only happening in their town. Real estate is not local this time around, the only ones that are that foolish to tout that is the National Association of Realtors. This time it is global. The closing real estate offices are not so big here yet, but should occur shortly. There are not enough sales to sustain any type of profit. In some US markets, home prices will hold up better than others. The high flying markets that saw dramatic appreciation are so far the ones that are experiencing the biggest drops.

Keith Zimmer Amen! Greed led the parade of bad loans...should we allow them to get a pass wiht out tax money?

Brave post Jim! I've been saying this over and over to my buyers. I keep hearing "Isn't it sad that all these people are going in to foreclosure and lose their homes?" My response is similiar to yours in that "Hey, my husband and I have bought two houses and we did NOT gamble with our finances or family's future. We played it straight and went 15 year FIXED. For those that chose to gamble, well they lost." Most of my buyers are surprised with my response but 10 out of 10 times, they are like "Well, I guess you are right. They did gamble." Thank you. I'm glad you did this post Jim and I couldn't agree more if I had written it myself!

LaNita Cates Thank you. I recently read a tear jerking story in the Atlanta Journal Constitution AJC the other day about a family that was testifying before Congress about the foreclosure of their home. At first it sounded like they were victims, and then they mentioned that they had an illness in the family and the wife decided to take off from work without pay to aid the relative. So guess what? They stopped paying their mortgage for 3 months...and then blamed Countrywide for not defining their penalty payments clearly. Hello???? Georgia is a non-judicial foreclosure state! They don't have to! You miss a payment, they can foreclose. They did not have to play with these folks for 3 months while someone played a violin in the background.

Item 2...Persons should never buy with nothing down unless you have about 6 months cash reserves. To have taken off to be with a sick relative is commendable, but what about your own obligations? What about hospice? What about local charities? Churches? Etc...? These folks were not victims, they weren't too smart. Whoever would think about not paying hte mortgage for 3 months and not realize there was a consequence for that action?

Jim, well said. The banks are now recouping their losses by keeping what the feds are trying to correct.

MAY

2008

Kay Van Kampen, Broker, Springfield Missouri Real Estate (RE/MAX Solutions) You are so right! Mortgage rates have not followed downward like they should have. If mortgage rates had come down as the rates were reduced homes would be selling right now. The banks and lenders are greedy!

Jim, I LOVE this post. When I was selling in Nashville, I had a buyer that I showed many, many homes to. She stated she was looking for her son. (She was referred by a lender). Long story short, I found her a heck of a deal, and she asked the builder to supply a pool at closing. The lender, builder and buyer met, WITHOUT me...I was NOT invited. At closing, the builder gave my buyer her "pool money". Still no problem. I then realized they had increased the sales contract, without my knowledge. FRAUD. As I was showing property a few days later, I noticed a "for rent" sign in the yard. I called and asked her what happened with her son and she proudly announced she was purchasing it as a rental the entire time, but the lender "has to do it a certain way. BUT, since you did such an excellant job finding me this home, I'd like for you to find me several more. I will need to buy them the same way". I was shocked. I called the lender and was FURIOUS with him. He said it wasn't a big deal. I informed her that she was committing mortgage fraud, but she insisted she wasn't. (She saw it on an infomercial...) She went on to buy a total of 10 homes through another agent.

As I was looking throught the MLS a couple of weeks ago at my old Nashville market, guess what I saw? Low and behold, TEN homes, all short sales. ALL HERS. PLEASE....This lender is still in business and I'm sure she is crying to blues to anyone that will listen.

Sorry for such a long comment, this just really struck a cord with me....YES< help the people that really need the help!

Huntsville, Alabama Real Estate Agent Elizabeth Ramsey Cooper (Remax Huntsville/Madison) People like that need to be behind bars. It is so sad that even most of these bailouts will be out tax money for unethical and crooked investors, and loan officers, and fraud.

Jim, AMEN! What a scum bag. I just checked the local roster and he is STILL in business, now in charge of a very well known lending institution in Nashville. What a joke. His days will be numbered, you would think? The sad thing is, he had a wonderful reputation and was very well thought of. Amazing what some people will stoop to for the almighty dollar.

Huntsville, Alabama Real Estate Agent Elizabeth Ramsey Cooper (Remax Huntsville/Madison) People like that need to have an anonymous dime dropped on them. My regular loan officers did everything by the book, and went out of business because of sleeze like those you mentioned. I would love to see them get what they really deserve.

Jim, I agree with you. You have me on a roll now, checking out her short sales. All homes were inflated it seems. I am considering "dropping a dime" on him. I truly hate to start trouble, but this must stop. She is not above the law either and I noticed several of her loans were with the same lender. You would think they would investigate?

How about making higher education affordable? That would be a great place to put those dollars.

Huntsville, Alabama Real Estate Agent Elizabeth Ramsey Cooper (Remax Huntsville/Madison) I've known many an agent that has dropped an anonymous dime only to say it was not investigated. Who knows? I think to live with my own conscience I would do so. If no one does anything, at least my conscience would be clear.

Sarah Nopp, REALTOR(R), CRS. RE/MAX Four Seasons, Olympia WA (RE/MAX Four Seasons) Yep. So many other places to spend the money other than bailing out the losers, foolish investors and folks that were not smart enough to read a contract. BTW...many of them were too greedy to have a real buyers agent represent them.

MAY

2008

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