Mortgage Debt Snowballing While Congress Debates Home Rescue Bill

New York Times:

When Congress started fashioning a sweeping rescue package for struggling homeowners earlier this year, 2.6 million loans were in trouble. But the problem has grown considerably in just six months and is continuing to worsen.

More than three million borrowers are in distress, and analysts are forecasting a couple of million more will fall behind on their payments in the coming year as home prices fall further and the economy weakens.

Read the whole story: New York Times

Comments

[heal57]

If anyone is in troble with a forclosure or if one is looming you can get help on the following site: I can't make it a hyperlink so please copy and paste. It is excellent.
http://livinglies.wordpress.com/2008/06/29/blame-the-lender-not-yourselves-or-each-other/

[olephart]

Bailouts, bailouts, get your bailouts. Home "owners", banks, brokerages, Wall Street, Main Street get your bailouts. Yes, Congress, the President and the Fed have bailouts for all occasions. Fraudulent loans blow up in your face, borrow more than you can afford, home "equity" loans for that boat, big screen and credit cards put you underwater? Don't worry; we've got a bailout just for you. Whether you're an ex-CEO who was paid hundreds of millions or just someone thinking they could get in, flip a house and pocket a hundred grand we've got a bailout that will fit your lifestyle. Oh, you really weren't thinking about your "investment" appreciating, you really thought that $175,000 house was worth $585,000? Relax stupidity is just as good as dishonesty. You'll love doing business with Uncle Sugar where money is something we borrow too! Remember, the money we give you to pay off part of your loan goes straight to the bank, brokerage or millionaires' hedge fund to bail them out too. It's a twofer! Be sure to vote early and often for the pandering politician of your choice.

[Novista]

Last year, I was seeing comments from 'the smug' when the 'mortgage crisis' reared its ugly head, along the lines of 'Let them rot!' And my reply was "When it's your turn in the barrel, and your pension fund goes down ("The world is not flat" aka Friedman globalization.,)

Funny thing is, no one factored in the untold numbers of old mortgages that'd been sold off, of responsible borrowers from years back, who suddenly found themselves in strife from job loss or major medical problems ... you can't bloody "slice'n'dice" mortgage packages into CDOs without *mortgages*!

Even now, pension funds are throwing money at commodities (like oil) and are called 'speculators'. If it was your money, would you have them buy into financials?! Ha!!!

The ugly but realistic approach to the mortgage market is to get the median price back to the trend line. An artificial prop-up won't cut it. And if "some good now" is OK, how would you deal with those who've already walked away from foreclosure?

[RJII]

thank you.
As someone who lost my six figure job of 15 years and may lose my beloved home of 13 years, I wish people would stop assuming foreclosure is only a bunch of reckless or greedy investors. My health and once large savings are depleting so fast because I am trying to stay afloat. Many demoralizing attempts to sell, give away my home/mortgage have been unsuccessful.

I am not alone-- this economy is picking us off one by one. And I'm not holding my breath that this president, congress, etc is going to do anything for the likes of me , but talk, talk, talk.

Jeez, but they sure bailed out their friends at Bear Sterns (sp) overnight. One year of Iraq funds could probably bail out every student loan and most home mortgages. Imagine that world.

Anyway. I just ordered moving boxes. I really, really, really hate Bush's war-- the beginning of the end of the American dream for me.

[Troubledwawa]

The only thing that's going to help with the issue of trust is a new New Deal, at this point.

[VivaZapata]

during, and for awhile, following reagan's eighties there was a sharp uptick in homelessness. bush years, same thing. at least hoovervilles had a cruddy, crate wood construction. bushtowns seem to be more of the refrigerator cardboard box type: less imaginative, less construction. what would mother bush say? (hint: after Katrina, in the Astrodome, in Houston: they never had it so good.) son bush said that he was the way he was because of her. no doubt that's true.

[watchingthings]

Kind of hard to keep up the mortgage payments when your job migrates off-shore. Those who started this "easy loan" fiasco need to be held accountable. Too many jumped on the "get rich quick in realestate" bandwagon [scheme]. A few at the top made big bucks.....now the whole country pays. The banks' greed shone in this case. They are guilty in this too.

[nodonjuan]

I feel sorry for people losing their homes. I also hate that my hard earned tax dollars will be spent to bail out homeowners. I have played by the rules all my life. My apartment gets no write offs, no deductions. I think California gives a renters credit that is about 60 dollars. I am single so I pay higher taxes for other people to overpopulate the world. No kid write offs for me. I did not go out and get a second on my house so I could go on vacation and drive an SUV. I did not go out and buy a large house without showing my income to qualify and yet, I will still end up paying. What a country.

[Robert59]

It won't work because the lenders won't accept the losses. The minute they agree to accept a reduced home price they have to come up with the money to pay for the loss. It's money most don't have and if they have it they won't want to part with it as they are required to keep so much money in reserve.

What they'll do is drag their feet. We're seeing it now when they refuse to foreclose. They would rather the house sit empty and deteriorate than foreclose. What works in their favor is most lenders are by definition trustees, not owners. The owners of the mortgages are a mystery as the mortgage was sliced and diced and packaged into a CDO and sold as a security.

I do applaud the attempt by Franks.

[asagefield]

You know, this won't even be a band aid solution. The market is correcting. Maybe all these people should lose their homes and the government can assist them in getting apartments. It would be cheaper than having these people pay for homes that won't rise to the peak prices again for another 20 years.

Be practical. Cut your losses, lock in the losses and move on. The gesture of the bill is great because you show the American people you care, but it will only help a fraction of those in trouble and it just might extend their losses because house prices WILL continue to drop against their mortgages.

www.sagefieldpost.com

[outnow]

False free markets are created by the cartels. Petrodollars in Europe are being used to buy up assets in the United States. It is all political. Behind the scenes, the spot market makers are trying to buy up the Democratic party to promote the globilization agenda. Because the Democratic party needs money, these financiers can co-opt the party's platform.

Without currencies being exchanged at a fixed rate, there is an arbitrage and a futures and options market. You don't see Britain in the EU or using the euro. You may be an Anglophile, but the United States is not a class-based society. We need to protect ourselves from becoming an empire and having the "East Indian Company" run us. Smaller banks are going under. The subprime effect a reflection of the crisis in banking, not a cause. Central banks have put out 3.6 trillion dollars in the past year.

CEOs took money out. That money is gone. The institutions that have grown up around these bubbles such as Lehman, Wachovia are going down. The problem is a "debt crisis" that cannot be rolled over. Buffet and Soros are into the food chain. Everything is being cartel-ized - food, raw materials, oil and gas. We are in a breakdown crisis - worse than a depression.

[outnow]

I would protect the banks and the homeowners both. The banks need to be re-regulated. There is too much risk in having massive defaults. Private equity will come and buy up the banks - as in hedge funds; there will be less regulation under this scheme.

The liars' loan and subprime mess is just the first part of the dam that is breaking. The rest - the massive derivatives and financialization and the markets could cave in and a serious depression would result.

3 million loans are threatened with defaults on homes with another 3 million on the way. Both the lenders and the borrowers are to blame. Nonetheless, we need stabilize this economy and place indebtedness into a receivership or bankruptcy to pay off those debts that are just. The rest needs to be hammered down or simply discharged. This is a political move.

My parents went through the Great Depression. You have no idea how bad it was.

[jonmonbuckeye]

I lost my home in 2003. I decided to quit paying my mortgage because of fraud by both the builder and the mortgage company. I was embroiled in a lawsuit, and found that BOTH the builder and the mortgage company conspired to commit fraud (sold me a brand new home that didn't have any inspections). I found out that they had also involved my attorney by promising his firm a new contract to represent their interests in this market. They bankrupted me (I spent 85K out of my own pocket on legal fees). NEVER BY A RYAN HOME!!!!

[KBAR]

I decided to quit paying my mortgage

And they decided to foreclose. What a SHOCK!

[yappnmutt]

this is a bank bailout not a homeowner bailout. banks must keep these loans performing otherwise they go bankrupt. home owners who have untied themselves from debt bondage have simply moved to the rental market and pay a lot less giving them more money to pay for $5/gal gas.

the banks were foolish to extend most of the loans in default or going into default. the homeowners with these loans are foolish not to just walk away from their debt and start over. its just business......not a moral issue.

[MetalCanuck]

This is the Feds fault for printing too much money, then its free trades fault for sending our jobs away. Period. The economy was fine without this crap.

[BigBagel]

Just as long its not the fault of the people who took out mortgages they couldn't afford. They're blameless.

[VivaZapata]

they are not blameless in terms of their personal decision, but they were not the ones in control of sound fiscal policy. that honor goes to the banks. they failed, but they got bailed out. no one on either side should get bailed out, but one side did. big bagel, sometimes mommy says, "don't eat any more candy," and the child should have listened to mommy but got a stomachache instead. it would have been better for everyone if mommy hadn't left that candy lying around in the first place. now the mortgage borrowers were adults, but they still acted like children, and the banks acted like irresponsible parents.

[MetalCanuck]

Oh sorry, I forgot...they are to blame too.

[leduck]

this country is based on rugged individualism



if the whole thing collapses...,
it's every man for himself