Comments on: The Government’s Loan Mod Bizarro World

By: Shaunte Konigsberg

Shaunte Konigsberg — Sun, 17 Oct 2010 18:53:20 +0000

That makes sense to me but does this?

If it wasn’t for the last minute, nothing would ever get done.

By: Gary Rochelle

Gary Rochelle — Tue, 11 May 2010 23:56:03 +0000

Is anyone aware of a blog, www, etc discussing FDIC-directed foreclosures in the commercial arena? I’m getting hammered, and cannot find anyone to talk to. Thanks, Gary

By: Bruno

Bruno — Fri, 16 Apr 2010 18:18:08 +0000

Whatever happened to just taking our medicine, biting the bullet, and dealing with reality? I fail to see how taking money from some and giving to others (banks, debtors) through programs like this do any lasting good.

The market will, if allowed to, straighten all this mess out. Propping up a rotting system for years only leads to uncertainty and distortions that can do no good.

By: Patrick Pulatie

Patrick Pulatie — Fri, 16 Apr 2010 14:52:11 +0000

Tim,

Good update on the situation. I had not yet reviewed the latest HAMP update, so you beat me to it.

For people who would like to read my original article about HAMP=Foreclosure, written March 29, 2010, you can find it on my website at http://loanfraudinvestigations.com/loan-modification/hamp

ML-IMPLODE.COM also just posted it on the blog, with my permission.

By: Tim

Tim — Fri, 16 Apr 2010 13:56:16 +0000

Thanks for that – it’s all starting to make sense now…

By: nick

nick — Fri, 16 Apr 2010 13:38:20 +0000

its a lot worse than that, i work for a loan mod co in miami. most borrowers have lost income and their homes are worth less that have of what they owe. this market butchered them and the banks would really have to eat a lot of principal to modify these mortgages. in fl it is mandatory that borrowers go through mediation if they are severely behind on their mortgage, so this market will take a long time to settle since the courts are backlogged and less that 20% of delinquient borrowers have been through the process

By: Mark G.

Mark G. — Fri, 16 Apr 2010 13:37:21 +0000

It would have been useful to point out that the money that the government spends on a failed modification goes to banks, not homeowners. Typically, the government will have subsitituted an FHA insured mortgage for the original mortgage issued by a bank. This means that when a redefault takes place, the bank will have received most of the principle back on the loan, with the government incurring the loss on the redefault. The net result of this policy is that far more money is likely to be given to banks through the HAMP than to homeowners. This should have been pointed out in this article.
http://www.cepr.net/index.php/blogs/beat-the-press/money-for-failed-modifications-goes-to-banks-not-homeowners/

By: Mark G.

Mark G. — Fri, 16 Apr 2010 13:05:44 +0000

Once these mods are completed, don’t they then belong to the taxpayers via FNM/FRE? If so, there is no problem, right?

By: Bulfinch

Bulfinch — Fri, 16 Apr 2010 05:03:43 +0000

Dan — In fact, Elizabeth Warren has said as much.

By: Dan

Dan — Fri, 16 Apr 2010 03:18:52 +0000

What if we redirected Elizabeth Warren’s advice to homeonwers to banks?

Some of you should stay in Business…and some of you don’t belong in business and you’ve got to be shut down. And frankly, your assets need to be marked to market and get into the hands of people who can properly evaluate risk. In other words, acknowledge the problem, deal with it, write off the losses and start rebuilding an economy on solid ground.