Comments on: Mortgage refinance doesn’t belong in the settlement talks http://blogs.reuters.com/felix-salmon/2011/10/18/mortgage-refinance-doesnt-belong-in-the-settlement-talks/ 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: sands1998 http://blogs.reuters.com/felix-salmon/2011/10/18/mortgage-refinance-doesnt-belong-in-the-settlement-talks/comment-page-1/#comment-32539 Mon, 31 Oct 2011 02:50:09 +0000 http://blogs.reuters.com/felix-salmon/?p=10578#comment-32539 we are almost 300% underwater in our mortgage, we are current on our payments and we both work and have no promblem making payments. BUT the city just did reconstruction on the ditches and roads and now our front yard is under water literally! we just bought new windows last year and we are not sure if we can walk away, shortsale???

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By: sands1998 http://blogs.reuters.com/felix-salmon/2011/10/18/mortgage-refinance-doesnt-belong-in-the-settlement-talks/comment-page-1/#comment-32538 Mon, 31 Oct 2011 02:50:04 +0000 http://blogs.reuters.com/felix-salmon/?p=10578#comment-32538 we are almost 300% underwater in our mortgage, we are current on our payments and we both work and have no promblem making payments. BUT the city just did reconstruction on the ditches and roads and now our front yard is under water literally! we just bought new windows last year and we are not sure if we can walk away, shortsale???

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By: brokemf http://blogs.reuters.com/felix-salmon/2011/10/18/mortgage-refinance-doesnt-belong-in-the-settlement-talks/comment-page-1/#comment-32310 Tue, 25 Oct 2011 15:39:46 +0000 http://blogs.reuters.com/felix-salmon/?p=10578#comment-32310 I do agree to just keep mortgage-refinance proposals in public policy because yeah, that’s where they belong. But I also stress that banks should also be investigated for any anomaly. How do i get out of debt? http://brokemf.com

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By: brokemf http://blogs.reuters.com/felix-salmon/2011/10/18/mortgage-refinance-doesnt-belong-in-the-settlement-talks/comment-page-1/#comment-32309 Tue, 25 Oct 2011 15:36:59 +0000 http://blogs.reuters.com/felix-salmon/?p=10578#comment-32309 I do agree to just keep mortgage-refinance proposals in public policy because yeah, that’s where they belong. But I also stress that banks should also be investigated for any anomaly. How do i get out of debt?

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By: Moopheus http://blogs.reuters.com/felix-salmon/2011/10/18/mortgage-refinance-doesnt-belong-in-the-settlement-talks/comment-page-1/#comment-32044 Wed, 19 Oct 2011 20:40:49 +0000 http://blogs.reuters.com/felix-salmon/?p=10578#comment-32044 “And let’s keep holding the banks’ feet to the fire in the mortgage-settlement talks, and try to get something much more substantive out of them than this.”

No, let’s abandon (as the relatively sensible parties already have) the settlement talks entirely. The talks are a farce. The banks shouldn’t be settled with. The banks should be thoroughly investigated and then sued for everything they have. And the crooks thrown in jail.

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By: spectre855 http://blogs.reuters.com/felix-salmon/2011/10/18/mortgage-refinance-doesnt-belong-in-the-settlement-talks/comment-page-1/#comment-32038 Wed, 19 Oct 2011 18:07:06 +0000 http://blogs.reuters.com/felix-salmon/?p=10578#comment-32038 @TFF, that sounds like a pretty reasonable idea.

@y2kurtus, what exactly would you be getting that a person currently buying a similar $400,000 house could not get? A new purchaser could finance the entire loan at the lower prevailing rate, correct? What am I missing?

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By: TFF http://blogs.reuters.com/felix-salmon/2011/10/18/mortgage-refinance-doesnt-belong-in-the-settlement-talks/comment-page-1/#comment-32023 Wed, 19 Oct 2011 11:01:43 +0000 http://blogs.reuters.com/felix-salmon/?p=10578#comment-32023 y2kurtus, my proposal as outlined above would not give you terms better than someone making a purchase transaction. It would simply allow you an opportunity to refinance most of that 6% loan at a lower rate.

It isn’t exactly debt relief — you would still owe the money. It is more-or-less within the terms of the original agreement, which allows prepayment of principal.

Yes, it is in some sense a transfer of wealth (since the current terms trap you into what is now an unfavorable agreement), but it is a transfer that comes very close to operating within the parameters of the original agreement. Might work with all parties freely cooperating, and minimal push/support from the government? Isn’t that the best kind of agreement?

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By: y2kurtus http://blogs.reuters.com/felix-salmon/2011/10/18/mortgage-refinance-doesnt-belong-in-the-settlement-talks/comment-page-1/#comment-32014 Wed, 19 Oct 2011 01:41:33 +0000 http://blogs.reuters.com/felix-salmon/?p=10578#comment-32014 I have never missed a payment on my 2006 originated loan. I’m at 6% and 25% underwater. The problem is that I signed up for those terms of my own free will. Any program which allows me terms better than someone making a purchace transaction can achive is a transfer of wealth from others to me.

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By: TFF http://blogs.reuters.com/felix-salmon/2011/10/18/mortgage-refinance-doesnt-belong-in-the-settlement-talks/comment-page-1/#comment-32007 Wed, 19 Oct 2011 00:35:51 +0000 http://blogs.reuters.com/felix-salmon/?p=10578#comment-32007 Auros, unless I’m forgetting something…

* The homeowner would reduce payments in the refi, principally by bringing the mortgage rate down for the majority of the loan.

* The new lender might be a little reluctant to participate in a property that is underwater, even if granted senior position on an 80% LTV segment, since the foreclosure risk on such properties is definitely elevated. However the governmental guarantees required to grease the skids ought not be TOO expensive. The nice thing about 80% LTV mortgages is that recoveries are fairly high, even in the event of a default.

* The old lender is slightly better off. They are guaranteed full repayment of the refinanced portion and a reduced risk of default on the remaining portion. In the event of a default that entire remaining portion will be wiped out — but that is still better than what would have happened before the prepayment.

Such a program would definitely require tinkering with rights of seniority, however I believe that can be executed voluntarily even under current law? So all that really remains is a program to codify and manage the transaction, and to guarantee the new 80% LTV loan.

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By: edward.gre http://blogs.reuters.com/felix-salmon/2011/10/18/mortgage-refinance-doesnt-belong-in-the-settlement-talks/comment-page-1/#comment-32001 Tue, 18 Oct 2011 22:20:11 +0000 http://blogs.reuters.com/felix-salmon/?p=10578#comment-32001 All readers are missing the point and the real solution. The US home mortgage issue is a 12-15 $ Trillion issue. To stablize value, prices of real estate needs go no lower. If values continue to fall it benefits no one and hurts everyone in every country that believes in private ownership of real estate. I have presented a plan to the speaker of the US House of representatives that will spur the economy and jobs while putting the entire cost of the plan on the banking system and not government tax payers.

Using a combination US Treasury Zero Coupon Bonds, Federal Reserve Discount window access and other tweeks, all current mortgages could be saved and upto $6 Trillion available to banks to lend to get the worlds economy back on tract and several organizations like Freddie and Fanny will be put out of business.

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