Why 'Operation Twist' Is Especially Stupid: There's No Lack Of Short-Term Financing [View article]
That is also debatable. If the regulatory compliance is nothing other than additional paperwork than this would be true. Sticking to the environmental regulation example if the regulations and the job end up having a tangible benefit like reduction of pollution which decreases lost productivity due to illness than the new job does increase productivity. The new job can also help to bring work previously done abroad back to the US if the technology necessary is only available domestically.
Why 'Operation Twist' Is Especially Stupid: There's No Lack Of Short-Term Financing [View article]
Reducing taxes to stimulate demand is nonsense. The author himself said that corporations are cash rich and are refusing to invest, lower taxes will only exacerbate the situation by putting more cash in corporate coffers which are already full.
The reduction of regulation argument is different. One can argue that reduced regulation will motivate corporations to hire and grow market share. However, one can also argue that increased regulation creates new jobs. A perfect example is environmental regulations. If the regulations call for a reduction of emissions which require new equipment the purchase of the equipment will stimulate the economy and create jobs for the manufacturers, distributors and service providers who take care of the equipment. I personally lean towards the second argument but there are few hard facts which one can point to which establish which argument is definitively correct.
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
No I am not ok with it and I don't see how my comments indicated that I was ok with it. The point I was making is that the investors cared about getting returns but did not care about doing the due diligence. Part of that due diligence is fully analyzing risks and another equally important part is properly following the process of closing the deals. In this case both were ignored and we now have this horrific mess on our collective hands.
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
The reality is that investors buy payment streams. In this case the note provides the ownership of the payment stream. The fixation on salesman's promises and lack of due diligence means that they ended up buying payment streams backed by air and in fact will end up with nothing. When will the attitude towards risk management and due diligence change back to one of appreciation and away from "the evil deal killer" train of thought that lead us here?
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
Sure everyone was involved but the CRA was a tiny tiny tiny part of what went wrong. Where the government really went wrong was to not enforce existing regulations which would have stopped most of the worst abuses which lead to the worst problems. The primary point of failure was banking regulators only auditing portfolio performance stats and never looking at the portfolio components up close. The insane leverage which they allowed and the fast and loose use of mark to market were also government failures. No one twisted the financial institutions' arms to do dumb loans, they simply found a way to market to foolish borrowers and foolish investors who did not do appropriate due diligence. They than made their intermediary fees and kept it going for as long as they could.
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
The Feds made no such policy, I worked in the mortgage business and it was lenders who made certain stupid decisions regarding incredibly low underwriting standards. The feds just subsidized lending in certain neighborhoods by offering small incentives to do so. The lenders were the ones who decided how they would get the loans done. The government has now made stated income or other loans where the borrowers ability to repay questionable legally.
I don't think you fully understand the technicalities of the law. The actual original note must be in the possession of the owner of the debt in order for them to be able to take possession of the collateral for the debt if the debtor defaults and that collateral is a home. This means that an electronic copy of the note is not sufficient to foreclose. The debt is still owed. But the collateral cannot be seized. The person can still be sued and a lien can be won which would allow for wage garnishment. But this debt could than be discharged in bankruptcy.
This is not a rewrite or reinterpretation of the law. This is simply a matter of requiring all of the parties to honor all of their contractual obligations. One of these obligations is the appropriate handling of the actual loan file. If the bank/investor/owner does not live up to this obligation they lose their secured interest in the collateral.
You are right that almost any mortgagor can try to challenge the enforceability of their mortgage contract by attempting to verify that the current owner of the mortgage payment stream, as represented by the servicer has possession of the original paper note. If they do not than the homeowner can get the mortgage cleared off from the property and renegotiate as they would now only face damage to their credit rather than the damage to credit and loss of home they would have previously faced.
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
I disagree with this becoming a better buyer's market. The massive waves of foreclosures have increased supply. If these foreclosures are temporarily stalled than you are right, this creates some uncertainty and does not impact supply in the long term. If however a significant portion of the properties are never foreclosed on than the supply will shrink and the same number of buyers will have less properties to choose from. This will either stabilize or raise prices.
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
Exactly. This is the "worst case scenario" from the lender's perspective. If the property is a primary residence, the loan is detached and the borrower files for a BK leaving them with clean title and no debt.
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
Not necessarily true at all. Many of the ALT-A and subprime loans went over the conforming cap. Most were limited to the $800k to $1M range but even beyond that many of the Option ARM lenders were going up to $2M and $3M.
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
You are right about the problem faced by the mortgagee but not totally correct about the mortgagor not having any issues. If the original note is lost than the mortgagor cannot be foreclosed upon by anyone other than the legitimate holder of that note. However at the same time a release or satisfaction of said note cannot be granted either. Title insurers may not want to take on the unquantifiable risk of having the note later pop up in someone's hand who can than make a claim to title because their note was not satisfied. This is why the lost note mess is a problem for both the lender and the borrower.
The issue is that we have no idea. The procedural flaws can definitely be fixed, and without a ton of extra money. Having an actual human being review a file for 30 minutes rather than 30 seconds and paying a service provider to nail notice to the front door to serve notice will costs under $100. The real question is how many of these foreclosures are initiated without possession of the original note. We have no idea and that is the central question in this mess.
If the original notes are truly missing than the defaulters will indeed keep title to the home. Their credit will be ruined but the notes can be discharged in bankruptcy. The property taxes are usually a small fraction of the mortgage note. At first the property taxes will be paid by the lender out of whatever escrow reserves they have. Afterwards the homeowner will indeed need to pay on their own. There is a real possibility that a significant number will end up with clear title because there are more than just procedural errors happening on the part of the lenders.
Why 'Operation Twist' Is Especially Stupid: There's No Lack Of Short-Term Financing [View article]
Why 'Operation Twist' Is Especially Stupid: There's No Lack Of Short-Term Financing [View article]
The reduction of regulation argument is different. One can argue that reduced regulation will motivate corporations to hire and grow market share. However, one can also argue that increased regulation creates new jobs. A perfect example is environmental regulations. If the regulations call for a reduction of emissions which require new equipment the purchase of the equipment will stimulate the economy and create jobs for the manufacturers, distributors and service providers who take care of the equipment. I personally lean towards the second argument but there are few hard facts which one can point to which establish which argument is definitively correct.
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
So whom to believe? The foreclosure mess likely will blow over, says one analyst who is baffled that banks - which have every incentive to keep people in their homes - are being accused of all sorts of chicanery. Or, up to 9M foreclosures in the pipeline may face legal challenges, lenders could eat up to $6B and housing Armageddon could ensue. [View news story]
I don't think you fully understand the technicalities of the law. The actual original note must be in the possession of the owner of the debt in order for them to be able to take possession of the collateral for the debt if the debtor defaults and that collateral is a home. This means that an electronic copy of the note is not sufficient to foreclose. The debt is still owed. But the collateral cannot be seized. The person can still be sued and a lien can be won which would allow for wage garnishment. But this debt could than be discharged in bankruptcy.
This is not a rewrite or reinterpretation of the law. This is simply a matter of requiring all of the parties to honor all of their contractual obligations. One of these obligations is the appropriate handling of the actual loan file. If the bank/investor/owner does not live up to this obligation they lose their secured interest in the collateral.
You are right that almost any mortgagor can try to challenge the enforceability of their mortgage contract by attempting to verify that the current owner of the mortgage payment stream, as represented by the servicer has possession of the original paper note. If they do not than the homeowner can get the mortgage cleared off from the property and renegotiate as they would now only face damage to their credit rather than the damage to credit and loss of home they would have previously faced.
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
Foreclosure Moratorium: What Does It Mean for the Housing Market? [View article]
So whom to believe? The foreclosure mess likely will blow over, says one analyst who is baffled that banks - which have every incentive to keep people in their homes - are being accused of all sorts of chicanery. Or, up to 9M foreclosures in the pipeline may face legal challenges, lenders could eat up to $6B and housing Armageddon could ensue. [View news story]
So whom to believe? The foreclosure mess likely will blow over, says one analyst who is baffled that banks - which have every incentive to keep people in their homes - are being accused of all sorts of chicanery. Or, up to 9M foreclosures in the pipeline may face legal challenges, lenders could eat up to $6B and housing Armageddon could ensue. [View news story]