perhaps some good news? Obama to tackle foreclosures next

[notadmblnd]

IMO, this needs to be done ASAP:



Obama was expected to offer help to homeowners on the brink of foreclosure. Details have not been disclosed, but the nature of the crisis suggested mortgage loans would have to be revalued downward, along with interest rates.

"We obviously have a major problem: problems with foreclosure, problems with people living on the edge and problems with home values around the country just plummeting," adviser David Axelrod said.

http://www.freep.com/article/20090216/NEWS15/902160345

[Oregone]

1. How many payments do I have to miss to qualify.

Ill quit paying tomorrow!

[Morning Dew]

2. I think that many homowners could keep their homes

if the 30 year mortgage was extended to 40 years. They'd get a lower payment and they'd pay what they contracted for.

If the home price is simply devalued, they will reap a profit when home prices rise again.

[marketcrazy1]

6. do the math

on extending a 30 year fixed out to 40 years. marginal decrease in payments but substantial increase in interest.

[Morning Dew]

7. I don't know the solution. It sickens me to think of the likely eventual windfalls on devalued homes

It's not right.

I didn't rush out to buy a house that I couldn't afford. Why should folks who made that decision then reap a profit.

I know there are people who have had financial misfortune. I'm not talking about them.

[marketcrazy1]

10. I understand

I was not trying to be critical. forgive me if my post came across that way. there are no simple solutions.

[Morning Dew]

12. I didn't think you were being critical. No worries.

Your point made sense - not much lower payments, more interest.

No simple solutions is a fact. There has to be a good way for people to save their homes... there are still a lot of ARMs out there ready to jump.

[notadmblnd]

16. I didn't buy a house I couldn't afford either.

I think it's a popular misconception. I made every payment on time for the past 10 years. I'm losing approx 1/2 of my income in April. The amount I've paid over the last 10 years, when I sat down and figured it out.. is that I've paid off the principal 2xs. Now I should have to lose my home?

No, I think this should be done across the board for every homeowner, delinquent or not.

[Morning Dew]

18. There certainly needs to be some relief.

But for those of us who didn't purchase a house, where's our relief? When you go to sell your house someday, you'll reap the benefit of this assistance.

We'll all participate in paying for the assistance, some of us will only participate in paying.

[Johonny]

17. I agree

[notadmblnd]

15. The way I figured it, I've paid the principal balance 2x in 10 years.

if it weren't for interest, my mortgage would be paid off.

[grasswire]

3. rent skimming needs to be outlawed everywhere...

...as it is in California.

What is rent skimming?

It's when the landlord of a rental property takes the rent but does not pay the mortgage on the property, and it goes into default and the renters are evicted despite having paid their rent.

Renters often lose their deposits. The displacement of families is tragic. This is happening to families across America.

It's happening to my family. My landlady hasn't paid the mortgage since September. The bank intends to sell the house on the steps of the courthouse.

In California, rent skimming is a felony. It needs to be outlawed everywhere.

[Life Long Dem]

4. That's just a band-aid.

Until the homeowner has a job, they can fall through the cracks. With jobs the homeowner doesn't need to live on the edge.

[mmonk]

5. Yes, this should be part of a lead off measure.

[flvegan]

8. Why not just cut the rate of the note?

Reduce the interest rate, not the amount of the loan.

[Lance_Boyle]

9. precisely

cut the rate and extend the term. people will wind up paying more in interest, but they get to stay in the homes they otherwise could not afford. cramming down the principle unjustly rewards those who (most often knowingly) bit off more house than they could afford to chew. no sense in rewarding that. keep the house, extend the loan term, and reduce the interest rate correspondingly.

[Xenotime]

11. There should be a tax break for those who host 2 or more families in their homes

I realize how rethug the "tax break" thing sounds but i mean some kind of incentive.

Free food maybe.

[4lbs]

13. They should convert all mortgages into 4% fixed rate.

Many of the ones that failed initially were ARMs where people who were borderline credit risk saw their payments increase from $1500 or $1800 monthly to $3000 monthly or more. They couldn't pay this higher rate, they defaulted, leading to foreclosure.

As this started happening all over, the property values of other homes nearby decreased so those with standard fixed-rate were finding themselves paying more than the home was worth. Some decided to walk away, defaulting, and leading to yet more foreclosures, and yet even lower property values for those remaining.

This vicious cycle continued for several years.

Convert all mortgages to 30 year, 4% fixed rate, backed by the federal government.

A $250,000 financed home, with such a setup will have a monthly payment of around $1560.

At 5% fixed rate, the monthly payment is above $1700.

Anyone have their homes at 7% or higher? At $250,000, such a home would have a monthly payment over $2000 @ 7%.

Consider many of the homes in CA that were selling for $400K or higher.

What's the difference in such a home financed at 7% versus 4%?

$400K @ 7% = At least $3200 monthly payment

$400K @ 4% = About $2500 monthly payment

That $700 difference monthly is huge.



1.) Make all mortgages 30 year 4% fixed-rate, with federal government "insurance". Note, this is only for homes that people will actually reside. Their primary residence. House flippers or those that want a bunch of homes pay a higher rate, say 5%. Homes were meant to be lived in, not bought and sold, traded around like collector's cards.

2.) Eliminate ARMs. Sure, they seem like a good idea at the beginning, especially when monthly payments are low. However, the payor is playing a betting game with the lending company that they can refinance or sell the home and pay it off before the payments increase. They often lose this game, taking other people with them.

[Ilsa]

14. My brother-in-law in Wyoming says there are several houses for

sale in his neighborhood, and a couple of foreclosures already. He also said more people are paying for groceries with credit cards, but he doubts it is debit cards, although I don't know how he'd know.