Comments on: House Of Cards: The Mortgage Mess

60 Minutes Reports On How The Subprime Loan Crisis Is Shaking Markets Worldwide

[BarbaraAnnJackson]

There has been almost no investigation of the most lethal mortgage mess component: DEBT COLLECTION ABUSE and JUDICIAL COLLUSION. The Feds need to seek the whereabouts of properties and perhaps billions of dollars that winds up in the collector attorneys'' possession.

These Attorneys deliberately file foreclosures naming
defunct mortgage companies, or companies which no longer hold the notes; or affix collectors'' fees exceeding "Acceleration Clauses." If homeowners sue or "Unfair Debt Collection Practices," collectors make
more $$ from prolonged litigations.

Real estate foreclosures are bonanzas of deceptive lending because foreclosures enable PROPERTY FLIPPING, as well as help mislead Investors concerning housing market profits! Debt collection fraud is the prime method for accomplishing fraudulent flipping. Even worse, some homeowners are being sued under "DEFICIENCY" judgments although the foreclosure itself is null.

In States like Louisiana, because Wells Fargo and Freddie Mac greatly benefit from fraudulent foreclosures ANY representation about $$$ billions in losses due to people defaulting on mortgages should be
weighed against needless payments of legal fees to law firms which outmaneuver -and even persecute people who file court proceedings in opposition to fraudulent foreclosures and repossessions. **See RES IPSA LOQUITUR Proof posted on www.lawgrace.org!

Barbara Ann Jackson

[klaughl0]

Matt and Stephanie Valdez want to stop making payments on a declining value. I wonder how they feel about their car payments. The car is a depreciating asset so they should stop those payments as soon as they drive off the lot. The same can be said for any credit card payments. The clothes that are purchased and worn are no longer worth what was paid, and will never appreciate. At least the house value will come back. Glad I''m not looking at their credit reports or interviewing them for a job. I probably would not want them for tenants either.

[jlgutierrez2]

I am a resident of Stockton, CA and live in Weston Ranch..I have fallen victim of 2 consective job losses since 12/06 and I am currently uneemployed. I am currently attempting a short sale of my property which has been my residence for the past 7 years. I am trying to avoid foreclosure while also trying to avoid all tax consequences with doing a short sale. What is the average hard working family suppose to do during this time of misfortune????

[sadmodesto]

My business partner was suffering from cancer. His mortgage company told him that for the duration of his chemo, they''d suspend his payments. They told him that they''d tack them on to the end of the loan. The very month his chemo was over, they told him ALL was due. He hadn''t even started back to work yet, let alone caught up financially. Needless to say, he lost his house.

Same story for another friend of mine with cancer.

Now, who''s greedy?

I am sure there are some stupid greedy people out there that lost their homes. But I think the majority of folks had legitimate issues that led to this.

[russdog777]

Coppermouse1,
"Exactly how would they qualify given that their credit rating would be slammed by their foreclosure?"

How to qualify for musical houses. Assumes you are deeply upside down on the home loan and houses nearby are being foreclosed; and that you can purchase them for a great deal less than your current mortgage. Also assumes you have money for a downpayment ont he new house you want to buy. And you have not HELOC''d your current house to withdraw cash (those are recourse loans, Im told).

You qualify by purchasing the house across the street with a good down payment, at the same time you list your current house with a realtor for sale. The new house should be severely discounted as in a foreclosure. It happens all the time where a person buys one house before selling the old one when moving. Banks routinely issued bridge loans for this purpose.

You purchase the new house because you have money in the bank and your credit is at least OK. And you get a terrific deal buying the house real cheap. You haven''t defaulted on anything yet.

Now the current house is so far underwater you will never be able to sell it for what you owe. But list it for sale anyway, just to look like you tried. You move in to your new house and make these lower mortgage payments. You soon stop making the payments on the over-priced house where you used to live. It goes into foreclosure.

[georgiagrl1]

Most ARM type loans have a feature allowing the consumer to convert the loan to a fixed rate after a certain period of time. There is a small fee involved and the cost of a property appraisal, as well. When intrest rates start to fall, lenders will solicit their existing ARM customers into refinancing. When rates are on the rise, no lender is going to call an existing customer and invite them to exercise their convertability feature.

The original purpose of an ARM type loan was to enable a prospective "marginal" borrower to qualify for a loan when they would not normally qualify for a standard fixed rate loan. Greenspan''s position was based upon this feature. Perhaps the guidelines to qualify for a standard fixed rate loan were in place for a good reason...to determine the potential borrower''s ability to re-pay the loan. An ARM merely manipulates the qualifying calculations.

[coppermouse1]

"I was fascinated by seeing recent talk of the developing game contemplated by people walking away from mortgages. Musical houses may be next?"

Exactly how would they qualify given that their credit rating would be slammed by their foreclosure?

[deemsnyd]

So do I, but how could so many people have fallen for it?

[whatithink-2009]

deemsnyd,

Given that right after making this statement he started one of the longest period of rate increases in recent memory, I think what he was preaching there was irresponsible.

[deemsnyd]

" Alan Greenspan, as reported by Business Week in April 2004: "No less an expert than Federal Reserve Chairman Alan Greenspan has sung the praises of ARMs. In February (2004), he told credit union executives that such loans could have saved many homeowners tens of thousands of dollars over the past decade. He noted that ARMs are much more common in other countries, and he encouraged the mortgage industry to create more options. ''''The traditional fixed-rate mortgage may be an expensive method of financing a home,'''' Greenspan said.""

Posted by whatithink at 01:26 PM : Jan 29, 2008


Do you agree or disagree with Alan Greenspan?

[whatithink-2009]

" Alan Greenspan, as reported by Business Week in April 2004: "No less an expert than Federal Reserve Chairman Alan Greenspan has sung the praises of ARMs. In February (2004), he told credit union executives that such loans could have saved many homeowners tens of thousands of dollars over the past decade. He noted that ARMs are much more common in other countries, and he encouraged the mortgage industry to create more options. ''The traditional fixed-rate mortgage may be an expensive method of financing a home,'' Greenspan said.""

[deemsnyd]

In 2003, most lenders started pushing the Adjustable Rate Mortgage over fixed rate loans, knowing full well that the consumer would eventually be caught in this situation. The goal of the mortgage lenders at the time was to put loans on the books and profits in their pockets.

Posted by GeorgiaGrl1 at 01:13 PM : Jan 29, 2008


You''re right. And I still wouldn''t have fallen for it. And, like I said, I''m not very business savy at all, but I know this fundamental thing about loans.

[whatithink-2009]

"Where once more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in subprime mortgage lending . . . fostering constructive innovation that is both responsive to market demand and beneficial to consumers."

-Remarks by Chairman Alan Greenspan on Consumer Finance At the Federal Reserve System%u2019s Fourth Annual Community Affairs Research Conference, Washington, D.C. April 8, 2005"

[whatithink-2009]

""American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage," Greenspan said. "

- Alan Greenspan, 2004

[georgiagrl1]

In 2003, most lenders started pushing the Adjustable Rate Mortgage over fixed rate loans, knowing full well that the consumer would eventually be caught in this situation. The goal of the mortgage lenders at the time was to put loans on the books and profits in their pockets.

[deemsnyd]

excuse my mispellings. Yes, we walked away from the home. As explained homecomings owned by GMAC, owned ultimatly by JP morgan. I feel is at fault. They knew we could not afford triple the original payment. We did not go in over our heads on a home we knew could not afford nor a payment we could not afford. I would dearly love to see an interview with these type of companies. Let them explain how they justify a 10% rate increase in less then one year. Our credit was good when we bought the hoem and we like so many others planned on refinancing before the 2 year fixed was up but was uanble because of falling house prices. The mortgage companies and banks got greedy.

Posted by smithbjs1 at 08:01 PM : Jan 27, 2008


The answer to this is to NEVER agree to purchase a home or anything else with a variable interest rate. You can''t trust it, obviously. I have purchased and lived in 4 homes in my lifetime--none of them were evere secured with anything less than a fixed rate. I am not any more "business-minded" than anyone else, but I always knew not to even have so much as a credit card unless it was a fixed rate.

[whatithink-2009]

nookster57,

Why should an individual be more responsible for paying off its debts than the US government? Shouldn''t the government lead by example?

[russdog777]

Musical Houses!!! House swapping!!

Come-on tell me it can''t be done! Walking away from an overpriced mortgage (House) to buy the one next door for 1/2 the price i foreclosure. tht could do wonders for your budget if house prices decline big time.

Playing off one bank against another. Man this could get fun. Is it possible?

[bgladish]

I noticed that it was never mentioned that a specific policy of our brilliant Federal Government is to get people into houses. This policy tends to skew markets in the direction we have seen as money becomes available to loan to marginal buyers.

[russdog777]

I was fascinated by seeing recent talk of the developing game contemplated by people walking away from mortgages. Musical houses may be next?

That''s where you walk away from one overpriced houseat nearly the same time as you buy a foreclosed (or REO) property for a lot less. Then your neighbor can move into your house doing the same thing, and so on ...

When the music stops playing everyone who actualy wants to live there has moved a short distance into a probably comparable house at a fraction of their former house price / payment.

In the past apparently opportunities arose to do this in ''mill towns'' or ''company towns'' when a major negative employment event occurred causing housing prices & demand to drop. and occur they did! Within the span of a few years everyone shuffled into similar houses at a fraction of hte previous price.

If you have a job, plan on staying, and are not generally dependent on credit scores to finance cars, etc. then it may be worth the potentially enormous savings if you have a large non-recourse mortgage. I guess you have to purchase the second home (at like 50% off) with a good down payment (cash) prior to walking from the first. I don''t know how this can be pulled off (the details) but it has happened so im told. Like a game of musical chairs.

Anybody know if there will be opportunity for homedebtors to do this again in steeply-depressed priced markets?