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It's No Longer Only Subprime Borrowers
Old 02-12-2008, 10:33 AM   #1
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It's No Longer Only Subprime Borrowers

It is no longer only subprime borrowers who are falling behind in their house payments. As home prices continue their free fall, people with prime or good credit are also losing their homes. To make matters worse, there now seems to be, "a change in social attitude toward default." When will it ever end?
http://www.nytimes.com/2008/02/12/bu...ef=todayspaper
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Old 02-12-2008, 10:59 AM   #2
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just copy and paste my comments from one of your 20 other threads about the subject
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Old 02-12-2008, 11:16 AM   #3
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When will it ever end?
As soon as we all wake up to the fact that the earth is hollow and we can live there instead, free of the oppression of government.

Our Earth Is Hollow!

or, as soon as the markets stabilize, whichever comes first.
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Old 02-12-2008, 03:26 PM   #4
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Hey! No one ever told me about this. It's a vast right/left wing conspiracy I tell you.
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Old 02-12-2008, 05:11 PM   #5
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Wanna hear something really strange. Ever been to Vegas... There is nothing but open land everywhere. :confused:

How the heck can home prices get out of whack?


One other comment about prime borrowers. Just because one has good credit does not mean they made a good decision. IMHO - the only credible reason for default is lose of job, or perhaps medical bills drove one into bankruptcy, or some natural disaster. In most other cases people just overspent or made poor financial decisions.


It is tough to swallow... but they overpaid. A home is an investment. I lost real money on stock investments in the past... substantial amounts of money. Can I give the paper back to the brokerage and get my money back?
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Old 02-12-2008, 06:15 PM   #6
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Originally Posted by Marquette View Post
As soon as we all wake up to the fact that the earth is hollow and we can live there instead, free of the oppression of government.

Our Earth Is Hollow!

or, as soon as the markets stabilize, whichever comes first.
I rather doubt the earth is hollow, but if it is, I am sure any government there would be repressive too.
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Old 02-12-2008, 06:41 PM   #7
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Hey wasn't the mantra the last 10 years OH YOU HAVE TO HAVE A HOUSE ITS BOUND TO GO UP! Why everyone has a house why dont you have one! Renting is for suckers! /snicker
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Old 02-12-2008, 06:51 PM   #8
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I rather doubt the earth is hollow, but if it is, I am sure any government there would be repressive too.
But they say there are dinosaurs down there and that's where oil comes from. It's virtually unlimited!

And, since it's a well-known fact that raptors hate dictators, I think we'll be safe.

Of course, the rest of us are in trouble with the sabertooth tigers, but that's another story for another time.
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Project Lifeline
Old 02-12-2008, 11:10 PM   #9
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Project Lifeline

In December mortgage lenders agreed to a Treasury Department plan to freeze interest rates or speed up refinancing for hundreds of thousands of subprime borrowers who were fortunate enough to be current on their payments. In order to induce consumers to be proactive with potential mortgage problems, a hotline with a toll-free number was initiated. 36,000 people called this number, but unfortunately only 10,000 have been helped with suggested loan workouts with the aid of this hotline.

Two millions borrowers in the next two years will be subject to rate increases on their adjustable loans, which could dramatically increase the number of foreclosures. Typically not only homeowners lose on a foreclosure, but lenders lose about 50% of the loan amount.

Yesterday, six major mortgage lenders agreed to participate in Project Lifeline: Bank of America, J.P. Morgan Chase, Citigroup, Coutrywide, Washington Mutual and Wells Fargo. These institutions will be sending letters to hundreds of thousands of customers who are currently 90 days late on payments, notifying them that they may get a 30 day reprieve in foreclosure proceedings and renegotiate more favorable loan terms.

Folks, as you can see our nation's banks are becoming increasingly desperate. In the past few weeks, we've witnessed America's largest lenders actually lowering the loan to value ratio on new home equity loans and even shaming many of their existing customers by substantially reducing their line of credit or worse yet cutting off life support altogether. Ironically, they're demonstrating alarming desperation in their attempts to reach first mortgage holders with their so called "Project Lifeline" and even lowering interest rates on loans that are already over 90 days late. Things continue to get worse for America's financial institutions as they attempt to survive the worst credit crisis in world history. How will Ben Bernanke ever bail us out of this one?

Earlier Subprime Rescue Falters - WSJ.com
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Old 02-13-2008, 12:27 AM   #10
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How will Ben Bernanke ever bail us out of this one?
Why, Ben will.........lower rates!!!

Only 300 basis point left Dr. B. Then it's time to PANIC.
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Old 02-13-2008, 01:08 AM   #11
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Originally Posted by Retire Soon View Post
In December mortgage lenders agreed to a Treasury Department plan to freeze interest rates or speed up refinancing for hundreds of thousands of subprime borrowers who were fortunate enough to be current on their payments. In order to induce consumers to be proactive with potential mortgage problems, a hotline with a toll-free number was initiated. 36,000 people called this number, but unfortunately only 10,000 have been helped with suggested loan workouts with the aid of this hotline.

Two millions borrowers in the next two years will be subject to rate increases on their adjustable loans, which could dramatically increase the number of foreclosures. Typically not only homeowners lose on a foreclosure, but lenders lose about 50% of the loan amount.

Yesterday, six major mortgage lenders agreed to participate in Project Lifeline: Bank of America, J.P. Morgan Chase, Citigroup, Coutrywide, Washington Mutual and Wells Fargo. These institutions will be sending letters to hundreds of thousands of customers who are currently 90 days late on payments, notifying them that they may get a 30 day reprieve in foreclosure proceedings and renegotiate more favorable loan terms.

Folks, as you can see our nation's banks are becoming increasingly desperate. In the past few weeks, we've witnessed America's largest lenders actually lowering the loan to value ratio on new home equity loans and even shaming many of their existing customers by substantially reducing their line of credit or worse yet cutting off life support altogether. Ironically, they're demonstrating alarming desperation in their attempts to reach first mortgage holders with their so called "Project Lifeline" and even lowering interest rates on loans that are already over 90 days late. Things continue to get worse for America's financial institutions as they attempt to survive the worst credit crisis in world history. How will Ben Bernanke ever bail us out of this one?

Earlier Subprime Rescue Falters - WSJ.com
So dramatic. It almost brought a tear to my eye. The country will deal with it like any other so called crisis in Us history. People adapt and overcome.
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Old 02-13-2008, 04:28 AM   #12
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Can people actually walk away from those loans (and foreclosure costs) with the recent changes to the bankruptcy laws?

The New Bankruptcy Law - Findlaw for the Public -

And if they do not file Bankruptcy, won't lenders be able to file suit to force repayment of some of the assets and/or garnish wages?

I would expect a huge surge in aggressive debt collection from agencies in the next few years.

I saw one woman interviewed who was going to walk away because her condo value had dropped 150k, yet she was working, owned another house, and could afford to pay. I do not think she will get away with it completely. Matter of fact, I hope she doesn't why should the owners of the lenders (i.e., all of us stock holders) pay for their bad judgement?

She said it was a business decision. But it could be a bad decision. These people might be able to cut some of their debt. The part that they are not considering.... Their credit history is now used as a measure of the person for reasons other than credit. Everything from employers judging one for employment to insurance companies (P&C included) accepting one as a customer (or rating them and wanting higher premiums).


Of course, I suppose we should keep in mind that the people who got themselves into the mess did not think much about the implications of buying (and sometime investing in houses) during a bubble. They are unlikely to think through this type of decision either. Oh well... Natural Selection.
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Old 02-13-2008, 09:02 AM   #13
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Chinaco,

Newguy directed us to this article in another thread. It might answer some of your questions.

Troubled borrowers are walking away from their homes - Feb. 6, 2008
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Housing and Credit Becoming Defining Political Issue
Old 02-13-2008, 09:36 AM   #14
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Housing and Credit Becoming Defining Political Issue

Obviously, many people on this board are becoming increasingly burned-out on the subject of housing and credit. This thread is definitely not the first, and surely will not be the last before the subject is placed on the back burner. It's hard to turn the TV on or listen to the radio without the housing bubble or the credit crunch surfacing as discussion topics. Sorry folks, but we're going to have to get used to it. November is a long way away and the housing bubble now ranks up there with health care and Iraq as defining issues in congressional campaigns.

Free Preview - WSJ.com
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Old 02-13-2008, 09:45 AM   #15
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She said that she now wishes she had taken a traditional fixed-rate loan when she bought the home. At the time, she asked for a loan that could be refinanced after one year without penalty. She said her broker had told her a week before the closing that the penalty would extend until May 2009 and that she reluctantly agreed because she had already started moving.
Hadn't heard of lending practices like this before.
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Old 02-13-2008, 11:13 AM   #16
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Originally Posted by Retire Soon View Post
Obviously, many people on this board are becoming increasingly burned-out on the subject of housing and credit.
Free Preview - WSJ.com
You might not know that 80% of the posts on the board are from only 2 people, Polly and Anna. They operate under multiple disguises and are more or less able to keep their ruse under wraps.

Since they know that America operates with a manifest destiny to triumph, there is no need to deal with details, in particular details that might seem to suggest difficulty ahead.

Iceberg? People are always seeing icebergs, and we will adapt and prosper as we always have. God wills it.

Ha
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Old 02-13-2008, 01:48 PM   #17
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Iceberg? People are always seeing icebergs, and we will adapt and prosper as we always have.
At least if they're able to shove other people out of the way and make it to the lifeboats while there is still room.
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Old 02-13-2008, 02:13 PM   #18
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You might not know that 80% of the posts on the board are from only 2 people, Polly and Anna. They operate under multiple disguises and are more or less able to keep their ruse under wraps.

Since they know that America operates with a manifest destiny to triumph, there is no need to deal with details, in particular details that might seem to suggest difficulty ahead.

Iceberg? People are always seeing icebergs, and we will adapt and prosper as we always have. God wills it.

Ha
Polly and Anna...Ha just blew my cover

Whats the famous unclemick quote from, I think, deGall, something like: God looks after idiots and Americans.....

Its worked for a long time now.
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Can't feel sorry
Old 02-13-2008, 03:56 PM   #19
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Can't feel sorry

I can't feel soory for any of the idiots featured in the article. The one guy said his goal was to get out before it reset. He didn't and now because of his greed I should feel sorry? The lady in North Las Vegas should have known better than to have a loan with a less than interest payment and no principle payment to boot. What were these people thinking? To bad for them, they bet on the craps table and lost.
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Old 02-13-2008, 06:36 PM   #20
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Chinaco,

Newguy directed us to this article in another thread. It might answer some of your questions.

Troubled borrowers are walking away from their homes - Feb. 6, 2008
Thanks.

Looks like borrowers that walk away in California get a pass if it is an initial mortgage.
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