House votes to let judges change terms of mortgages-?
by Mortgage Rates on Sunday, October 24th, 2010 | 15 Comments
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The needs of the few outweigh the needs of the many. Democratic play book page 2 paragraph 4
I like it. It simply allows the interest rate to be reduced. You can already do it with some car loans. It will still be relatively difficult to do, so I don’t think it will encourage people to file bankruptcy. It will simply help those that are struggling with interest rates that are too high.
Sounds a little bit like “from those according to there ability to those according to there needs” . That is from the founder of Marxism – Karl Marx. Another great person in the eyes of the democrats.
So you are proposing that people should go homeless … for what? To preserve bank profits? The same banks that have wasted how many millions of OUR dollars?
And how will anyone’s mortgage rates skyrocket? Do you think that foreclosure, in this market, will save the banks more money than an interest rate reduction?
You’re angry at the world, but you don’t seem to know WHY you’re angry, nor do you offer any of your own solutions.
I am a lifelong, hardcore liberal and I don’t like it.
Some of those people bought houses that they thought they would be able to afford, and then lost their jobs.
Some of them were scammed by corrupt bank officials.
And some of them knew they couldn’t afford the houses and are just plain greedy.
Whatever the reason, if you can’t afford the house, then you shouldn’t be in it.
People can sell the expensive houses and move to a house that they can afford.
If the expensive house doesn’t sell relatively quickly, there can be holds placed on the mortgage, but the terms of the mortgage should not be changed UNLESS it’s proven that the bank committed fraud.
It’s just a house.
It’s not your life.
First, I don’t see how it will make responsible people rates increase seeing that most people have “fixed” rates. Second, I don’t know if you own a home, but I do and every time one of my neighbors goes into foreclosure my home value plummets. Finally, most people don’t want to file for bankruptcy because it ruins your credit and is very expensive.
What do you suggest they do?
Responsible people have fixed rate mortgages. This mean the rate is fixed for the life of the mortgage and cannot be changed.
There is no perfect solution for an imperfect situation. As I understand it, one of the provisions will return a percentage of any profit, if/when the property is sold, to the mortgage lender. That way, the pain AND the profit are spread around. I could live with that and I’m sure that millions of others will, too.
As bad as you might think things are now, imagine millions more people homeless and banks stuck with houses they can’t sell. There comes a time when people have to be more important than mere money.
There is also an upper-dollar limit, so “McMansions” (over +/- $450,000) are not covered in this bill.
This is good.
I’ll be recommending this to my clients.
Reason: What others feel falsely that they are paying someone Else’s mortgage” isn’t true.
There are people that had income. Lost their income or are working less hours because of lay offs. These folks could originally afford their homes. They were in some cases on their jobs for over 20 years!
What people are thinking, that some people bought “Big huge homes” out of their budget. These home buyers could once afford their “Dream Homes”.
Sure there were speculators etc.
I really feel that there are folks out there that are “sour grapes” because they have a shabby house that they are working two jobs to pay for and resent the one’s that once could afford their house.
These people purchased their homes at a 3% rate, then it increased to 6%, then to 9%, then to 13%…lost their job!
If it takes them filing bankruptcy, more power to them. Their credit in some instants, is screwed anyway.
This should put the condescending mortgage companies back into their place.
I think 13% interest is outrages! No home buyer saw any of this coming. It is not their fault. ARM’s are nothing to fool around with, even in the best of times.
The only solution I see is for the distressed home buyer is to stand at the courthouse steps with a cashier’s check and purchased the over market value home for half the price!
Or if all else fails. Have someone else in good credit standing (straw buyer) to help them get the home back at the courthouse steps.
There were a lot of sneaky under handed loan officers/brokers/lenders out there. I saw them in action.
Change the interest rates all you want.
Do not change the principal owed. That will cause interest rate to go up. Not on people who have homes but on those trying to buy homes.
It will turn into the same scenario as credit card rates. The rates are so high because it is so easy to claim bankruptcy and clear your debt, also because of debt consolidation. Credit card companies lose tons of money because of it. They adjust the rate of responsible people to make up the difference. Do you think that mortgage companies and lenders will just eat the cost? Of course not, they will do the same thing and raise interest rates to make up for the losses.
i think it’s the right thing to do
Well if clintons had not have put in for loans for people who could not afford them!! and passed that law, this is the result of this, I saw where even lending tree!! a huge company were giving loans to illegals with no SS#’s what is this place now a free for all, ever since the clintons and bush’s and now obama have been in charge we have lost our US pride!! how very sad indeed. Its depressing as hell!
I was a Builder thru the 70′s and 80′s. I know that there were no programs available that a borrower could get a loan without qualifying with proven income and credit. In fact, the qualifying ratio was a mortgage payment, principal, interest, taxes and insurance (PITI) not exceeding 28% of gross income…period. I believe the new bankruptcy law will return qualifying as a prerequisite to a loan.
I know you asked for responses from Democrats but as a Republican I wanted to add my 2 cents on this issue. From what I understand if you have mortgages for multiple homes and file for bankruptcy the current rules only allow the judge to make changes to the interest rates on the other mortgages but not the mortgage for the primary home. Why allow the others to be changed but not the home that the person lives in?
As far as the possibility that then might cause more people to file for bankruptcy if they already in serious hurt then they would mostly likely file anyhow.
My main concern in regards to allowing the judge to have more power to make changes to the mortgage is how much power will they be given? When I first heard about this issue the change that was talked about was to only let the judge lower the interest rate. But lately I have heard comments by a few Democratic leaders that this would allow the judge to even change the amount of the loan in cases where the home owner owed more then the current value of the home. To that I have to say BS. I think the judge should be allowed to lower the interest rate for a short time to give the home owner long enough to recover and that’s it. But to let the judge lower the amount owed on the loan penalizing the bank in the process is too much power, That would lead to banks charging more to those who make their payments.
So right now the big question is what changes will be made and how much power will be given to the judges in the process?
Adam B sorry but you do not have any idea why the banks have failed. I will tell you why. The Democrats made the banks loan money to low income people to buy homes. The banks knew the people would not and could not pay off the loans but they were forced to loan them the money anyway. The Fannie Mai and Freddie Mac bonds were issued so that the low income people could buy homes. Investors invested in these bonds thinking they were good bonds since they were Federal Insured bonds. It was not the banks fault that they got in trouble it was the fault of the Democratic Congress. Bush tried to tell them that the banks would go under if they continued to make them loan money to people that couldn’t pay their loans but the Democrats would not listen. I think the more the government gets involved in the economy the worse our economy gets that includes the change in mortgage rates.