Rocktex

The Economics of Second Liens

Rich,

Felix is just pointing out a very real real real reality which is getting popular in our society or economy. To me, he has done nothing to imply his position.

15 months ago, I loaned one of my credit cards to my sister-in-law. By using mine, her balance of $17,000 was fully transferred into mine at 3.99% interest. She would pay about $450, instead of almost $1,800 a month to her own. She continued to directly pay my credit card banker and she had appreciated my help until 3 months ago.

Now she is kind of regret to ask help from me when I read her words in between. She wished she could know the "smart" broker ( or the right approach) earlier who negotiated with her credit card creditors for her. She got a good deal to pay 10 cents on a dollar, paid off all the balance remaining on her credit cards and she paid mine off.

I have no idea what's going on for her to easily wipe out all credit debt and have a fresh new start. All I know is, since then, my wife has told me 3 times:
"What kind of world is this? I kept coaching my young sister to save. She should stop over-spending. She and her 3 daughters went to have a professional hair-stylist every week and has all kinds of impulsive purchases. I save my money to have mine and my daughters washing our hairs at home by ourselves. I don’t buy such those fancy, junky computer stuffs for my daughter. See, I didn’t buy my daughter a ipod when their 3 daughters have updated to the newest many times. Now my sister is joking at me and says: I am owing nothing now and you still owe a banker a mortgage. Why you have to save? Why don’t you go out to my hair-stylist as we did. When you have problem, you go to see my programmer. I can‘t stand her bragging her wisdom!"

Great systems we have created nowadays! I have to admit that time is changing and I don’t know most of things or see the logics behind them.

The Economics of Second Liens

Great post!
A guy who really knows the tricks of ABS mechanism!
Thanks for updating my understanding on the current discount rate on junior liens.

Bank Coalition Near Accord to Freeze ARMs - WSJ

Here is my previous post on WSJ to comfort you hopefully:

ET - Nov 19, 2007
Hi, K!In the movie "Splash", the actor found out his lover is a mermaid. He is so upset. His brother came to comfort him: "No body says love is perfect." The response is "I didn't expect it perfect, but at least not a fish."

Now I would like to comfort you; "Nobody says life is fair." I know you are going to reply: "I didn't expect...." I understand.

Let me propose this: how about everyone can make a choice to stick to the origional loan terms or switch to the current relief term of freezing plan?

Hmmmm.... you have to make more louder or politicians will ignore you, right?

Bank Coalition Near Accord to Freeze ARMs - WSJ

HELP! I'm Facing Foreclosure!

It sounds like there are not so much experience your peers have. I went through pre-foreclosure when I was trying to obtain my Cali RE licence in 1989-90.

At that time period, nobody including my broker could give me any help. Because they don't have a practical personal experience. All they know is from books. Don't blame them since they really don't know nothing about REO practice even they can show the words "REO specialist" on their business cards.

Now, I have been watching and working on so many foreclosure. I have my keen eyes to see those relief plans consumer organizations have established. They are trying to artificially change the cause of market forces by political powers. Sorry, I have to say: all they know is from books, too. Don't blame them since Cali Governor and Treasury Secretary are so funny to present such a "freeze" loan program.

All of programs are focusing on one side of a coin. Passively asking a help or cooperation from the lenders. Gee! how about the other side?

For an example, one of my neighbors has his home foreclosed on Nov. 6, 2007. It is too late for me to work on when I knew it. There is only 3 days left for me actively and positively "attack" the other side. [in fact, there is only one day since it is a weekend] They owe a bank $82K that is the minimun amount on auction block. The real market value is lower than $ 60K.

If they let me know earlier and give me at least 2 weeks to work on. It is very possible for them to stay at their home now. They may be able to owe a new loan of less than $40k and pay 50% less of monthly payments. I believe it is a practical goal for me.

How can I do it? That' what I mean the other side of a coin: know the "sofeware" real estate well enough to set your own rule to play with a lender, not to follow theirs.

If I go out to help the general public with less funds they have, believe me, I won't talk about those public or private useless plans that are at the mercy of those greedy lenders. I won't do lip service to give advice only.

Trust me I will use my expertise and the rational market forces to only give real good, solid and practical stuff to the weak publics.


p. s. Sorry, I made a brief coment above. I owe you guys a better one.

Bank Coalition Near Accord to Freeze ARMs - WSJ

lol