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The Mortgage Meltdown

December 14, 2008 4:00 PM

Scott Pelley reports on the mortgage crisis that's far from over, with a second wave of expected defaults on the way that could deepen the bottom of the U.S. recession.

A Second Mortgage Disaster On The Horizon?
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by Samalabear May 8, 2009 10:23 AM EDT
With regard to the accupuncturist, I frankly found it to be appalling. I don't feel sorry for her. I do, however, feel sorry for her tenants. I can only imagine what hell their lives have been in this. There is no help for the renters, the innocent dupes of all this greed. Real estate as a side thing? Not with six properties to manage it isn't. Too busy looking at properties to think or look at documents, or shop for mortgage brokers? I don't get that, I'm sorry.
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by jimmyfite March 27, 2009 8:17 AM EDT
Unless you have years of experience negotiating with banks...you have to engage an expert to get your loan modified properly. By properly, I mean a thirty year fixed rate at five percent or better with a loan-to-value not exceeding 95%. Do not settle for anything less - regardless of your credit, or how many months you're behind; however, you have to have the income to support the new payment at approximately a 35% DTI! It's time to take the gloves off and fight. Banks have been sticking it to the general population for years and I'm sick of their arrogance. From credit card fees and rates, to NSF charges, to pitiful returns on our investments. Mymortgagemodify.com provides a wealth of free information to help homeowners. I wonder what Mr. Gianni, the founder of Bank of America, have to say?
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by cinand123 March 26, 2009 10:29 PM EDT
Loan Modification wll help ease the meltdown. My clients that I do loan modificaitons for are mostly fallout from lender direct loan modificaitons. Borrowers need someone on their side. Knowing the format and the rules, a professional Home Retention Advocate for the homeowner can tell when they are getting a lazy rep who does not know what they are doing. Unfortunately its the majority on the front lines of the Loss mit. departments. Consumers need advocates. MSNBC, CNN and even the Lenders all claim Loan Mod counselors are not necessary. IT could not be further from the truth. Borrowers should not go it alone, and they should not call internet loan mod companies. They should seek help in their community. Call a local lender see if they know of anyone, or a local credit counseling agency.
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by Short-Sale-Cash March 26, 2009 10:45 AM EDT
Interesting,

Just when you think the real estate and banking scam is over, we hear this news that the worst is yet to come. Like we all know, where there is a disaster in one industry, an opportunity exists in another. Looks like the business to be in is any one that services the foreclosure mess, and having been in the construction, real estate and mortgage industry, the short-sale-cash.com sellers assistance industry is where those in conventional business of real estate have to look at. With millions of foreclosures, and banks dumping all the default properties they can at any price, new opportunities arise.

Success to all,
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by jimmyfite March 26, 2009 10:03 AM EDT
Livonia, MI - March, 26, 2009 - A good percentage of Americans are stressed out, tired and afraid of losing their single biggest investment?their home. It is - or was not too long ago - a great investment! Now most Americans are finding they owe more than their home is worth. Their retirement nest egg of equity is gone. No more refinancing to the hilt to help pay for your child?s college. This debacle is doing more than destroying credit scores, it?s damaging spousal relationships. When will the market value return - two years, five years, ten years?

This mortgage meltdown has created opportunity but we have to say??Buyer Beware.? Mortgage professionals and real estate professionals are jumping on the bandwagon and now providing Loan Modification services. We have researched a myriad of ?Loan Modification? companies over the last three months and there is one thing in common. They all are charging a substantial up-front fee to take on struggling homeowners cases. These up-front fees are starting at $1,500 dollars and exceeding $3,000 dollars. Our opinion is that these new ?Loan Modification? companies are charging these fees because "they can." Homeowners are desperate, they?ve missed some payments and should have a bit of a ?cash reserve,? to pay the fees. The phone jockey - loan mod expert - gets a feel of what the homeowner can pay through a free initial analysis and quotes a fee accordingly. His commission is tied directly to the size of the up-front fee.

If you are having problems paying your mortgage, you can tackle your loan modification yourself or hire an expert; however, you need to do something in a timely manner to save your home, and you need to beware of unscrupulous companies.
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by fungirl_10 March 12, 2009 3:15 PM EDT
That was interesting, but really what do Americans think when they give a 2.9 million dollar mortgage to someone with out a job in hopes that in 5 years time when it is time to pay the first payment that these people will have a job all of a sudden that will be able to cover the payment? If people are really that stupid to buy 6 properties and NOT read any of their mtg documentation or even question the bank about the mtg, than really it isnt the bank that is stupid, it is the person.

I am thankful that I live in a country where people have encouraged me to think for myself, and question people. I am thankful that I live in a country that have more strict rules about what is allowed and is not allowed in regards to Banking as we are only country where our banks are NOT owned by the government.
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by wabby99 December 17, 2008 5:44 PM EST
I think some of our Democratic Congress should be dismissed and prosecuted. They denied any problems with Fannie and Freddie back in 2004 and 2006 when it was brought to their attention. Just go look at the hearings that were held. Listen to the words of Ms. Waters. Chatising the auditor and she and others stated Mr. Rains is doing an excellent job at managing Fannie Mae. That video alone should be enough to prosecute them for trying to protect Mr. Rains and continue to loan money to people they knew could not pay the loans back. They did not care how it impacted our economy they had one goal in mind and that was to give more handouts to their constituency to get votes. Also, Americans MUST be accountability for signing on to loans they knew they could not afford and were too greedy to read the contract they signed. No one can make you sign a mortgage contract, car payment contract or credit card contract. Americans need to be more accountable and patient. They want things that others have to work hard to get and the young people think they should have what took their parents years to get through hard work not passing around a credit card. The American people themselves are mostly to blame for irresponsible behavior and I don''t think those of us who practice self control should pay for their irresponsibility. You can spin it anyway you want but our Congress and the American people themselves are solely to blame for this miss.
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by realtard December 17, 2008 2:50 PM EST
The business model of Real estate is what encourages fraud. The Multiple Listing services are a brash attempt to control the market. By limiting new listings (our right) during a bubble or time of high inventory we restrict the choices and this forces house prices up. There is no law that says we have to represent anyone other than the seller, or even use common sense. If we can talk up a property and pretend to "NO NOTHING", we have done our job. SOme of us use shills---to drive up house prices. Some of us Block bust--in a legal sort of way. We never use ethnic words, but will use secret buzz words like "spotty" or "changing" to let a buyer know that a house in the wrong area will not be a good invetsment. We use the word investment all the time, without ever having be responsible, or even understanding what the word means.


One bad thing about the curent system, is that the listing cointarcts FORCE the buyer to pay the sellers listing agent, no matter if they are a "little thief" or a "big thief". Realtors should never receive a fee for just listing a house. The system where we are is typical. 3% to sellers broker, 3% to buyers broker. The broker can split off a 50% to an associate, or not. The broker has nothing to do but cheerlead the associates and have a small office to entertain the buyers--make it look "official".
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by realtard December 17, 2008 2:37 PM EST
I am a Realtor. Starting in 1999, we noticed that a bubble was brewing. We bought up everything we could find and waited a year before selling. We wanted to get out, not knowing when the bubble would burst. We kept a few properties, and started dollar cost averaging "in" to buy and "out" to sell. Our commissions, referral fees, and profits were exploding. It got so crazy, that all we had to do was smile at a prospective buyer, no more lying was required. In about 2005, we saw some stickiness on house prices. We could no longer list and sell in a week. That means we had to be creative to find new buyers. It seems that everyone was either a flipper, investor or buyer. The N.A.R. was the number one cheerleader during all this frenzy. "You better buy NOW, or you will never be able to be a homeowner", Yopu will remain a "renter", as though renting is like being a terrorist. How did we find new buyetrs, if everyone was a buyer? We trolled for the homeless! We sent out buses and vans with card tables with literature and some uneducated sounding flippers to extoll the virtues of homeonwership. They key words were: NO MONEY DOWN, CASH BACK AT CLOSING, HOUSE PRICES ONLY GO UP, NO CREDIT CHECKS. We didn''t even require identification, no drivers license, No Social Security card, No telephone nunmber or address. Come on back down here tot he bust stoip or Salvation Army when you get your free meals this week and we will help you move in---NO CHARGE!
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