Comments on: Why mortgage principal reduction isn’t happening http://blogs.reuters.com/felix-salmon/2010/03/25/why-mortgage-principal-reduction-isnt-happening/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: G8rfan http://blogs.reuters.com/felix-salmon/2010/03/25/why-mortgage-principal-reduction-isnt-happening/comment-page-1/#comment-18801 Mon, 27 Sep 2010 13:51:37 +0000 http://blogs.reuters.com/felix-salmon/?p=3081#comment-18801 If a bank is willing to sell a house via short sale, why not just reduce the owner’s principal? I have a neighbor who hasn’t paid his mortgage for two years, but is still living there. He lost his job, but is now working again (for much less). The bank is trying to sell the house for $100K less than his mortgage and no one is interested. Whay not just reduce his principal by, say, $70k and refinance him with a slightly higher interest rate? Everyone wins, sort-of.

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By: Icanhelpyou http://blogs.reuters.com/felix-salmon/2010/03/25/why-mortgage-principal-reduction-isnt-happening/comment-page-1/#comment-15960 Thu, 17 Jun 2010 06:15:29 +0000 http://blogs.reuters.com/felix-salmon/?p=3081#comment-15960 I found a Private Money Source which I used and it reduced my principal to 80% LTV, yes I now have 20% Equity. No it was not free and yes I had to qualify.
I did it, I was not behind, I did not have to hurt my credit and I did not do a Loan Modification. Due to the restrictions of this site, write to me marksman954@aol.com to discuss with me, the solution to this UpSideDown crisis. Please, do not think you must be UpSideDown, there is a solution, I did it, you can too.

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By: StatDef0 http://blogs.reuters.com/felix-salmon/2010/03/25/why-mortgage-principal-reduction-isnt-happening/comment-page-1/#comment-14868 Sat, 15 May 2010 15:48:43 +0000 http://blogs.reuters.com/felix-salmon/?p=3081#comment-14868 The one thing I noticed is not discussed is who put us in this mess in the first place. Starts with Banking, ends with Industry. I happen to have a loan with a balloon due in a few years. Now all the banks have rolled up the red carpet of lending and now do not lend with nearly the same criteria as before and they have destroyed the value of my home. Hence, no options remain. So, strategic default appears the only solution, one which has created havoc in my life as up to now I have always paid my bills and taken care of my obligations, so I do this reluctently as it is the only option left. Should banks reduce principal to save a loan, it is up to them. Since their irreponsibility destroyed any chance of equity in my house, seeing them take the loss seems somehow appropriate and unavoidable. For if I leave, they will certainly take the loss, either way a loss will be had. I do not feel one bit sorry for the pain of the banks right now as their greed created it with irresponsible lending practices which affected the values of everyones home. Am I responsible for the situation? Yes, I share in the responsibility as buying a home with so little down was attractive even though not very sensible as it turns out. So the suffering now is of my own creation as well. But in this, lets not forget it takes 2 to tango, the Banking Industry messed up and so did I, there will be no winners in this all as I may have to move my family out of a place we call home because of all of this and the bank will surely take a loss. So, we may comment and pass blame all we like, any way you slice it, all will take responsibility for their actions as their are no innocent parties here.

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By: arma2009 http://blogs.reuters.com/felix-salmon/2010/03/25/why-mortgage-principal-reduction-isnt-happening/comment-page-1/#comment-12978 Mon, 29 Mar 2010 03:14:35 +0000 http://blogs.reuters.com/felix-salmon/?p=3081#comment-12978 While we are on the topic of forgiveness due to a poor investment, what about all the retirees (or soon to retire) who suffer equal or greater perils in their 401(k) accounts. As most homeowners currently suffer losses on their “investment” so do other asset holders, such as 401(k) participants who have purchased stocks and bonds only to watch them melt away over the last couple of years when they needed it most. Where do the bailouts stop? Can everyone claim ignorance where there is risk? I think there is no doubt the government would support housing as an investment and as almost any investment discloses “past performance is no indication of future results.” Over-consumers should suffer the consequences of their choices, otherwise we enable governments to enter win-win situations with the successful speculators and those left holding the bag. The only losers are the ones that are the silent majority – the American Taxpayer. Everyone at some point in life learns a valuable lesson that effects their lives from that point on – let this be theirs.

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By: curmudgeonman http://blogs.reuters.com/felix-salmon/2010/03/25/why-mortgage-principal-reduction-isnt-happening/comment-page-1/#comment-12976 Mon, 29 Mar 2010 02:25:28 +0000 http://blogs.reuters.com/felix-salmon/?p=3081#comment-12976 “Remember that anyone who bought a reasonable home in a reasonable neighborhood on decent mortgage terms with 20% down and has been making their payments is nowhere near underwater, and is in fact paying exactly what they expected to pay for the house they wanted to live in.”

I have a conventional 30 year 80%LTV and I am over 60% underwater. I live in a very nice neighborhood. My FICO is close to 800. I have never been more than a couple days late on my mortgage. I am with BofA via the Countrywide route and must be one of the very few that did not lie to get a loan. Loan payment is probably 20% of gross income.

I feel the moral hazard is with the banks, who along with their brokers, heated up a real estate market by using loose underwriting standards. Then they securitized the mortgages and screwed their investors. THEN they screwed the USA by requiring bailouts, at which time they rewarded, or tried to, the very same crooks that created this mess. Remember, the banks and mortgage companies are experts in real estate markets, not those of us that purchase once a decade or less. Don’t preach moral hazard to me BofA, et al.

I will pay my mortgage until my income adjusts down or I come to my senses. If I walk away, which I can do and then pay cash for the same house across the street, I only feel sorry for the investor that the banks have screwed over along with those of us that are not professionals in evaluating real estate markets nor can exercise undue influence over our appraisers as the banks could and still can.

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By: silliness http://blogs.reuters.com/felix-salmon/2010/03/25/why-mortgage-principal-reduction-isnt-happening/comment-page-1/#comment-12947 Fri, 26 Mar 2010 22:10:46 +0000 http://blogs.reuters.com/felix-salmon/?p=3081#comment-12947 But I thought only the bankers were at fault. Americans living beyond their means are deadbeats, scoundrels, squatters, looters, and a few things I dare not write.

Being the compassionate liberal that I am, I recognize that there is nothing I can do about the human failings illustrated by our housing bubble. I can condemn the deadbeat borrowers and predatory finaciciers, but I cannot change them. Their crimes are so vast they threaten to suck me into the vortex of their evil. I will drown with them if I refuse to help so like a good soldier in Iraq and Afghanistan sacrificing his life for an undeserving nation, I am forced to help an unworthy population. It’s sad.

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By: vgalis http://blogs.reuters.com/felix-salmon/2010/03/25/why-mortgage-principal-reduction-isnt-happening/comment-page-1/#comment-12946 Fri, 26 Mar 2010 19:19:13 +0000 http://blogs.reuters.com/felix-salmon/?p=3081#comment-12946 I think giving people cash, while better for the borrower in theory doesn’t really help the bank. Think about it: if the main problem is that borrower is underwater, giving him some cash which does not apply to principal reduction leads to a borrower that’s *still* underwater on their loan. (Assuming that housing bubble doesn’t reinflate by then and that the borrower was significantly underwater.)

Worse still, a principal reduction on a loan that would otherwise default doesn’t actually cost the bank anything (unless of course they end up writing down the value of other mortgages as well), giving someone cash does.

The principal reductions sound like a win-win. Giving out cash sounds like throwing good money after bad.

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By: yr2009 http://blogs.reuters.com/felix-salmon/2010/03/25/why-mortgage-principal-reduction-isnt-happening/comment-page-1/#comment-12944 Fri, 26 Mar 2010 19:16:00 +0000 http://blogs.reuters.com/felix-salmon/?p=3081#comment-12944 In many cases the repossessing banks find they can’t sell the property, because there are no buyers, even at a fraction of the official assessed price.
There is a substantial surplus of repossessed homes on the market, and an even bigger ‘shadow’ surplus of homes that would have been already foreclosed in ordinary times.
Under such circumstances the banks don’t seem to have too many choices.

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By: csodak http://blogs.reuters.com/felix-salmon/2010/03/25/why-mortgage-principal-reduction-isnt-happening/comment-page-1/#comment-12941 Fri, 26 Mar 2010 18:54:56 +0000 http://blogs.reuters.com/felix-salmon/?p=3081#comment-12941 This mornings announcement is another inadequate response. The banks are going to either be forced to write more of their debt through short sales or increase the shadow inventor.

We still have two more waves of resets ahead of us…can’t wait to see the Feds and Treasuries policy response.

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By: HBC http://blogs.reuters.com/felix-salmon/2010/03/25/why-mortgage-principal-reduction-isnt-happening/comment-page-1/#comment-12940 Fri, 26 Mar 2010 18:33:58 +0000 http://blogs.reuters.com/felix-salmon/?p=3081#comment-12940 This is Bank of America we’re talking about here. The same bank that gave people illicit cash incentives to assume mortgages, not all of which have gone sideways (although not for want of the same bank spinning many of them into cotton candy).

Whatever it is they’re really up to, they’re definitely not looking for ways to give away all the back end margin to people in or out of distress. They’re way ahead of the touching definition of capitalism proffered by anonymous writer Brown “quoted” or, more likely, made up.

That bank could give a tinker’s damn whether principled people like them or not. It’s not, and recently never has been, popular approval they’re after.

They’re going to do whatever looks best on BofA’s books in the short run, and by the time you’ve figured out how much it was really worth to them to keep this shell game revolving (actual mortgages representing Higgs boson mass value relative to BofA’s overall derivative complex), dividing and ruling the market of frontline attitude as they go, the actual margin will be in just about anybody’s hands except those who thought they were really buying a house or two they could – more or less – reasonably afford, if they’d been doing business with a real bank.

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