Published: Sunday, Aug. 25 2013 12:00 a.m. MDT
History of poor financial planning by liberal leaders voted in by it's
citizens.You get what you voted for.
Yea, you guys in texas do it so much better......Not.
Cedarcreek320:California vs TexasConservative Texas
economy, light years ahead....Yes!
Why does this story generate a mental image of government-owned housing in the
The strategy proposed is, in effect, no different than working through the
process of a short-sale except for one key item: the existing owner gets to stay
in the home. Is that such a bad outcome? Isn't it more humane
to allow the original owner to retain ownership as they pick up the pieces of
their life after unexpected financial stress? After all, the bank is getting
what it would get if they foreclosed. Eminent Domain requires fair payment for
an asset. Or, are we so vindictive as a society that they must suffer?
what the perpetrators of this plan fail to realize is if they go through with
it, no lender will ever lend in their city again because of teh additionqal
risk. If homebuyers cannot get mortgages, they cannot buy. If they cannot buy,
values will drop even further.Or if lenders do continue to lend, the
interest rates will be much higher because of the additional risk they are
assuming.I guess these civic "leaders" just don't want
credit availability in their communities.
terra nova---this is more about local government financial stress, and it's
desperate grab for added funds.Don't trust the ones, who caused
the mess to begin with.
worf: Exactly. That's the reason trusting the banks makes no sense. It is unfair to characterize this solely as "desperate grab" for
cash by a money-hungry mayor. I know a homeowner with a 6.75%
mortgage on several hundred thousand dollars. If the bank would allow them to
refi - they could stay in their home. But they've encountered job,
investment and medical problems. Their credit has tanked. The bank's
lending guidelines make refinancing to market rates impossible. The
bank is holding their foot to the neck of this family and they are very nearly
at the point of letting go. Wouldn't it be better for the bank to allow a
distressed refi? After all, if they get the money back, they can only expect to
lend it out a market rates again. I realise it is not this simple,
Fannie/Freddie guidelines make any such loan virtually unsaleable. But there is
such a thing as portfolio lending and banks could reasonably expect a premium
over par for lending in that situation. It boils down to this: The
banks get bailed out, but they refuse to help bail-out individuals. That's
what is unfair.
If I understand this, the bank wrote a check for the full amount to pay the
previous owner.Let's say they paid $200,000. They are on the hook for
that full amount.And borrowing money from someone else has a cost.Everyone at closing agreed to those terms.Now, tell me where the
big-bad-bank has a moral duty here?The bank doesn't want to do
anything except receive loan payments every month. They don't want the
house or the foreclosure. They've got plenty of both already.So, you
are now going to add government to the mix with mandates.Contract laws
need support, not government intervention.
Here's a thought: Have the city refund all those property tax payments for
these distressed homeowners. Get the school district and the library district
and the college district to do the same.Have the homeowners forward those
tax refunds to the bank to get caught up.How's that grab you, mayor?
Here's some data to chew on.Richmond is in Contra Costa County.The median property tax bill there is $3854. They rank 83rd in the nation.The median property tax bill in Salt Lake County is $1588. They are 704th in
the nation.Sure, California property values are much higher, but that is
part of the problem.Like I say Madam Mayor. If you want to save those
homes just refund all that money these people have paid in property taxes all
Of course this was thought up by a Cornell law professor.If the
house is worth $200K and they are offering the bank $150K, the city is hoping to
make $50,000 on the deal. A bank would be better foreclosing and selling the
house for $200K.Yes, it is sand that sometimes people have problems.
What is troubling is that people expect the other party to change the terms of
a contract when they need it, but would never agree to do so in the reverse
situation. If the bank had a couple of hard years, would all of their
mortgagees agree to add an extra 1% to their loan rates or pay an extra payment
each year? Of course not!What the mayor is doing is trying to do is
to steal from the banks. A mortgage for $300,000 on a house worth $200,000 is
worth more than $200,000. Many borrowers will actually keep their commitment
and pay the $300,000. Thus, the fair market value of the mortgage is more like
$250,000-270,000. Just another scam using the government to make money for
Typical liberals. Don't be responsible for the contract you signed for the
house you could never afford to impress people you don't care about. When
everything hits the fan, use the power of government to steal other peoples
wealth and savings to keep your own unsustainable lifestyle.It's not a big bank money that they're stealing. That is a lot of
hard working people that put money into savings that is then used to loan to
these people under contract that they will pay them back for using their money.
Instead of honoring that contract, they are going to be bullies and just steal
from those that saved.Hasn't there recently been articles about
bullies in schools? What about anti-bullying legislation? I would counter sue
these people for bullying and causing distress to millions of savers. Who knows
how many suicides can be the result of these hate filled thieves. That is what
it boils down to. They signed contracts, they borrowed too much, and instead of
being adults and paying their dues; they will use bully tactics to steal.
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