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Thread: Freddie Mac. Betting against home owners.

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by 1Perry View Post
    No, in many cases they can't. Many of these loans originated without tried and true lending principles. If you can't verify your income Home Town Banker isn't going to refinance you. Also, if you owe $175,000 and your home is now valued at $120,000, Home Town banker isn't going to refinance you.

    This is truely picking the lesser of two evils. I say they should be FORCED to refinance these loans. I'm no fan of the entire situation but it's far, far, far better to keep these people in their homes than it is for Freddie to try and maintain their justification for huge bonuses.
    So then you are in favor of a massive homeowner bailout?
    The devil whispered in my ear, "You cannot withstand the storm." I whispered back, "I am ​the storm."

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    Re: Freddie Mac. Betting against home owners.

    You couple the current credit crunch with this new drive to get credit score on prepaid debit cards, and it spells out a desperate debt market SCRAMBLING to get their next crop of interest rates in before harvest time is over.
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by MaggieD View Post
    So then you are in favor of a massive homeowner bailout?
    Are home owners every bit as important to our economy as large businesses?
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by MaggieD View Post
    This article is incomplete, to say the least. At most, it's deliberately misleading. Read this:

    Freddie has underwriting guidelines. I think we all know what that means....minimum standards for when Freddie with accept a loan into its portfolio. Underwriting standards include things like debt ratio of the borrower, down payment requirements, minimum credit scores, et al. Makes sense, right? In fact, if they'd held to reasonable underwriting standards prior to the housing market collapse, it may not have even happened.

    Freddie making it harder to refinance makes absolutely perfect sense. Look at the example they give us: the Silversteins. Most short sales are the result of refinancing into a lower rate (usually) while, at the same time, pulling money out of the equity of one's home. Like using the equity to pay off credit cards, etc., etc. If it wasn't for that reason, which is a poor excuse, then it's because they decided to sell their home and let the bank take a loss on their mortgage. Not exactly the way to endear one's self to Freddie...who probably even took the loss.
    I'm not a banker or real estate expert but that isn't what my understanding of a short sale is. (the first example, not the second)

    So Freddie says, "If you've had a short sale in the last two (or is it four...not really clear in the article), we aren't going to lend you any money. And remember, that short sale trashed their credit because it left their lender holding the bag.
    In a short sale you sell your house. (for a loss). You no longer have a reason to refinance.

    This article, as I've laid this out here, in my opinion is deliberately misleading...or else written by someone who doesn't understand underwriting. Freddie is in the business of guaranteeing loans. It's their mission. They want to do that. But, hopefully, they've learned a valuable lesson: Don't lend money to people who can't buy lunch.

    And, as for the Silversteins whining, look at it this way: Somebody buys a car through the finance company. After six months, they "turn the car in to the finance company" because they can't afford to pay for it anymore. Then they whine because they can't get another car loan.
    The article is about refinancing, not getting another loan on another house.

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by 1Perry View Post

    This is truely picking the lesser of two evils. I say they should be FORCED to refinance these loans. I'm no fan of the entire situation but it's far, far, far better to keep these people in their homes than it is for Freddie to try and maintain their justification for huge bonuses.
    No, not at all. It's not a good idea to let people keep homes that they cannot afford. That is a huge part of what got us into this mess in the first place.
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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by KevinKohler View Post
    Are home owners every bit as important to our economy as large businesses?
    Don't misunderstand. I'm in favor of the upside-down homeowner catching a break. It should have been done immediately. Right now, the housing market is suffering the Chinese water torture of all these short sales and foreclosures trickling steadily into the marketplace holding down housing values. In many areas of the country, rather than stabilizing, housing prices are still in a slide.

    I actually agree with Perry. And the fact is, it wouldn't cost the banks even half as much as it's costing them now.

    But, make no mistake, if banks actually did begin forgiving principle enmasse, the public would be outraged.
    The devil whispered in my ear, "You cannot withstand the storm." I whispered back, "I am ​the storm."

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by MaggieD View Post
    So then you are in favor of a massive homeowner bailout?
    First you will have to explain how this is bailing anyone out. The current 30 year rate is say around 4%. Homeowner A bought at 8%. They now, to stay in their home want to refinance at 4%, the going rate.

    I understand that many would not qualify today, but it doesn't cost the taxpayer here. It will when they can not refinance and have to walk away.

    So, as I see it, we are not bailing out a homeowner but refusing to allow them to refinance at current rates, we are bailing out Freddie by allowing them to say no.

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by lizzie View Post
    No, not at all. It's not a good idea to let people keep homes that they cannot afford. That is a huge part of what got us into this mess in the first place.
    If they could not afford them at all, they would have already walked away. They are having trouble affording them. They simply want to refinance at the current rate to stay in their house.

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by 1Perry View Post
    If they could not afford them at all, they would have already walked away. They are having trouble affording them. They simply want to refinance at the current rate to stay in their house.

    They shouldn't have financed in the first place if they couldn't afford to buy a house. If you can't afford the terms of a contract, never sign it.
    "God is the name by which I designate all things which cross my path violently and recklessly, all things which alter my plans and intentions, and change the course of my life, for better or for worse."
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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by MaggieD View Post
    Don't misunderstand. I'm in favor of the upside-down homeowner catching a break. It should have been done immediately. Right now, the housing market is suffering the Chinese water torture of all these short sales and foreclosures trickling steadily into the marketplace holding down housing values. In many areas of the country, rather than stabilizing, housing prices are still in a slide.

    I actually agree with Perry. And the fact is, it wouldn't cost the banks even half as much as it's costing them now.

    But, make no mistake, if banks actually did begin forgiving principle enmasse, the public would be outraged.
    Perhaps we crossed lines somewhere. I'm not advocating forgiving principle either. There are cases where short sales go through but that is another topic IMO.

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