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BofA halts foreclosures in 50 states

liblady said:
not really. sooner or later they will have to pay the piper....
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Well, no... most haven't paid the piper for months, and are going to sit payment-free until the piper kicks them out.

Ultimately it will be the taxpayers who pay the piper, via government guarantees.

See Mae, Fannie and Mac, Freddie.
liblady said:
in the meantime, having no vacant houses in your neighborhood keeps crime down, and keeps your property value from further declining.
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Again, short term concerns. The correction is coming, most of these houses will end up as foreclosures sooner or later. Better to get it done sooner rather than later so that we can get on with the recovery.
 
The_Patriot said:
When the banks sell the loan, it is treated like a regular deposit. They can take 90% of the deposit to create 10 times the amount in new cash to be lent out. The remaining 10% has to stay within the bank on the cash balance sheet as a reserve.
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you just said they could sell the loan twice. they can't. period. when it's sold, yes, it's cash. but they don't RETAIN the loan, nor do they just keep cash for cash's sake. the loans that banks are foreclosing on are portfolio loans, silly, not the loans they SOLD.


i don't think you have a clue how banks operate.
 
i guess not...but i'm glad you clarified.
 
liblady said:
you just said they could sell the loan twice. they can't. period. when it's sold, yes, it's cash. but they don't RETAIN the loan, nor do they just keep cash for cash's sake. the loans that banks are foreclosing on are portfolio loans, silly, not the loans they SOLD.


i don't think you have a clue how banks operate.
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No, I said that they sold the loan as an investment once. They take the money from the sale and put it down as a deposit. From that deposit, the regular fractional reserve banking rules take effect. 90% of the deposit is multiplied by 10 to generate ten times the amount of money that the bank can use to lend out. The remaining 10% is held as a reserve for the savings and checking accounts inside of the bank. For example, BofA sells a 500K home loan as an investment for say 500k at 5% APR. Out of that 500k, the bank has to put on the reserve/cash balance sheet 50k. The remaining 450k is multiplied by 10 to get 4.5 million in new money to be lent out as new loans. On top of the ability to create new money, they are going to be making 5% APR on the investment of the original loan. Here's a handy link that explains how it really works.
 
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The_Patriot said:
No, I said that they sold the loan as an investment once. They take the money from the sale and put it down as a deposit. From that deposit, the regular fractional reserve banking rules take effect. 90% of the deposit is multiplied by 10 to generate ten times the amount of money that the bank can use to lend out. The remaining 10% is held as a reserve for the savings and checking accounts inside of the bank. For example, BofA sells a 500K home loan as an investment for say 500k at 5% APR. Out of that 500k, the bank has to put on the reserve/cash balance sheet 50k. The remaining 450k is multiplied by 10 to get 4.5 million in new money to be lent out as new loans. On top of the ability to create new money, they are going to be making 5% APR on the investment of the original loan.Here's a handy link that explains how it really works.
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and then you said that they sell the loan after foreclosure. your post, not mine.

and i'm sorry, but one bank doesn't reap the benefits of fractional reserve banking. perhaps you should read your own link a little more closely. and your assumption on what a bank makes is funny.
 
liblady said:
and then you said that they sell the loan after foreclosure. your post, not mine.

and i'm sorry, but one bank doesn't reap the benefits of fractional reserve banking. perhaps you should read your own link a little more closely. and your assumption on what a bank makes is funny.
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No, I said that they sell the home after foreclosure. I never mentioned the bank selling the same loan twice.

You're under the impression that every bank is independent of each other. They're not since they're all part of the Federal Reserve System. Under the Federal Reserve System, all banks are members to it and functions as a single entity using a monopoly on the money supply. This makes the Federal Reserve Bank System a single entity. I suggest you learn more about the type of banking system we have here before you comment on a link that shows how fractional reserve banking actually works. Also, you're confusing the money created out of nothing as pure profit when it's not. The profit comes in from the interest rates paid on the loan. I stated that creating money from the 90% of a deposit is used as a new loan.
 
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The_Patriot said:
No, I said that they sell the home after foreclosure. I never mentioned the bank selling the same loan twice.

You're under the impression that every bank is independent of each other. They're not since they're all part of the Federal Reserve System. Under the Federal Reserve System, all banks are members to it and functions as a single entity using a monopoly on the money supply. This makes the Federal Reserve Bank System a single entity. I suggest you learn more about the type of banking system we have here before you comment on a link that shows how fractional reserve banking actually works.
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Yes, I believe that the banks were looking to be predatory by not using sound judgment in giving out the loans to those that couldn't afford it. The banks pushed for relaxed lending regulations, which normally would have prevented the sub-prime mess to begin with, in order to make extra money. The banks have the homes on the books with the loans to begin with and the homes being foreclosed on just means that the banks can make more money from a second sale of it.
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what exactly does second sale mean, then? lol.
 
liblady said:
what exactly does second sale mean, then? lol.
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A second sale can be either where a person pays the price for the home without a loan in full or they secure a new loan to pay for the home. The new loan is a completely different loan from the original one used to buy the house the first time.
 
The_Patriot said:
A second sale can be either where a person pays the price for the home without a loan in full or they secure a new loan to pay for the home. The new loan is a completely different loan from the original one used to buy the house the first time.
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omg........does your head hurt when it spins around like that? you make absolutely no sense. btw.....banks have to have a BALANCED balance sheet. and they only have to reserve for DEMAND DEPOSITS that are their own liablilites, they don't have to reserve for their OWN freaking cash. they also do not have to reserve for interest bearing deposits. if they sell a piece of property, say a branch building, and deposit that cash.....they don't reserve for it. please, please get a clue.
 
liblady said:
omg........does your head hurt when it spins around like that? you make absolutely no sense. btw.....banks have to have a BALANCED balance sheet. and they only have to reserve for DEMAND DEPOSITS that are their own liablilites, they don't have to reserve for their OWN freaking cash. they also do not have to reserve for interest bearing deposits. if they sell a piece of property, say a branch building, and deposit that cash.....they don't reserve for it. please, please get a clue.
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It's actually quite simple to understand.

The first homeowner, we'll call him Bob, takes out a loan for a 500k house and puts down 10k for it. The bank can take 9k of the 10k to make 90k in money for new loans. The rest has to go into the reserve. He defaults on his loan and the bank forecloses on it. The bank takes the home from Bob and is now stuck with it. Joe sees the house for sale and goes to the bank to get a loan on it. The bank approves Joe's loan and he buys the house with a down payment of 25k. From that 25k, the bank puts back into reserve 2.5k and creates 10 times 22.5k for 225k to be used for new loans.

As you can see that Joe doesn't take over Bob's loan, but gets a loan of his own since Bob's loan has defaulted and is now closed.

I never mentioned anything about what you stated, so again you're strawmanning. I suggest you get a clue.
 
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Look for the Foreclosure Freeze Bailout Bill that the Dems will pass after the midterms.
 
liblady said:
it actually saves the bank a lot of money in the short term, and in the long term, they may be able to turn those mortgages around. but they aren't doing it out of the kindness in their hearts......
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Once a homeowner has been advised that their home is in foreclosure, they generally, not always, make no further efforts to pay their mortage and begin living rent free. In Illinois, foreclosure can take nine to twelve months. Being able to save $1,500 a month over ten months is tooooo seductive. Most homeowners resign themselves and pat themselves on the back about all the money they're saving.

These banks should be brought up on criminal charges. The position many foreclosure buyers may find themselves in is that their purchase may be rescinded. What a freakin' nightmare.

This is disasterous news for the real estate market.
 
apdst said:
Look for the Foreclosure Freeze Bailout Bill that the Dems will pass after the midterms.
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I'd soooo much rather we looked for The Bank Official Mass Indictment Bill, but I'm afraid you may be right.
 
I'm not sure people really understand what was happening here. The banks were told to freeze foreclosures and fix things up because they weren't doing a good job of reviewing the case before foreclosing. There were people foreclosed on who weren't even in default.
 
yes, it's called strategic default and it's going on all over

Strategic default - Wikipedia, the free encyclopedia

these are your neighbors living in bigger, nicer and newer homes than yours that you (more accurately, your grandkids) are paying for

i do not mean to villify these people, as a public school teacher in the sf bay area i know several and i sympathize

there's a couple million of em, i'd be surprised if you don't know a few folks in such a fix

Strategic Default: Walking Away from Mortgages - 60 Minutes - CBS News

but obama's hamp, home affordable mortgage plan, is a consensus disaster

it's all in the bloomberg link above which some of you folks who talk so much are too lazy to read (again, fine by me)

which is why you appear unaware of strategic default

yes, hamp has hampered for a couple distinct reasons, the articles all say

(i could provide you with a dozen if i chose)

the paperwork was so complex, the requirements so byzantine, most who need help never even successfully apply

but mostly---half those hamped have ALREADY redefaulted

it is what it is

housing is what got us here, and there's no cellar in sight

4 million more foreclosures coming in the next wave

News Headlines

One in 10 mortgage holders faces foreclosure - Business - Real estate - msnbc.com

TARP watchdog slams Obama foreclosure program - Mar. 23, 2010

and, as always, obnoxious obama bails out the biggies:

Banks to benefit most from White House program to help fight foreclosures - The Hill's On The Money
 
Taylor said:
Not a big plus for those of us dutifully making our monthly payments on houses that continue to decline in value...

As we allow idiots who bought homes that they couldn’t afford live in them payment-free.

This is a short term solution with long term consequences.
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That is the rub. Payment free.

This means they have saved that money they would have been paying so they can go out and buy another house or rent another house.

These people won't be out n the street.

I think it would be better for the bank to take the homes that are upside down, sell them and take the loss, and the buyer can go get into a house he can afford.

I can tell you that when you have so much debt hanging over your head, it is hard to sleep and actually be a productive person.

It would be a relief to the buyer to get on with his life instead of waiting for the government to give him the deed to the house free of charge, which has happened in a few cases.
 
42 posts and 24 hours later and STILL no one has brought up the president's first significant VETO---announced thursday---of the FORECLOSURE bill passed thru pelosi's place by VOICE VOTE and thru obama's own senate UNANIMOUSLY

Barack Obama uses pocket veto - Carol E. Lee - POLITICO.com

the bill facilitated the enforcement of foreclosures across state lines

i'm so disappointed

so many of you really don't know what's going on

and yet---blah, blah, blah---barely partially informed

it's certainly your business, but you can't blame those of us who do our work from noticing

the banks blew it, they processed outta state paperwork without reading it, the president vetoed his own senate

good

but it appears he never thought of this, reported by wapo this am:

washingtonpost.com

the foreclosure freeze has put the skids to thousands of home BUYERS currently in escrow who've already put down payments and signed their contracts and now, suddenly, they're in limbo

the fella in potomac who put down 30,000 on a 470K fixer who just got an email from the lender---the sale has been frozen

he doesn't know exactly what to do, wait? walk away?

he says he won't be bidding on any more foreclosed upon properties

"caution," he says, is his byword

so many unintended consequences

are you sure this white house knows what it's doing?

are you fully aware of what's going on?
 
The Prof said:
42 posts and 24 hours later and STILL no one has brought up the president's first significant VETO---announced thursday---of the FORECLOSURE bill passed thru pelosi's place by VOICE VOTE and thru obama's own senate UNANIMOUSLY

Barack Obama uses pocket veto - Carol E. Lee - POLITICO.com

the bill facilitated the enforcement of foreclosures across state lines

i'm so disappointed

so many of you really don't know what's going on

and yet---blah, blah, blah---barely partially informed

it's certainly your business, but you can't blame those of us who do our work from noticing

the banks blew it, they processed outta state paperwork without reading it, the president vetoed his own senate

good

but it appears he never thought of this, reported by wapo this am:

washingtonpost.com

the foreclosure freeze has put the skids to thousands of home BUYERS currently in escrow who've already put down payments and signed their contracts and now, suddenly, they're in limbo

the fella in potomac who put down 30,000 on a 470K fixer who just got an email from the lender---the sale has been frozen

he doesn't know exactly what to do, wait? walk away?

he says he won't be bidding on any more foreclosed upon properties

"caution," he says, is his byword

so many unintended consequences

are you sure this white house knows what it's doing?

are you fully aware of what's going on?
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How come it took you so long to post it? Did I miss the test?
 
patience makes one more powerful
 
What a surprise. The banks have been cranking out foreclosures left and right. The fact is most of these people are serouisly delinquent, except in the few cases were there was just simply a mistake, which should hardley be surprising given the volume of foreclosures. This is just one more costly speedbump for the big banks.
 
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Deuce said:
I'm not sure people really understand what was happening here. The banks were told to freeze foreclosures and fix things up because they weren't doing a good job of reviewing the case before foreclosing. There were people foreclosed on who weren't even in default.
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That could be the case in a small, small, small minority of cases, but I think most of this is just because the bank failed to get a signature from a judge in one of the 23 states that requires such a thing before foreclosing. Kinda a pain in the butt if you ask me, when the understaffed banks are trying to rip morgage foreclosures. Isn't it great that we have 50 states with 50 different laws on the subject? I would propose a national standard for these laws enforced by the federal government, but then I would be called a big government liberal who wants to get in the industries way...
 
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The Prof said:
yes, it's called strategic default and it's going on all over
Strategic default - Wikipedia, the free encyclopedia
these are your neighbors living in bigger, nicer and newer homes than yours that you (more accurately, your grandkids) are paying for
i do not mean to villify these people, as a public school teacher in the sf bay area i know several and i sympathize
there's a couple million of em, i'd be surprised if you don't know a few folks in such a fix
Strategic Default: Walking Away from Mortgages - 60 Minutes - CBS News
but obama's hamp, home affordable mortgage plan, is a consensus disaster

it's all in the bloomberg link above which some of you folks who talk so much are too lazy to read (again, fine by me)
which is why you appear unaware of strategic default
yes, hamp has hampered for a couple distinct reasons, the articles all say
(i could provide you with a dozen if i chose)
the paperwork was so complex, the requirements so byzantine, most who need help never even successfully apply
but mostly---half those hamped have ALREADY redefaulted
it is what it is
housing is what got us here, and there's no cellar in sight
4 million more foreclosures coming in the next wave
News Headlines
One in 10 mortgage holders faces foreclosure - Business - Real estate - msnbc.com
TARP watchdog slams Obama foreclosure program - Mar. 23, 2010
and, as always, obnoxious obama bails out the biggies:
Banks to benefit most from White House program to help fight foreclosures - The Hill's On The Money
Click to expand...

So quick to blame the federal government while assuming that the world's largest banks and most educated people in the world were somehow duped by the federal government into causing the second largest financial meltdown in US history without thier knowing. It has nothing to do with the deregulated private sector doing whatever they could to make an extra buck.

It's Obama's fault!
 
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