A new study shows that despite the best efforts of lawmakers and mortgage-service companies, little is actually being done to help homeowners facing foreclosure, says the Wall Street Journal.
The study, compiled by the State Foreclosure Prevention Working Group, made up of banking regulators and attorneys general in 11 states, found that seven out of 10 borrowers who are seriously delinquent on their mortgages aren’t on track to receive any kind of help with their payment problems.
The number of delinquent borrowers working with their lenders has increased, the report found, but overall increases in the number of delinquent loans have outstripped those gains. The proportion of borrowers who weren’t engaged in any sort of loan workout was unchanged from the group’s previous report in February.
“While there’s been a lot of effort put in by mortgage servicers and government officials, there has been little change in outcomes for homeowners,” said Mark Pearce, deputy banking commissioner for North Carolina. “We’re still treading water.”
Some AG’s, such as Iowa’s Tom Miller, are not ruling out litigation if mortgage companies don’t do more for troubled homeowners.
“If loan mitigation and modification don’t produce fruitful results for homeowners, I, for one, would be inclined to look at litigation possibilities to secure help for homeowners,” he said.
States Fault Effort to Stanch Foreclosures [Wall Street Journal]
(Photo:gruntzooki)
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Why do we need to help these people? “Gee, I made a bad decision so now someone else is responsible for my mess?” If you want to live in a communist or socialist society move to Europe.
Almost too many villains here to finger any one group…
A bailout of homeowners is no different than giving a drunk another drink.Few are going to become more sophisticated in their financial lives because their loan gets tampered with. Ironically , this will almost certainly exacerbate the situation by artificially propping up the values of these homes. Many of these loans will fail anyway when reality sets in that they are permanently underwater.This means that the pain will drag out for years.
Lenders are not stupid.
Did you know that Citicorp got bailed out in 1991 ?
That Continental Illinois in 1986 ?
Long Term capital Management in 1998 ?
The entire savings and loan industry in 1990 ?
What do you think would happen if these things were allowed to go down the drain and no bailout was forthcoming ?
We are in a permanent cycle of these rescues because of the “too big to fail” policy of the Federal Reserve.Tis gives these swindlers a license to play casino games with our money. then if they hit the jackpot,it’s their to keep. Crap out, and we get the bill.
Congress. Lobbyists are strong and politicians are weak. Our government is for sale 24/7 and we seemingly are powerless to stop it.Wait ’til next year. There won’t be an election then. Incumbents won’t be sweating the details with this fall safely behind them.If they survive the first Tuesday this November,it’s gonna be fine because they are more likely to die in office than get voted out.
Yep, too many villans…
there’s someone who said “why do we 30 percenters get the rug thrown out below us?”
Good question. The financial industry was thinking along the same lines. 30 percenters weren’t giving them marginal profits and a limited amount of people to give “legitimate” loans to.
So for a decade they hammered the government for looser guidelines on lending, and finally got it. This is the result.
@MyCokesBiggerThanYours: as opposed to hear in the good old u.s. of a. where “Gee, I made a bad decision so now someone else is responsible for my mess?” only works for corporate executives & politicians.
@Snarkysnake:
possibly. but it’s also possible that creating a logical solution would solve the problems on main street & wall street at the same time.
if we look at the loans made, there’s obviously a correlation between the reset dates & foreclosure dates. many of these homeowners are not a day delinquent until they hit the reset. & b/c lending requirements are much more strict today than they were 18 months ago, they can’t refi out of their loan.
we also have to assume that investors are looking at this information as well [www.bubbleinfo.com] , which is affecting their willingness to invest in MBS until well into 2012. that means a continuance of the current liquidity crisis for another 4 years as well as ballooning commodity costs ($4 gas? pshaw! hello $5 gas!) as investors seek to make money elsewhere in a shaky market.
why can’t we just fastrack on-time borrowers (in owner-occupied residences) into a program that freezes their current rate? simple paper addendum to the loan. as long as they keep making on-time payments, they can forgo foreclosure. hell, even tie in a recourse clause on the back interest if it makes you happy.
that should keep a large portion of homeowners affected by this in their homes, lure some speculators back into the credit markets (maybe provide some relief elsewhere in the economy) & get the wheels churning again.
hear = here
@mac-phisto:
“lure some speculators back into the credit markets (maybe provide some relief elsewhere in the economy) & get the wheels churning again.”
The wheels churning is what got us here.Speculation (and speculators) drove the price of these places up beyond what a reasonable person would pay.We don’t need the wheels churning again,we need the market to find its natural equilibrium so that both buyer and lender are not sitting on a time bomb.Any kind of a workout that rewards speculation just means that the next round will be bigger and harder to clean up.
Now. neighborhoods will have boarded up houses. Some people will see their houses worth less (including me), but the fact is that people signed mortgages that they didn’t understand. Investors and speculators bought mortgages based on those loans that they didn’t fully understand. The only party making out here will be the swindlers that packaged this stuff.Do we want to reward them ? Do we want to give them the financial equivalent of a Get Out Of Jail Free card ?
Sadly,all the blogging in the world won’t stop the big swinging dicks on Wall Street from giving a dump truck full of money to their agents in Washington. All in the name of “good government”,of course.Then,we’ll see this coming bailout packaged as a measure to “save families from foreclosure”.BOHICA.
I will stand against anyone who says ‘fcuk em’ to folks in foreclosure.
Because not everyone in forclosure borrowed too much. Or bought too much. When my Dad inherited two properties from my late grandmother and rented them, he didn’t go out and buy a Lexus. And when we couldn’t find tenants ,the bank foreclosed on not one , but two homes.
Not only could we not refinance, but because of the credit score damage, that means no loans, no apartment, no nothing. And all because my dad committed the crime of renting his inheritance .And the bank’s response to our tenant situation ? ‘Tough Sh!t’.
And the unfortunate reality is that unless a ‘bailout’ happens, all of us, rich, poor, responsible and irresponsible, will eventually be standing together in the bread lines.
It gets harder and harder to feel good about the US of A. Despite what anyone says, the culture is a ‘top down’ thing. The government sets the tone for the people. And, unfortunately, we are discovering that this government is rotten to the core. And, yes, it is leaking down into the people. But not all of them, of course. It is just very hard to fight the oppressor when world banking and mega-corporations are pulling all the strings. As George Carlin said, “They don’t care about us. We don’t matter.” And … most of us are in their way which is a little something they are going to take care of any way they can.
Yes, indeed, good folks turn to God and faith.
@elanne: Post of the day–boy am I cynical.
@Silversmok3: I sympathize with anybody who has had to experience foreclosure. And I’m a bit curious–did your father inherit 2 properties that had mortgages? If they didn’t have mortgages when he got them, did he take out mortgages, and why?
And even though I don’t know the circumstances of the fact that your dad was unable to rent out two houses, I am very curious why.
I am soooo torn.
Okay, I’m responsible, always have been, have always qualified for best rate and always went safe route of fixed mortgage. I invest wisely and I work hard and take great pride in all I have been able to provide for my family.
My husband’s ex and her husband are planning on abandoning their $129,000 house (yes, that is what they built it for 6 years ago, and it was a great deal as it is very undervalued for neighborhood they are in even in today’s real estate market.)
Now, I am a realist, she has never worked, never will. He is a retired career military man with a good pension and does work occassionally to help make the bills (nothing steady). He sold other real estate worth more to build and furnish this home but because they are not even close to be responsible, they only qualified for (matter of public record, they just refuse to pay bills) they only qualified for an ARM that has balooneed and of course they have have not investments or savings. (Quite frankly, I was stunned to hear they qualified for mortgage in first place.) I also know, our monthly child support (which is not my gripe, so do not get defensive), paid their mortgage payment 3-fold each month before their baloon. What has me the most concerned is that they think in abandoning this home in foreclosure (and yes, they waited till the very last possible minute), they will turn right around and get a mortgage.
You know, I could say..you reap what you sow, but my stepchildren are in the middle of this and what gets me is they actually think their mom is good with money.
The truth of the matter, we are all going to pay for their home now, one way or the other. This instability my kids now have to face is an example of the blight the mortgage industry brought upon us all. These weren’t people wanting a chance and willing to work for it, they were just given a chance to take. It makes me think, “what a fool I was” that I did the right thing. Now we are thinking we just might become landlords for people with a public record of not paying rent so my children can be where they feel secure. It is worth it but boy does it rub me raw!
here’s what i can’t figure out. some dude got a dumb mortgage and now he owes $500,000 on a house that is worth $400,000. but because he can’t pay the $500,000 mortage the bank forecloses on him even though there is no way the bank could sell the house for anywhere close to $500,000. yet they won’t renegotiate with the dude that could perhaps pony up for a $375-$400 K mortgage. So the bank forecloses, the house sits empty, and the homeowner is gone. i can’t figure out who wins in this situation.
Fcuk them. Your dad too. Just sell the stupid houses if you can’t find a tenant. What kind of stinkholes are those houses anyway.
@stanfrombrooklyn: A winner? There doesn’t necessarily need to be a winner. When a stock plummets and a company fails there is no winner- is there? Sure there are guys there to pick up the pieces but the bank needs to hold people accountable for what they signed up for. Do you know how many times you need to sign pieces of paper to buy a home? It isn’t like buying a Slurpee.
The winner in this situation are future real estate owners. (That includes people that currently own now). People that get foreclosed can rent anyway, so I don’t see what the problem is. We all make mistakes.
This is one of the most depressing bunch of posts I’ve ever read. I’m embarrassed to be called an American, if this is how “we” act. We’re at war, in a recession and some people who are in need, need help. And what are our answers? “fcuk them”? How very patriotic and “christian” of you a-holes. I’d much rather my taxes (I paid 6 f*-figures in taxes this year) went to fellow americans who need help, than some BS Bureaucratic laden program, or grant to see which came first the chicken or the egg. You make me sick.
@side: How much sympathy should I have for people who bought WAY beyond their means and now can’t afford their wildly inflated lifestyle?
Now, an “f them” response may be a bit strong, but you know what? There were a ton of people in desperate need before this crisis too, and how much help or sympathy did they get from us? Not a heck of a lot.
Why should homeowners be so different?
@side:
“This is one of the most depressing bunch of posts I’ve ever read. I’m embarrassed to be called an American, if this is how “we” act.”
I speak for myself and no one else. And you’re entitled to your opinion, but so is everyone else here. Clearly, that’s upsetting to you.
“We’re at war, in a recession and some people who are in need, need help. And what are our answers? “fcuk them”?
1) So if we weren’t at war, you’d be okay with the ‘f-em’ attitude? Is that what you’re saying?
2) As I’m sure a wealthy person such as yourself recognizes, the current desperation in the credit markets is *rooted* in excessive investments in subprime mortgages. One might make a cogent case that subprime mortgages may have been the tipping point that *put* us into a recession.
3) I’m sorry if you don’t like my opinion, or anyone else’s, but things are what they are.
“How very patriotic and “christian” of you a-holes.”
I’m a disabled vet (DD214, VA rating letter and everything). And I’m not a christian. So what now, pal?
“I’d much rather my taxes (I paid 6 f*-figures in taxes this year) went to fellow americans who need help, than some BS Bureaucratic laden program, or grant to see which came first the chicken or the egg.”
Then perhaps you should make some tax-deductible donations to charities that deal with that sort of thing, Mr. Millionaire. With your massive wealth, I’m sure you have enough financial resources to help quite a few people out. But not all of us are in your fortunate position.
“You make me sick.”
Allow me to return the favor.
@BigElectricCat:
well said.
@BigElectricCat:
The problem it’s not because the majority of these people are down on their luck and need help.
A lof of these people fall into their categories (some one or more):
greedy – They probably knew zilch about the housing market but decided to jump on the bandwagon and buy a house assuming it’ll appreciate 10% a year forever. They can always sell it later for a nice profit. You won’t read too many profiles on these people in the NY Times because a sob story sells better.
stupid – People buy more house than they need. This wouldn’t be a problem if it was a house they could actually afford. There are literally tons of stories about people that fall into this category. Single guy making $70k/year. I guess I’ll impress everybody and get a huge house. The payments are only $3,000/month!
really stupid – Some people bought a house because they didn’t like renting. however they could only afford payments on a interest-only mortgage which means they’ll be paying that sucker forever! Way to make the bank your landlord!
I’m proud to be an American. We don’t need to bail out people who take outlandish risks or extremely stupid decisions.
We’re in a recession? The problem is most Americans can’t remember the last time we had a real recession instead of these mild economic slowdowns. When a real recession hits people will really be in for it.
my last post was meant to be @side.
@stanfrombrooklyn:
They auction off the properties. Not too many bargains around my area. I don’t live in the middle of nowhere where a housing “market” shouldn’t have formed in the first place.
@hejustlaughs:
Not a problem; thanks for the clarification.
Some of the pretentious comments here never cease to disgust me. Yes, many borrowers signed up for mortgages they shouldn’t have, but the lenders were equally responsible for loaning that money. Why? Because they resold those mortgages to others. However, unlike the borrower who will have his credit ruined, the lender has little of the same consequences.
So enough with how stupid people are and how much they deserve to be homeless. We’re here now, whats the point of letting all mortgages go into default when banks can save a large majority by offering better terms or reduced loans to those willing to work to pay it off?
It’s only a matter of time when the shoe is on the other foot, so get off your high horse and show some humanity.