Fitch Rating Ltd. is projecting 75% default rate on modified home loans. It means 25% of homes will be saved from the foreclosure. How do you measure success or failures of modification plans? Is it by the cost of dollar to American tax payer? Or by saving 25% of the neighborhoods? Is it by saving [...]
Fitch Rating Ltd. is projecting 75% default rate on modified home loans. It means 25% of homes will be saved from the foreclosure. How do you measure success or failures of modification plans? Is it by the cost of dollar to American tax payer? Or by saving 25% of the neighborhoods? Is it by saving in social service cost of homelessness or by saving 25% of banks? Of course I am assuming many banks and neighborhoods may have gone down without the program. Cumulative effect on the economy could have been worsened. Had my crazy American solution been adopted, the result could have been much better. How do you spread the cost over such a wide variety of factors?
The issue is we need to find the reason why 75% will fail. What preventive measures can we take? Where does the fault pan? How do we improve the results? Main street experience is that lenders are still unresponsive. It takes uniformity to get anything from the lenders. The staff is unlinked. We also need to separate incurable defaults. These are homes under the water containing strategic defaults or borrowers who have no incomes to support the mortgages. We need to turn them into renters as soon as possible with 2-3 years commitment do the inventory does not depress the housing market.
At this point it may also state that our entire system foreclosure process needs at least a fine tuning. The system works fine as long as the housing market is in an upward curve. However in down cycle, the system quickly exasperates the housing economy putting more pressure on regular re-sale market. Having our laws cast in concrete, we need a paradigm shift in thinking in all parties. For example:
- Lenders need to consider social partners in crime effects
- Borrowers need to evaluate their own responsibilities
- Trustees duties and powers should be remained and perhaps widened
- Third party roles such as mediators, brokers, and consulting agencies should be considered
- Government responsibilities as guarantors
- Foreclosure is not an issue between borrower and lender as its consequences are far reaching
Dear Mr. President Obama,
Please consider my crazy-insane solution for all American Freedom forever.
USA is paying $ 450 Billion dollar in the interest payments. Next year it will $ 525 Billion and then following next year will be $600 Billion dollar. Before you give us loan modification, please ask and get the loan modifications on all [...]
Dear Mr. President Obama,
Please consider my crazy-insane solution for all American Freedom forever.
USA is paying $ 450 Billion dollar in the interest payments. Next year it will $ 525 Billion and then following next year will be $600 Billion dollar. Before you give us loan modification, please ask and get the loan modifications on all US obligations, especially from the foreign powers that dumped the cheap goods here and opened the main canal for them to suck the dollars. With the saving of one trillion five hundred billion dollars, we can accomplish followings.
- Pay off all US home mortgages over next four years to 50% LTV. All mortgages will be solid. Banks will be liquid and no more toxic assets on their balance sheets.
- US Home owners will be rock solid for their retirements. In exchange, Social payments will be reduced. This is like raising income of each household for almost $ 20-30,000 forever. In exchange, home owners will give you 2nd TD at 1% interest rate (which Banks offer you anyway). You will be paid back when property is sold or refinanced again. Additionally home owners will loose mortgage deductions.
- Require US bank to waive interest on mortgages for four years in exchange of 1/4th principal payments or reduce to the rate that they pay. (It is better than writing off 40% of loan balance).
- Since Americans will be saving $ 250-300 billion dollars in interests, the savings will be circulated many times in economy. As Fed and states collect 40% of all income as the taxes, this will pay itself $ 350 billion that USA will be investing with American Home Owners every year for next four years.
- Require all Banks to invest these mortgage principal payments in small businesses and starts ups and not in foreign securities. It will create more jobs, more income for the treasury.
- American Credit card debt will be reduced. Require Banks to reduce the interest rate to 5%. It is a good return when Banks are getting money from Fed at 1% or less.
- Home owners will have purchasing powers of $ 250 Billion dollars boosting unprecedented consumer spending every year.
- What do you do with all these 2nd mortgages? You can securitize. With US backing, it can get triple”A” rating and get your money back in a year so
- Homeless problem almost solved.
- More Kids will be in colleges.
- What about people who do not own home now? Give them 20 Years tax credit of equal value if they buy home.
Most politicians and Nobel laureate economists will say this will never work. After all, they were wrong all the time. Give me the chance one time. With my plan, everybody gets what they want. You get your money back. Bankers are liquid and lending again. Americans are happily living in their home forever. Credit cards are gone. Only difference with your plan and my plan- How do bankers get the money. Hope to hear from you soon.
PA
Note to my blogger friends- Hey if you like the idea send it to your friends.
Today is our independence day. We need to take the stock of our independence. According to Treasury Department, our national debt is $ 11,518,472,742,288 as of last Wednesday. Many of us cannot even read the number. China, Japan and Oil exporting countries are our largest creditors. Interest payments are now [...]
Today is our independence day. We need to take the stock of our independence. According to Treasury Department, our national debt is $ 11,518,472,742,288 as of last Wednesday. Many of us cannot even read the number. China, Japan and Oil exporting countries are our largest creditors. Interest payments are now $ 452,000,000,000 annually. This year our estimated deficit is $ 1,850,000,000,000. It means increasing debt service by additional $ 75,000,000,000 approximately. Are these numbers too big? Wait until you hear this: US Government has $45,000,000,000,000 in unfunded liabilities for the retirements and health commitments. The total is over $ 56 TRILLION. These numbers will keep rising for a foreseeable future. To understand the magnitude of these numbers, divide them by the number of persons living in United States. It is $ 186,000 per person! Some economists will try to calm you down by converting these numbers to a percentage of gross national product. Who cares for GNP? All we care is what $ 450,000,000,000 debt service is doing to our personal fortunes. How would like to eliminate all of your income taxes? Or take care of your major medicals or medicines without any cost? How about free education to all your children? How about making all homes free and clear in 3 years? I cannot list even all the things we can accomplish. Whoever thinks we are on a viable course must be crazy. No wonder our homes are in foreclosures as government takes 40 cents of each dollar you make. Can we not pay our mortgage from forty percent of our income?
These are the domestic concerns but let tell you how it plays internationally and on our future lives. Just one example. China has almost $ 700,000,000 in US Paper. She cannot spend the dollars enough and it keeps piling up. It is getting close to monopoly money. So she goes to African countries and gives out few billions in aid here and there and in turn gets mining rights on cobalt and other precious minerals. Africa has 60% of world supply of Cobalt. Cobalt is the essential material for all electronic equipments. Do you get the picture? Cobalt is not the only material. Low cost or no cost loans to Poor nations of Africa are to be repaid in oil and other materials at bargain prices to keep the factories at home humming for the low cost products to be exported to USA and diplomatic favors on the world stage. Vicious cycle continues.
There is nobody to blame but our collective failure to grasp the enormity of the effect of the global village. Our personal day to day decisions as to our buying habits, leadership failures and limited and short term approach caused this quagmire. I wish our leaders had addressed the balance of payments in trade for last 30 years? When you import more, you export the job. When you export the job, some one else owns the home. This is the simple economics that prevails in the end.
This Friday was a black Friday for the employment news. 48 states recorded higher rate. Six states broke the previous records. Only luckier ones were Nebraska and Vermont. California and Nevada went up the hill with 11% or more, highest in 25 years. The salt on the wounds is the prediction by the Chairman Ben Bernanke [...]
This Friday was a black Friday for the employment news. 48 states recorded higher rate. Six states broke the previous records. Only luckier ones were Nebraska and Vermont. California and Nevada went up the hill with 11% or more, highest in 25 years. The salt on the wounds is the prediction by the Chairman Ben Bernanke that the improved economy will not help. The companies would not rush to hire immediately. How many of us know the unemployment picture is not the whole truth? I remember the government during Regan era changed the way it calculates the unemployment rate just to look it good for them.It does not count those who gave up the job search after six months!!! My friends, We do not know the bottom. If you think you are through with these numbers consider the following.
There is lots of commotion about the loss of economic values to Lenders, homeowners and ultimately to governments. It seems nobody is talking about a loss that is unseen but felt very deeply, personally and at social structure of our existence. A scenario develops likes this: A breadwinner is unemployed or cannot work for what [...]
There is lots of commotion about the loss of economic values to Lenders, homeowners and ultimately to governments. It seems nobody is talking about a loss that is unseen but felt very deeply, personally and at social structure of our existence. A scenario develops likes this: A breadwinner is unemployed or cannot work for what ever reason. He is now mentally down and doubting his abilities. His chances to get proper work, salary and to pay the bills are very weak. He starts asking family members to cut down expenses, the first signs of stress and tension.
At this very point of time comes the foreclosure notice. Now the whole family is worried about the keeping roof over the head, making choices between roof and bread. If spouses are not intimately and psychologically connected, a stress also begins to develop in their marriage. Patience is in short supply. Anger is plenty. Ultimately children begin to feel the pain also. Family goes further down mentally.
If a divorce happens or person goes into deep depression, the mental damage is enormous. When we think of this loss to millions of people, we cannot even begin to evaluate the loss. I have seen people feeling suicidal syndrome or even committing the suicide.
Who is responsible for this? We cannot just blame the person going over board. The managers of our nation’s economy, lenders, brokers, appraisers and society as a whole contributed to this downfall. The accumulated damage to our social structure is enormous. Is any mental stimulus available from President Obama or President Bush or from Investment bankers?
When you are in need of money to expand your business or buy a new home, what do you do? Normally, you would go to the bank or any other creditor and issue a loan against collateral. In return of the money borrowed, you agree to pay predefined installments or mortgages to repay [...]
When you are in need of money to expand your business or buy a new home, what do you do? Normally, you would go to the bank or any other creditor and issue a loan against collateral. In return of the money borrowed, you agree to pay predefined installments or mortgages to repay the loan. However, what happens if you are not able to pay the predefined installments in time? The bank first calls you up to remind you of the delayed installments. In case this does not work, the bank sends you a notice through post. However, if both these methods do not work out, the bank resorts to legal means to secure the collateral in return of the borrowed money. This legal procedure wherein the bank or any creditor obtains a court-ordered notice to secure the collateral against the loan is known as legal foreclosure.
Legal foreclosure is a way the bank or any other creditors can get back their money. If you fail to respond to the legal notice, the bank or other creditors have all the right to give advertisements in the print media and conduct an auction to sell the collateral to recover their money. Do you know what this means? This means that you lose the home that you worked so hard to buy. Do not ever let this happen to you! You can save your home from foreclosure by keeping your mortgage payments high on your priority list. In case you have trouble making payments, save your home from foreclosure by getting credit counseling or going ahead for a debit management program. You can get more information about these from your lender.
Protection from foreclosure can save you from a lot of trouble. You can save your home or any other collateral by being aware about how to get the right protection from foreclosure. There is nothing wrong in taking a loan; however, keeping yourself aware about what can go wrong in case you are not able to make the mortgage payments is a must! This will help your family and you keep away from a lot of troubles.
Banks or other financial institutions lend you money against collateral. However, if you fail to make regular mortgage payments, the bank or other financial institutions have the right to reclaim their money by selling the collateral. The legal proceeding to repossess the collateral from a defaulter in return for their money is termed [...]
Banks or other financial institutions lend you money against collateral. However, if you fail to make regular mortgage payments, the bank or other financial institutions have the right to reclaim their money by selling the collateral. The legal proceeding to repossess the collateral from a defaulter in return for their money is termed as legal foreclosure. After possessing the collateral, the banks or other financial institutions have the liberty to sell it to get back their money. If you have also taken a loan, you need to keep certain important things in mind to avoid legal foreclosure. These are:
· Keep your mortgage payments high on priority. Do not ever delay the mortgage payments. Make sure you pay these mortgage payments before paying your credit card bills or any other unsecured debts. Even if you fail to pay the other bills, at the most you can be charged late fees or have an impact on your credit history; however, you will certainly not lose your collateral. This is one good way to ensure protection from foreclosure.
· There are several programs that can benefit you in case you have trouble making the mortgage payments. The credit counseling and debt management programs are offered by lending institutions as well as other agencies to help the debtor save his/her collateral. You can benefit from these programs whenever you encounter trouble in making mortgage payments and can save your home from foreclosure.
· Keep your lending institution in complete faith. In case you cannot make the mortgage payments, do not wait for a letter or legal notice. Let the lending institution know about this immediately! In most cases, the lending institutions are willing to work out a way, if you provide them with bank statements and other relevant documents that explain your current financial condition. This will help you gain protection from foreclosure.
· If you are going through an acute financial crisis, you can even ask for your loan to be restructured. With restructuring, the loan term can be extended and/or the interest rate on the loan can be reduced. This can prove to be a great help to you and can help you save your home from foreclosure.
These are just a few of the ways by which you can avoid foreclosure. However, adhering to these can save you from a lot of trouble!
There is lots of commotion about the loss of economic values to Lenders, homeowners and ultimately to governments. It seems nobody is talking about a loss that is unseen but felt very deeply, personally and at social structure of our existence. A scenario develops likes this: A breadwinner is unemployed or cannot work for what [...]
There is lots of commotion about the loss of economic values to Lenders, homeowners and ultimately to governments. It seems nobody is talking about a loss that is unseen but felt very deeply, personally and at social structure of our existence. A scenario develops likes this: A breadwinner is unemployed or cannot work for what ever reason. He is now mentally down and doubting his abilities. His chances to get proper work, salary and to pay the bills are very weak. He starts asking family members to cut down expenses, the first signs of stress and tension.
At this very point of time comes the foreclosure notice. Now the whole family is worried about the keeping roof over the head, making choices between roof and bread. If spouses are not intimately and psychologically connected, a stress also begins to develop in their marriage. Patience is in short supply. Anger is plenty. Ultimately children begin to feel the pain also. Family goes further down mentally.
If a divorce happens or person goes into deep depression, the mental damage is enormous. When we think of this loss to millions of people, we cannot even begin to evaluate the loss. I have seen people feeling suicidal syndrome or even committing the suicide.
Who is responsible for this? We cannot just blame the person going over board. The managers of our nation’s economy, lenders, brokers, appraisers and society as a whole contributed to this downfall. The accumulated damage to our social structure is enormous. Is any mental stimulus available from President Obama or President Bush or from Investment bankers?
