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JP Morgan Chase to Rewrite 400,000 Home Loans
Old 10-31-2008, 07:31 PM   #1
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JP Morgan Chase to Rewrite 400,000 Home Loans

JP Morgan Chase has announced that they will rewrite the terms on real estate loans for up to 400,000 borrowers. These customers will be moved into mortgages with lower interest rates, smaller principal amounts and more-affordable terms. They're hoping that other mortgage lenders will follow their example.


Massive Effort to Save Mortgages - WSJ.com
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Old 10-31-2008, 08:01 PM   #2
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Maybe it would be better to kick them out of their homes. Most of these people bought homes the could not afford and were wanting to sell later to make a profit. I am sure they would not be giving any money back to the government if they would have been able to do that. I don't want to subsidize other peoples stupid financial decisions. I took $10,000 to home closing when we sold our home in the 1980s. No one gave a hoot about me.
What is wrong with renting?
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Old 10-31-2008, 08:05 PM   #3
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My mortgage was with Chase, though I paid off my home in 2006. For a second I was really kicking myself for paying it off early! But after reading the article, I guess they wouldn't have done a thing for me since I had a 30-year fixed.

Mark500, I couldn't agree with you more, by the way.
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Old 10-31-2008, 09:34 PM   #4
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Here I am, living in my paid-off coop, kinda wishing I had done some dumb financial stuff... I hate when the reward for doing the right thing is punishment.

(The beatings will continue until moral improves! )

ta,
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Old 11-01-2008, 09:56 AM   #5
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The move by the New York bank will cover as many as 400,000 borrowers. They'll be moved into loans carrying lower interest rates, smaller principal amounts or other more-affordable terms.
Well, this is what they seem to think they need to do to recover some of their risky loans. I would think they would just want to accept a lower payment, but then also bump up the principal - they might get the money back some day.

Plus, in exchange for lower current rates, maybe they could get the borrowers to commit to upping their payments over time, relative to their income? I'd also like to see these people have to go through some kind of credit counseling.

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Old 11-01-2008, 11:20 AM   #6
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Originally Posted by mark500 View Post
Maybe it would be better to kick them out of their homes. Most of these people bought homes the could not afford and were wanting to sell later to make a profit. I am sure they would not be giving any money back to the government if they would have been able to do that. I don't want to subsidize other peoples stupid financial decisions. I took $10,000 to home closing when we sold our home in the 1980s. No one gave a hoot about me.
What is wrong with renting?
I also agree. Since the folks you describe are getting a break at the expense of all of us, what exactly is the reward/upside for those of us who played by the rules living LBYM for a lifetime?

I will show my ignorance here. Kicking them all out of "their" homes will further depress home values and hurt us all, so I can understand why that's not desirable. But why can't homeowners in trouble be forced to accept extended loan terms (if they end up with 50 year mortgages, so be it) instead of "They'll be moved into loans carrying lower interest rates, smaller principal amounts or other more-affordable terms."

This is very discouraging...
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Old 11-01-2008, 11:28 AM   #7
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Maybe it would be better to kick them out of their homes.
I think it is simply a pragmatic move by the lenders. If they kick them out (takes time/money, and the house they get may be damaged), they have a house to sell into a depressed market, and all the while they are not collecting a penny, have taxes to pay, etc, etc.

I agree that it causes other problems, and it's not "fair", but that is the reason, AFAICT.

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Old 11-01-2008, 11:30 AM   #8
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Originally Posted by ERD50 View Post
Well, this is what they seem to think they need to do to recover some of their risky loans. I would think they would just want to accept a lower payment, but then also bump up the principal - they might get the money back some day.

Plus, in exchange for lower current rates, maybe they could get the borrowers to commit to upping their payments over time, relative to their income? I'd also like to see these people have to go through some kind of credit counseling.

-ERD50
Remember, 75% of these loans were originated by Wamu, which JPM obtained for next to nothing. They had already written off most of these loans when they acquired Wamu, so whatever they can salvage here will immediately add to their earnings. Jamie Dimon is no fool, nor does he give away anything to anybody.
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Old 11-01-2008, 01:47 PM   #9
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This issue should be solved as follows:

Lower the mortgage to the current value of the house
Finance at a 30 year fixed
Put a lean on the house for the difference of purchace price/current value
When house is sold, the lean must be paid in full.

If the current owner cannot afford the house under these terms, forclose.

geez, If Paulson would only listen to me!
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Old 11-01-2008, 01:55 PM   #10
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Originally Posted by DAYDREAMER View Post
This issue should be solved as follows:

Lower the mortgage to the current value of the house
Finance at a 30 year fixed
Put a lean on the house for the difference of purchace price/current value
When house is sold, the lean must be paid in full.

If the current owner cannot afford the house under these terms, forclose.

geez, If Paulson would only listen to me!
I'd vote for this one. This way the value of homes for the rest of us would be protected, or at least not negatively impacted by the program.
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Old 11-01-2008, 02:24 PM   #11
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Originally Posted by DAYDREAMER View Post
This issue should be solved as follows:

Lower the mortgage to the current value of the house
Finance at a 30 year fixed
Put a lien on the house for the difference of purchace price/current value
When house is sold, the lien must be paid in full.

If the current owner cannot afford the house under these terms, forclose.

geez, If Paulson would only listen to me!
Great recommendation!

Audrey
pssst - it's "lien"
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Old 11-01-2008, 02:58 PM   #12
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Originally Posted by Midpack View Post
I will show my ignorance here. Kicking them all out of "their" homes will further depress home values and hurt us all, so I can understand why that's not desirable. But why can't homeowners in trouble be forced to accept extended loan terms (if they end up with 50 year mortgages, so be it) instead of "They'll be moved into loans carrying lower interest rates, smaller principal amounts or other more-affordable terms."
Because they wouldn't take those terms. They'd rather walk away from the house than keep paying when they're so upside down on the loan. That's happening as we speak with people who aren't even having problems making the payments. They'd rather ruin their credit rating for a while than face the prospect of taking many, many years to get to the point where their value is equal or greater than the loan amount.

Unfortunate, but true.
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