No More Walking Away From Mortgages/Houses

[SAMSON123]

Well it looks like there is no getting away from a mortgage you can not pay. Fannie and Freddie will come after you

Fannie Mae to penalize homeowners who walk away


By EILEEN AJ CONNELLY, AP Business Writer – Wed Jun 23, 4:35 pm ET

NEW YORK – Government-sponsored mortgage purchaser Fannie Mae is trying to encourage distressed homeowners to find alternatives to foreclosure by banning those who walk away from getting new loans for seven years.

Troubled borrowers who do not try in good faith to work out a deal, but have the capacity to pay, are targeted by the policy announced Wednesday.

"Walking away from a mortgage is bad for borrowers and bad for communities and our approach is meant to deter the disturbing trend toward strategic defaulting," said Terence Edwards, executive vice president for credit portfolio management.

A strategic default occurs when a homeowner stops making payments on a mortgage despite being able to do so. It has become increasingly common in communities where housing values fell sharply and homeowners are "underwater," or owe more than their houses are worth.

Fannie Mae said that in locations where the law allows, it also plans to take legal action to recoup outstanding mortgage debt from borrowers who strategically default. The company plans to instruct its servicers to monitor delinquent loans facing foreclosure and recommend cases to pursue for such judgments.

A spokesman for fellow government-backed mortgage buyer Freddie Mac said its current policy requires at least a five-year wait. Freddie Mac will "take a close look" at the new Fannie policy, said spokesman Brad German. "We'll consider it in light of current market conditions in order to manage our risk as effectively as possible."

Fannie and Freddie were created by Congress to buy mortgages from lenders and package them into bonds that are resold to investors. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion. That's about half of all mortgages.

The wave of foreclosures affecting Fannie and Freddie loans has caused a major problem for the U.S. government, which effectively guarantees the loans.

The government seized control of Freddie and Fannie in September 2008, a rescue that has cost taxpayers $145 billion so far. The two companies show no signs of becoming self-sufficient.

In announcing the new policy, Fannie Mae said homeowners who make a good faith effort to resolve their situation with their mortgage companies, and those who have extenuating circumstances, will be eligible for new loans in a shorter time period. The company did not detail how long the wait might be.

Fannie Mae shares fell 1 cent to close at 41 cents. Fannie Mae shares finished unchanged at 48 cents. Both companies plan to delist their shares from the New York Stock Exchange because they don't meet listing requirements that they remain above $1 per share.

[240 is Back]

if a person borrows 500k and completely abandons it... I'm all for them not getting another home loan for 7 years.

I had no clue a company would give a person a SECOND loan after they abandoned a first

[Eyeball Chambers]

People should start taking their obligations seriously... 

[Fury]

So people are actually going to be held responsible for the mortgages they took out? The nerve of these companies! 

[Eyeball Chambers]

So people are actually going to be held responsible for the mortgages they took out? The nerve of these companies! 

haha 

[Bindare_Dundat]

So people are actually going to be held responsible for the mortgages they took out? The nerve of these companies!  

Yeah, it's not like Fannie and Freddie owe anyone any money.  

Banks get the house, fuck em.

[quadzilla456]

So people are actually going to be held responsible for the mortgages they took out? The nerve of these companies!  

Well they should fix interest rates at 4% on mortgages. That's more than enough for the banks - who incidentally don't have the funds to back up all the money they loaned. It is a pyramid scheme. If everyone demanded their money back from the banks at the same time they would fold as fast as Ponzi's Scheme did. To be honest it is fake paper money that the banks are creating to begin with. Home prices should never have gone so high in the first place. If people actually had decent paying jobs and interest rates were higher they would have saved their money instead of depending on "equity" they thought they had in their homes.

These companies were morons with their ARM plans. What did they think these homeowners would have been able to keep up the payments?? They do have a nerve. Don't let these jackasses off so easy.

[Bindare_Dundat]

These companies were morons with their ARM plans. What did they think these homeowners would have been able to keep up the payments?? They do have a nerve. Don't let these jackasses off so easy.

This^


The risk of lending under those circumstances,  what did they expect was gonna happen?

[Soul Crusher]

Well they should fix interest rates at 4% on mortgages. That's more than enough for the banks - who incidentally don't have the funds to back up all the money they loaned. It is a pyramid scheme. If everyone demanded their money back from the banks at the same time they would fold as fast as Ponzi's Scheme did. To be honest it is fake paper money that the banks are creating to begin with. Home prices should never have gone so high in the first place. If people actually had decent paying jobs and interest rates were higher they would have saved their money instead of depending on "equity" they thought they had in their homes.

These companies were morons with their ARM plans. What did they think these homeowners would have been able to keep up the payments?? They do have a nerve. Don't let these jackasses off so easy.

Go read this book.  If only 3% of the people asked for their money back the entire system immediately collapses. 

[Fury]

Yeah, it's not like Fannie and Freddie owe anyone any money.  

Banks get the house, fuck em.

Ahh, so because the companies are assholes that means the rest of the people can act like them as well. I'll be right back, on my way to buy a mansion and lambo that I have no intentions of meeting the payments on. 

[kcballer]

I don't agree with walking away from your obligations.  Greed on both sides fueled the continuing meltdown.  Millions of people thought they couldn't lose and over reached.  Sorry but you wanted 5 bedrooms and granite counter tops.  Now you pay for it and deal with your stupidity. 

[Bindare_Dundat]

Ahh, so because the companies are assholes that means the rest of the people can act like them as well. I'll be right back, on my way to buy a mansion and lambo that I have no intentions of meeting the payments on.  

Go ahead. If the banks are stupid enough toallow you the means to get those things without checking up on you then enjoy. See what being a stand up guy about this situation gets you when the banks were out to fuck you. I think MOST people understand the consequences of not paying and purchase with the intent of paying to own untill the debt is payed.

Anyway, contracts are broken all the time, no one is a slave. Of coarse if the folks can pay, they should, but if you suffered due to the games other people played and they get a bailout then everyone should be equal in that respect. The banks got the homes and a bailout, the people get a shitty cedit score for years and have to carry the rest of the burden of holding the system together through their sweat. Riiight. Why don't you ask them to stick it a little deeper next time?

[quadzilla456]

I don't agree with walking away from your obligations.  Greed on both sides fueled the continuing meltdown.  Millions of people thought they couldn't lose and over reached.  Sorry but you wanted 5 bedrooms and granite counter tops.  Now you pay for it and deal with your stupidity. 

Then I guess you agree that banks should not have walked away from their obligations. But they did by getting a bailout. Their obligation was to fail and go out of business like any that makes bad bets. But they were bailed out by their buddies in DC.

Also some people have no choice but to walk because they can't afford it - an ill spouse, losing their job, homes that have a shit load of problems because they were built like shit and should never have been sold, the list goes on. If you are going to hold the homeowners responsible for taking out risky loans then by those same standards should you hold the banks accountable for issuing those same loans.

What did the banks think were going to happen with those ARMs once the interest rates went up???

I will say again interest rates should have been fixed at 4% which is more than enough for any bank. It makes even more sense when you have a risky borrower to fix them at a low rate because at the higher ARM rate they are guaranteed to default.

[225for70]

Go read this book.  If only 3% of the people asked for their money back the entire system immediately collapses. 

Great book...

Another problem to worry about in life...Abolishing the monster that is the fed...

[Slapper]

[...]What did the banks think were going to happen with those ARMs once the interest rates went up???[...]

Oh, banks knew alright! One has only to look at the Goldman Sachs fiasco to find out how deep these companies were in the loop. Make no mistake, in the loop they were. See, the checks and balances from the SEC are mostly in the backoffice. The front office is given free reign to make a buck, at all costs. These are all for-profit entities, so it is no wander that when faced with the dilemma of choosing the ethical or the profit route they will always choose the profit route.

That's how you get crook companies like Goldman selling securities their front offices will bet against heavily. It's like banks approving mortgages for houses THEY KNOW are not worth 30% the lent amount. Banks had it easy, all they had to do is check the housing prices in 1995 and lend money based on reasonable price gains. They are perfectly aware of a pure gain and an inflationary gain. They know this shit in and out. Left and right. They may play stupid now, but they knew all along. I mean, all the financial companies announced huge losses when the market collapsed, but noone underlined the immense amounts of money these companies made when the market was going up and decided to give it away to a handfull of rich motherfuckers.

[quadzilla456]

Oh, banks knew alright! One has only to look at the Goldman Sachs fiasco to find out how deep these companies were in the loop. Make no mistake, in the loop they were. See, the checks and balances from the SEC are mostly in the backoffice. The front office is given free reign to make a buck, at all costs. These are all for-profit entities, so it is no wander that when faced with the dilemma of choosing the ethical or the profit route they will always choose the profit route.

That's how you get crook companies like Goldman selling securities their front offices will bet against heavily. It's like banks approving mortgages for houses THEY KNOW are not worth 30% the lent amount. Banks had it easy, all they had to do is check the housing prices in 1995 and lend money based on reasonable price gains. They are perfectly aware of a pure gain and an inflationary gain. They know this shit in and out. Left and right. They may play stupid now, but they knew all along. I mean, all the financial companies announced huge losses when the market collapsed, but noone underlined the immense amounts of money these companies made when the market was going up and decided to give it away to a handfull of rich motherfuckers.

Good point.

[quadzilla456]

Go read this book.  If only 3% of the people asked for their money back the entire system immediately collapses. 

I think I should. Heard a lot about it.

[Slapper]

Good point.

Honestly? I think it's a sad point more so than a great point. I mean, we're handed this shit and the media plays its part in making people think they actually have a chance to fix this shit. WE DON'T.

I work in the back office for a huge financial Swiss firm, the one that got kicked in the ass for holding secret accounts for US clients and advising clients that it is OK to commit tax fraud. We, in the back office, get all the checks and balances. What? You need to wire 100 million USD to a bank in Finland? You need 150 signatures from your supervisor to the CEO, two blood samples and a certificate of honor from God. Now, the front office that ordered the transfer of funds IS NOT CHECKED AT ANY SINGLE POINT in the process.

No one is checking to see why we're wiring 100 million to Finland, for whom and what the business is. Wild west mentality at its worst. And this is the same all across the financial services industry. Well, not for long, because companies are now outsourcing all the jobs to India (which now has the capacity to be a financial hub because the US taxpayer financed all the cable laying from here to Hyderabad mind you-it was called "the internet bubble"). Now, there are restrictions in place that prevent someone in India from knowing your account number in the US bank. But make no mistake, these restrictions will be demolished sooner or later. All it takes is one of these deregulation assholes to get to power and boom, hundreds of thousands of US jobs sent overseas.

That's the way it is (and has always been).

From an insider.

[Soul Crusher]

Honestly? I think it's a sad point more so than a great point. I mean, we're handed this shit and the media plays its part in making people think they actually have a chance to fix this shit. WE DON'T.

I work in the back office for a huge financial Swiss firm, the one that got kicked in the ass for holding secret accounts for US clients and advising clients that it is OK to commit tax fraud. We, in the back office, get all the checks and balances. What? You need to wire 100 million USD to a bank in Finland? You need 150 signatures from your supervisor to the CEO, two blood samples and a certificate of honor from God. Now, the front office that ordered the transfer of funds IS NOT CHECKED AT ANY SINGLE POINT in the process.

No one is checking to see why we're wiring 100 million to Finland, for whom and what the business is. Wild west mentality at its worst. And this is the same all across the financial services industry. Well, not for long, because companies are now outsourcing all the jobs to India (which now has the capacity to be a financial hub because the US taxpayer financed all the cable laying from here to Hyderabad mind you-it was called "the internet bubble"). Now, there are restrictions in place that prevent someone in India from knowing your account number in the US bank. But make no mistake, these restrictions will be demolished sooner or later. All it takes is one of these deregulation assholes to get to power and boom, hundreds of thousands of US jobs sent overseas.

That's the way it is (and has always been).

From an insider.

UBS has a gorgeous building in Stamford.

[Slapper]

No, the other one, CS.

[quadzilla456]

Honestly? I think it's a sad point more so than a great point. I mean, we're handed this shit and the media plays its part in making people think they actually have a chance to fix this shit. WE DON'T.

I work in the back office for a huge financial Swiss firm, the one that got kicked in the ass for holding secret accounts for US clients and advising clients that it is OK to commit tax fraud. We, in the back office, get all the checks and balances. What? You need to wire 100 million USD to a bank in Finland? You need 150 signatures from your supervisor to the CEO, two blood samples and a certificate of honor from God. Now, the front office that ordered the transfer of funds IS NOT CHECKED AT ANY SINGLE POINT in the process.

No one is checking to see why we're wiring 100 million to Finland, for whom and what the business is. Wild west mentality at its worst. And this is the same all across the financial services industry. Well, not for long, because companies are now outsourcing all the jobs to India (which now has the capacity to be a financial hub because the US taxpayer financed all the cable laying from here to Hyderabad mind you-it was called "the internet bubble"). Now, there are restrictions in place that prevent someone in India from knowing your account number in the US bank. But make no mistake, these restrictions will be demolished sooner or later. All it takes is one of these deregulation assholes to get to power and boom, hundreds of thousands of US jobs sent overseas.

That's the way it is (and has always been).

From an insider.

What I meant by good point is: "valid point". I don't think it's good at all. It's fucked up that's what it is. Look at the riots in Toronto going on. When's the last time that happened? Just wait and see the riots starting in USA. These so called "leaders" are so incompetent, corrupt, clueless, childish and prostituted they will keep looking the other way and do what they have been doing since they were the eager "overachievers" in school - the kind nobody could stand.

Pelosi and Clinton - since when did they get the idea in their little "pea brained heads" that they could be "leaders" and "problem solvers". Give me a fucking break. We know they are all prostitutes but in their case it should have been a literal occupation.

[225for70]

UBS has a gorgeous building in Stamford.

I know a guy who used to work there.

[Soul Crusher]

I know a guy who used to work there.