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Ear to the Ground

Fed Takes a Swing at Foreclosures

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Posted on Jan 27, 2009
Foreclosure
Flickr / respres

After pumping hundreds of billions into the banking system with not much to show for it, Fed chief Ben Bernanke says he will try to reduce the number of foreclosures. As he put it to Rep. Barney Frank: “The goal of the policy is to avoid preventable foreclosures on residential mortgage assets that are held, owned or controlled by a Federal Reserve Bank.”

It’s not clear whether Bernanke’s scheme will really benefit troubled homeowners or if their plight is just an excuse to buy up more of the banks’ junk securities, but both Rep. Frank and Sen. Chris Dodd said they were encouraged by the news.

Reuters:

The Federal Reserve on Tuesday took a step toward easing mortgage foreclosures threatening millions of Americans, announcing that it would write down troubled mortgages to keep people in their homes.

Fed Chairman Ben Bernanke said the initiative would specifically include $74 billion of assets held in connection with the bailout last year of Bear Stearns and American International Group.

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By Shift, January 29, 2009 at 12:11 pm Link to this comment

Sophomoric!

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By Nozferatu, January 29, 2009 at 9:34 am Link to this comment

Ah…so you’re one of those religious freaks..OK…that makes sense now.

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By Shift, January 28, 2009 at 11:27 pm Link to this comment

Nozferatu wrote: “I’ll stick to my original statement….stop making excuses for idiots and irresponsible people.  End of story.”

End of story?  Nah, I’ll keep helping others without judgment.  Judgment is God’s.

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By Nozferatu, January 28, 2009 at 9:24 pm Link to this comment

Shaft:

Since you can’t spell my name right, I’ll return the favor.

Mortgage documents complex?  Closing documents complex?  Is that why hordes of idiots were getting their real estate and brokers licenses in droves?

Please…spare us the BS.  Don’t over-exaggerate the complexity. And frankly, if it is that complicated, no one in their right mind should a THING they are unsure of or unclear about. Would you?

Get a second opinion, talk to others who know more, get more people involved.  When someone is signing their life away, they sure took less than 20 minutes to sign that paperwork so they could hopefully double their income in 6 months.

I’ll stick to my original statement….stop making excuses for idiots and irresponsible people.  End of story.

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By Shift, January 28, 2009 at 4:27 pm Link to this comment

Nazferatu wrote: “If I can sit at a desk for 20 minutes and read a contract that will bind me to it for 30 years, so can everyone else…no excuses.  20 minutes…that all it would take.  Is that too much to ask?”

Naz, mortgage contracts are complex and many faceted.  They are in legaleze and cannot be read in twenty minutes.  Try again!

I’ll stick with my previous post that sums up my thirty years experience in the business.

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By Nozferatu, January 28, 2009 at 3:26 pm Link to this comment

Shift:

You come across as one of those people so that’s what I’m basing it on.  If you care to elaborate, be my guest…otherwise you’ll be labeled for what you appear to be.

Don’t personalize it yourself.  I’m simply stating that people should not be getting handouts and freebees for being irresponsible.  I’m not sure why that is such a difficult concept for you to grasp.  Honestly.

If an irresponsible, careless homeowner who is now in trouble because of lack of due diligence gets a handout, then people like myself who are responsible, who are not over their heads in debt, who waited for the right time to buy, should also get massive handouts. 

You’re making excuses for the most part, greedy, selfish, very opportunistic people who wanted to go for the ride and come out $100K, $200K, $300K richer in 6 months to a year…that’s the bottom line.

If you want to help people, help the ones who deserve help….not the ones who bought homes on negative amortized, pick-a-payment, or interest only loans knowing full well they’d be in deep crap in 5 years. 

Help the ones who took the time to understand what they would be getting themselves into….the ones who knew such things were too good to be true, and the ones who wanted to buy a home TO LIVE IN and enjoy..not to hopefully make money off of it in 1-2 years and move on.

I’m not rich, I’m not independent.  I work hard, I pay my taxes, and would like to own a home too.  I TOO could have been one of the suckers who bought into this stuff.  Guess what, I went to brokers, I saw what they had to say, I read the fine print, and I said NO.

If I can sit at a desk for 20 minutes and read a contract that will bind me to it for 30 years, so can everyone else…no excuses.  20 minutes…that all it would take.  Is that too much to ask?

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By Shift, January 28, 2009 at 1:19 pm Link to this comment

Nazferatu wrote: “Because for the longest time, people like yourselves believe that you can simply sit back, click you fingers, and everything will and should be taken care of for you automatically…and with no accountability on your part.”

People like me?  Get real Naz, you know nothing about me and if you did you would be 100 percent wrong.  Why make it personal.  Are we not dealing with ideas?  Do you have to insult or demonize someone who disagrees with you?  Your words do not seem to have much reality attached to them but instead only ideology.  I retired out of a business that was directly involved with the poor and B and C rated mortgages and I know well what was done to them. I personally chose not to participate in this abuse and argued strongly against it.  The corruption of Realtors, appraisers, and mortgage brokers for substantial profit greatly enabled the abuse of the poor.  I retired rather than participate in it.  I reported crimes that were never investigated.  The poor were badly used and lied to by the industry.  Others, who were speculators did know and you are correct about them.  Many families were slammed into mortgages by deceit and also deserve consideration.  Black and white thinking is dangerous when applied to a complex mess like we find ourselves in now.  Personally I am not currently effected by the mortgage meltdown but I care about those who are because I realize that no matter how well off we may be, when we do not care for others it is only a matter of time when the crisis reaches our own doorstep in one way or another. 

Unregulated self interest is a failed policy, even the father of capitalism, Adam Smith, warned us.  He said that both governmental and moral institutions need to be actively engaged in regulating capitalism or that it would fail.  It has failed and he was right.  The depths of this financial meltdown are unknown to most Americans and the consequences of it will be devistating. No one is beyond it’s reach.  It will hit your door and when it does, please don’t whine. To survive you will have to look to others for help, we all will.

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By Nozferatu, January 28, 2009 at 10:45 am Link to this comment

Shift, Hippy Ham:

I’m very sorry to disagree.  You can make excuses until you both turn blue.

But the bottom line is it is the SIGNATURE of the person on the final line that allowed them to take that loan.

Just because you are poor, does that mean you need to be careless and irresponsible?

If they are so poor, what business do they have buying a home?  That applies to me buying a home I cannot realistically afford as much as it does to someone wealthier or poorer.

Stop making excuses for people who were not responsible.  This mentality has crippled this country and has ALLOWED corporations anda system of corruption.  Why? Because for the longest time, people like yourselves believe that you can simply sit back, click you fingers, and everything will and should be taken care of for you automatically…and with no accountability on your part.

I’m sorry…no whining here.  I’ve wanted to buy a home for while but haven’t because all these whining little idiots who think they are automatically entitled to a home and now even more entitled to a handout completely screwed up the system.

Homeowners WERE NOT MADE TO FAIL…THEIR OWN GREED FAILED THEM.  No one…NO ONE put a gun to their head and told them to buy.  Every single homeowner/buyer/seller was thinking about making as much money as possible and as quickly as possible….just as much so as the scumbags in Wall Street, in the government, and in the white house. There is no difference.

Tough sh^t I say.  No one should be THAT stupid to walk into a brokerage, as for a loan on stated income, knowing full well that they can’t buy a $500K home on $30K a year.  Too freaking bad.

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By GW=MCHammered, January 28, 2009 at 8:20 am Link to this comment
(Unregistered commenter)

I lost everything three times now due to (three separate) spousal illnesses. Yeah, we had insurance. Doesn’t stop bad docs and greedy lawyers from taking it all. Now my final fund source was cut in half by Wall Street. So, gonna invest in the only thing going up in Amerika .... suicide rates. Bu$h probably holds all the shares tho.

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By hippy pam, January 28, 2009 at 8:00 am Link to this comment

My granddaughter re fied her home at least 3 times-because they could not pay their bills…..Living above their means….The bank helped them do it….When she owed 3 times what her home was worth-she walked away and filed bankruptcy…..That is WRONG!!!
The system that allowed her to go that far is WRONG!!!

so she had her husband and his father get a loan for a new house-in the father in laws name…

I don’t need a weatherman to know how this wind will blow….[I.‘m just glad it ain’t my credit and name]

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By felicity, January 28, 2009 at 7:54 am Link to this comment

Bloomberg etal sued the Fed demanding it identify recipients of its lending and the rotten assets the Fed has taken on its balance sheet as collateral - to which Bernanke replied,

“Transparency would be counter-productive.”  Bernanke is obviously not working for us, will not work for us, must not be trusted to work for our interests.

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By Allan Gurfinkle, January 28, 2009 at 7:30 am Link to this comment
(Unregistered commenter)

By Shift, January 27 at 5:33 pm #

====It is an act of class treason for the wealthy to assist the middle class and poor. 

That will never happen.  Housing prices need to COME DOWN so that people can afford them.  The problem is that people paid twice what a house was ‘worth’, they should default.  The Fed is trying to keep squeezing these saps, and to simultaneously take 50% of middle class income as interest on home mortgages.

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By Shift, January 28, 2009 at 5:40 am Link to this comment

Nazferatu: “Most people knew what they were doing and what they were getting themselves into.”

Naz, although there were some who knew I believe it is in error to suggest that most knew.  The majority of those who purchased these homes were the poor who had never owned a home.  It was all new to them and they were taken advantage of by real estate brokers, mortgage brokers and Wall Street. It was the poor who initially lost their homes and the process then worked it’s way upward.  If we have critical views of the poor, would it not be best to first apply those views to the wealthy bankers and investors, then work our way down?  The moment we stop helping one another as individuals and families is the moment we ultimately doom ourselves. 

Here’s how I view the problem.  Under Reagan, wages were disconnected from productivity for the first time and wealth rose to the top.  Also, labor was legislatively decimated and the federal government punished the poor and rewarded the rich through tax policy. Globalization moved what remained of good paying jobs out of the U.S. with the average job paying ten thousand dollars less.  It is these policies that rendered homeowners unable to pay their mortgages.  These things are not the fault of homeowners but economic policy.  Homeowners were made to fail.

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By elementaryfinance, January 27, 2009 at 11:48 pm Link to this comment
(Unregistered commenter)

As much as I hate to turn my back on people in need, we don’t have the resources to bail out everybody who needs it.  There just aren’t enough resources.

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By Nozferatu, January 27, 2009 at 11:29 pm Link to this comment

I say let the foreclosures happen.  Most people knew what they were doing and what they were getting themselves into.  The corruption and rot is on all levels…all the way down to the home owner. 

I’m sorry…but tough sh^t if someone paid too much for their home and can’t afford it now.  Personal responsibly should have trumped greed.

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By Shift, January 27, 2009 at 6:33 pm Link to this comment

It is an act of class treason for the wealthy to assist the middle class and poor.  The ghost of Christmas future must be knocking on Ben’s door.  True desperation is evident in his actions.

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