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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 lizzie View Post
    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.
    That bridge done burn't down.

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by 1Perry View Post
    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)In a short sale you sell your house. (for a loss). You no longer have a reason to refinance.
    In the eyes of the lender, a refinance is no different than a new purchase. A short sale requires the cooperation of the bank wherein they realize they're not going to get all the money you owe, but they figure it's better to negotiate a loss than take it in foreclosure. The Silversteins were probably only able to buy another home because they were able to pay a really high interest rate. They surely wouldn't have qualified for standard rates...and should be delighted to have even gotten a mortgage. More than likely, that high interest rate loan was through a mortgage broker who had an investor who was willing to take the risk. Standard mortgage with lower rates? No surprise they can't get one.
    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 1Perry View Post
    That bridge done burn't down.
    Doesn't matter. I'm not willing to try and build it again. If people signed contracts to buy homes, then couldn't afford the terms, it was their shortsightedness that caused the problem. Now that they've screwed up their credit even more, there is absolutely no incentive for lenders to refinance, nor should they be forced into doing so. THe American taxpayer is already on the hook for far too much money in the way of bailouts.
    "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."
    -C G Jung

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by 1Perry View Post
    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.
    So you want Freddie to relax its underwriting standards back to the ridiculously low standards that got us into this mess to begin with? You know that sound of flushing you hear? That's taxpayer money going down the drain when mortgagees default. P.S. When we bail out Freddie, we're bailing out taxpayers.
    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 lizzie View Post
    Doesn't matter. I'm not willing to try and build it again. If people signed contracts to buy homes, then couldn't afford the terms, it was their shortsightedness that caused the problem. Now that they've screwed up their credit even more, there is absolutely no incentive for lenders to refinance, nor should they be forced into doing so. THe American taxpayer is already on the hook for far too much money in the way of bailouts.
    Nothing in the article notes that their credit is any different than the day they bough their house. I could have a credit score of 810 and I owe $180,000 on a house that is now worth $120,000 because of the current market, I can't get a loan on it.

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by MaggieD View Post
    So you want Freddie to relax its underwriting standards back to the ridiculously low standards that got us into this mess to begin with? You know that sound of flushing you hear? That's taxpayer money going down the drain when mortgagees default. P.S. When we bail out Freddie, we're bailing out taxpayers.
    With the alternative being what? Having the homeowner walk away? How is that better? I noted it's a choice of picking between two evils.

    We are NOT talking about giving people completely new loans at with unjustifiable lending practices. This is about refinancing.

    So, IYO which is better. Refinance at the current market rate or walk away?

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by 1Perry View Post
    With the alternative being what? Having the homeowner walk away? How is that better? I noted it's a choice of picking between two evils.

    We are NOT talking about giving people completely new loans at with unjustifiable lending practices. This is about refinancing.

    So, IYO which is better. Refinance at the current market rate or walk away?
    As I said, to Freddie, a refinance is no different than buying a new home. It's a completely new loan. For someone who has already walked away, I would not favor cutting them any slack at all. And that was the case with the Silversteins.

    Quote Originally Posted by 1Perry View Post
    Nothing in the article notes that their credit is any different than the day they bough their house. I could have a credit score of 810 and I owe $180,000 on a house that is now worth $120,000 because of the current market, I can't get a loan on it.
    Yes, their credit scores were in the toilet because of the short sale -- and that's exactly why they were given a high interest rate loan.
    Last edited by MaggieD; 01-30-12 at 11:59 PM.
    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
    As I said, to Freddie, a refinance is no different than buying a new home. It's a completely new loan. For someone who has already walked away, I would not favor cutting them any slack at all. And that was the case with the Silversteins.
    I care less about cutting anyone a favor when they walk away. I'm not discussing that.

    Yes, their credit scores were in the toilet because of the short sale -- and that's exactly why they were given a high interest rate loan.
    Again, I care less. I am not discussing people wanting to buy another house after walking away from one.

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by 1Perry View Post
    I care less about cutting anyone a favor when they walk away. I'm not discussing that.



    Again, I care less. I am not discussing people wanting to buy another house after walking away from one.
    If they are still in the house, and they've screwed their credit, it's still the same thing we're talking about. Default isn't necessary to screw up your credit rating.
    "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."
    -C G Jung

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    Re: Freddie Mac. Betting against home owners.

    Quote Originally Posted by lizzie View Post
    If they are still in the house, and they've screwed their credit, it's still the same thing we're talking about. Default isn't necessary to screw up your credit rating.
    It's pretty much a waste of time to discuss things when one side doesn't address all points.....I'll try once more though.

    The options are this:

    They get a refinance and stay in the house.

    They don't and walk away.

    Which is better?

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