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bob riversmith
Unregulated capitalism is organized crime.
04:03 PM on 03/23/2012
Apparently, we have an economy based on perpetual debt-slavery.
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bob riversmith
Unregulated capitalism is organized crime.
03:56 PM on 03/23/2012
Homes should automatically default to the owner free and clear if: A. any form of predatory lending was involved and
B. if say...the B of A can't actually produce the correct paper-work showing how they acquired the property. (No robo-signing ... all Ts crossed, all Is dotted.)

Then the people have another tactic ... an orchestrated mass default.
Whoever created the housing bubble and profited from it should be the ones to take the loss.
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Guns and Ammo
03:25 PM on 03/23/2012
Foreclose on them and kick the deadbeats out in the street where they should be, and make the banks write the loans down.
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june53
Common Sense with Civility, Please!
03:23 PM on 03/23/2012
And yet, here we sit - discussing the obvious while our elected representatives spend
their time wringing their hands and doing nothing to force the issue through to an end
point that will save the US housing market and go a long way to bolster the entire US
economy. OY, what a broken mess we have...
03:19 PM on 03/23/2012
I am a lender, and the LAST thing I would do would be to write down the principle. I’m not saying I wouldn’t do it, but I know that markets are temporary and inflation is on the way. If I were in charge modifications would be done quickly and temporarily (3-5 years) and bring down the payment to the point where it competes favorably with rent, making it far more likley that the borrower will stick it out. Even an underwater homeowner will make a $1,500 a month payment when rent is $2,000. Unless they just plain can’t, in which case you are probably going to write down the loan one way or another, but these are the exception, not the rule.
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EdCorner
Lifelong Democrat..... until the bailouts.
04:01 PM on 03/23/2012
"I am a lender, and the LAST thing I would do would be to write down the principle."

You couldn't use a write off on your taxes? In my opinion, when the first bailout occurred, we should have made all the banks drop mortgage rates and payments to 2%. Who would have walked?
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fabius
Semper cunctando
04:20 PM on 03/23/2012
The first thing a lender should do is learn how to spell "principal."
09:50 PM on 03/23/2012
Bad speller or not, he has the first good idea I've heard so far. Temporary modification might work, provided the economy heats up in time for the old payment schedule to kick back in.
Yeah, I know, it's like having a balloon payment looming over your head, but it may be a risk worth taking if inflation and economic activity go past a point where rents are comparable.
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DanInLA
03:18 PM on 03/23/2012
So...if Govt. bails out the people who can't pay their mortgages, that just props prices up making houses more expensive for those who have not purchased yet. Will they also get government assisance or is it tough cookies for them?
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2tango
Liberte Fraternite et Egalite
03:11 PM on 03/23/2012
In the far-right corporative financial fascism lobbying congress, and creating a "neo-crony-capitalism"
nothing will change, simply because they(corporations) have the government, right where they want it...totally corrupted.
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american-dolt
Tax the Rich
03:03 PM on 03/23/2012
Are those the glasses that eyes pop out on springs?
03:02 PM on 03/23/2012
This cannot work.

More good money after bad. More moral hazard. More bailing out a few at the expense of the many. Stop the madness.

The ONLY thing that will "work" will be to let housing prices fall until buyers emerge with cash, large downpayments etc. Let the markets clear.

Gvmt can only make things worse which you will all see over time.
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EdCorner
Lifelong Democrat..... until the bailouts.
03:04 PM on 03/23/2012
It won't cost taxpayers a dime
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DanInLA
03:07 PM on 03/23/2012
LOL...yeah right.
03:29 PM on 03/23/2012
Yes. The biggest financial disasters of all time were caused or exacerbated by government tinkering, including the Great Depression. Of course, the Ponzi scheme that caused the mortgage meltdown was the result of the ability of a few to convince the right people that abandoning time honored lending practices was good. Sort of like all the folks that said PE ratios used to value stocks were "outdated" during the dot-com boom. I hate to be a conspiracy theorist, but I do find it hard to believe that such smart people couldn't see that lending money with zero down to people without verifying income and questionable credit was a bad idea. EZ doc loans are not bad, . Zero down loans are not bad, and both would really help the housing industry. You just can't put the two TOGETHER and then sprinkle in bad credit.
02:59 PM on 03/23/2012
More hand outs to the ones that don't work or pat their bills they signed up to pay. If they are going to do this then give every homeowner with a paid off home 50K to off set the taxes they pay every year and have it tax free. When is this country going to make people pay off ehat they owe . All you here here is I can find a job or its to expensive for me to purchase what are the people doing with all the money they are getting from the government. Welfare food stamps mediaid
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Guns and Ammo
03:30 PM on 03/23/2012
It is everyones fault but the person that bought a house they couldn't afford and got a mortgage they couldn't pay. Why.........it is the American progressive liberal socialists way!
02:52 PM on 03/23/2012
more lackies wanting free handouts, unreal how far into the entitlement society mentality we have gotten. You signed the contract, then you pay, its really simple.
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DanInLA
02:53 PM on 03/23/2012
We are one stop away from communism.
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ksjprod
Never met a wise man, if so, it's a woman
03:17 PM on 03/23/2012
Over reacting.
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DanInLA
02:45 PM on 03/23/2012
Can someone explain to me how we benefit by keeping houses overpriced? Wouldn't we be better off letting the prices fall back to where they would naturally go on their own?
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2tango
Liberte Fraternite et Egalite
03:06 PM on 03/23/2012
The federal reserve is the one to blame, trying to keep investors happy with an artificial-inflation.
All members inside the fed are pro inflation, pro-bubble
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EdCorner
Lifelong Democrat..... until the bailouts.
02:37 PM on 03/23/2012
For those against writedowns of principal for all homeowners, why did Y O U bail out the banks. Since Y O U bailed out the banks, don't you think this stance against principal writedowns is hypocritical of y o u? I sure think that. The fact is there is no high mo ral ground here. We are where we are through no choice of our own. The zombie banks skrewing us are all taxpayer supported. This is not a question of right or wrong, it's too late for that - it's a question of helping the economy recover. QE's were a total waste, this is one initiative that will actually get to the homeowners and get this economy going again. We're going to be stuck in these doldrums for decades unless something systemic is done to help homeowners.
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DanInLA
02:42 PM on 03/23/2012
I don't remember bailing out any banks. Two wrongs certainly don't make a right.
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EdCorner
Lifelong Democrat..... until the bailouts.
03:03 PM on 03/23/2012
You did, unwillingly, but for all intents and purposes you might as well have done it yourself. There is no right or wrong when there is no mo ral ground to fight over. You lost that high mo ral ground when you bailed out the banks.
12:25 AM on 03/24/2012
RIP VAN WINKLE sorry you were sleeping for the last 8 years, but heres a news flash, a lot has happened while you were sleeping. Look it up on this thing they call the internet.
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Not That Far Left
My default font is Sarcasmo 12 pt.
02:35 PM on 03/23/2012
As someone who did the right thing, bought an affordable 3 Bedroom home on a small piece of land in a less than ideal neighborhood, I'd like to know why I don't get to benefit from this. I had a standard mortgage - 30 years and 6.875 Rates dropped to 5.25 and I called up Wells Fargo and said "Drop my rate 1% before you guys get screwed. No I don't want to refinance. You're about to be in a bad way and I'm trying to help you out." They wouldn't do it.

The stock market blew up, rates dropped down to 4.25% I refinanced, rolled the costs into the loan, cut the length from 26 years to go to a 20 yr mortgage, kept my payments the same. Seems like a good deal.

So now, if the government were to lower my principle, what would happen. I'm not saying I need to get a huge reduction. But if my mortgage payment were to drop 40 or 50 dollars a month? Yes. I would probably be pumping that money back into the economy.

When will the government take some action to help the middle class drive this economy back to where it should be?
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ksjprod
Never met a wise man, if so, it's a woman
03:27 PM on 03/23/2012
Fanned. Because I'm in the same boat. Bought modest, put 20% down on a 30 yr fixed, haven't missed a payment, refinanced at the beginning of 2009 to a 15 year that didn't raise our payment. We just bought at the wrong time, but had to to stay in the area. Only reason we're still above water (and not by much) is the 20% down and making full payments. If they're going to lower principle, they should do it across the board so everybody benefits. I assure you if we had the lower mortgage the money would be making its way back into the economy.
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Not That Far Left
My default font is Sarcasmo 12 pt.
04:11 PM on 03/23/2012
I'm ok with a progressive scheme- some family of 4 in a 4 bedroom is in foreclosure gets a 25% reduction so they can get back above water, someone like you or me gets a little help as a way of saying "we're all in this together, thanks for helping" and realizing that the 10% or whatever that I get might actually help create a job for the family of 4 because me and half my neighbors are now spending an extra 500 a month in the economy.

Help the middle class and we will all win.
02:17 PM on 03/23/2012
This is a campaign of the big banks to protect their second lien mortgage held into their balance-sheets.
If the first-lien mortgage is written down, it protects the second lien.
All this article is a big lie.
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ErnestineBass
No longer a cog in The Machine.
02:36 PM on 03/23/2012
Did that make sense to you?
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stevnjessie1
05:20 PM on 03/23/2012
Saving the first lein does not protect the second. They don't even have to let the other be aware.