$26B mortgage deal will it help the average home owner?
By EvanHunter
@EvanHunter (4026)
United States
February 12, 2012 6:37am CST
http://www.cbsnews.com/8301-505268_162-57374482/$26b-mortgage-deal-who-gets-the-money/
First of all let me say I know very little about this "deal" or what the settlement was even for. I ran across this because I found a poll that asked if it would really help homeowners and over 90% said no.
$5 billion to homeowners who were illegally foreclosed on which converts to about $2k per person. If I as an individual who circumvented the law and seized someone's home I don't think I would only pay $2k, I would be in jail. Trillions of dollars that were wiped out in home equity since the crash.
DO you think this will help the average homeowner? Or is this more politics as usual so the administration can say look what we have done for the homeowners? Please feel free to add anything you know about it.
1 person likes this
3 responses
@knoodleknight18 (917)
• United States
13 Feb 12
My guess is that $2000 won't even cover the fees related to buying a house. Its like losing your leg, but getting your toes back. The banks already got $700 billion to help cover the loss of those loans, of course, maybe it would have been better to spend it actually paying off peoples mortgages.
The banks really screwed themselves here. They gave out huge loans for overpriced houses. Then when people couldn't afford them they took them back. Now the banks are kicking themselves because they gave up any chance to collect payments in leiu of getting the good back. Of course now the bubble broke and the banks are stuck with a ton of property that's constantly losing value due to a poor economy and them flooding the market with foreclosed homes. Then too add to the mess they are hesitant to loan money to anyone to buy a property that has continual upkeep and taxes. Its was an awful move, and this really does nothing to fix it.
@EvanHunter (4026)
• United States
14 Feb 12
From what I have read if a bank forecloses on a loan they can write it off as a business expense. If they allow the homeowner to sell it at the actual market value (short sale) than the bank must carry the difference on their books until the person pays it and if they don't pay up than they are forced to spend more in lawyers fees and collection departments/agencies. On top of that most large banks were part of the $16 trillion dollar loan the Fed gave out (not part of the government bank bailouts). It's not much wonder that most major banks are reporting a large profits at the end of last year.
The worst part is there is already a drive for another bank bailout. Iceland turned down the bailouts and they don't seem to be limping along like us. I have to wonder if we would still be in bad shape now if we had done the same thing. It seems like we are just trying to avoid the inevitable by putting it on future generations.
1 person likes this
@knoodleknight18 (917)
• United States
17 Feb 12
Well in anything resembling the a so-called free market. This massive foreclosure would have forced down housing values at a huge rate and created a situation where banks who weren't bankrupt could loan individuals money to buy the houses at incredibly low prices. As it is, the banks are scrapping the few they don't care to bother with and sitting on the rest, especially since they've been bailed out. So, not only has housing costs not dropped, now the price of rentals is increasing, further beating the wallets of the already poor.
@Hatley (163772)
• Garden Grove, California
12 Feb 12
hi EvangHunter I just think its too little too late for the average
home howner. I cannot see how it is enough to help them with the
cost of home owningbut it is a political ploy tomake the
politicians look good.
@EvanHunter (4026)
• United States
13 Feb 12
I am sure its nothing more than a political move to say "see we didn't let them get away with it". Like I said if it was the average Joe that pulled this we would be in federal prison.
@JenInTN (27514)
• United States
12 Feb 12
I don't think it is a drop in the bucket. Besides the fact that it is only about $2000. per family...these people have lost a lot more than that. I think the settlement is also limited to the larger banks and that sure doesn't help people that have lost their homes under other lien-holders. I saw a man on the news after this aired and he was standing in front of a house he lost crying and said that money wouldn't matter one bit now that he had lost everything. He lost his house because of layoffs and not so much the frivolous banking standards.
@EvanHunter (4026)
• United States
12 Feb 12
I would like to spend more time on this and find out exactly what laws they violated to make it an "illegal foreclosure" compared to just foreclosure but I must admit my time is short these days. I am hoping someone with more knowledge on it can tell me exactly whats legal vs illegal foreclosure.
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