"How much longer do the people losing their homes have to wait."

Neal, wait for what? For someone else to jump in and solve their problems? Folks need to be proactive and start looking for theor own solutions. If they can't afford their house then maybe they need to accept that reality and move on. A foreclosure is NOT the end of the world.

I'm sure between now and election day we will be seeing all kind of "solutions" being thrown out there. It should be interesting.

BB,

I just do not think this type of proposal is going to help. And most consumers will say they are waiting to see if they will be helped before foreclosure. How can going foreclosure be a positive thing? If it isn't such a bad thing then why even negotiate a short sale. Foreclosure has to be one of the worse things to happen. I do agree about folks needing to be proactive...how much control do they have? They are at the mercy of their bank. I also beleive that many consumers were either not educated enough or just were hoping to take what they could get and hope to survive.

I loved this part of your description of the proposal "determine if borrowers can really afford a mortgage before making the loan".  Isn't that what they were supposed to be doing all along...it's call loan approval right? 

Diane,

Maybe I didn't say it right but yes...isn't that what they should have been doing all along?

God forbid folks practice Common Sense.  Then again, Greed tends to Blind....on all sides.  Affordability is a no-brainer.  I may be back.

Jason,

Like I said it is everyones fault here. I just wonder if the FED is just grasping onto proposals that make no sense. Are they telling u something they should have done the right way before. Are we that stupid? Now they say they want to make sure people are qualified? How did they do this before?

Oh I read that too today, what a mess... more gov't solutions. Yuk. Problem is this should have been done all along and most of the time is was, but not from the slimmy lenders.

Missy,

It's not just the lenders fault it is every agent and title company that allowed these deals to go through the way they did. Common sense wise is if you can't afford to pay the small bills in our lives then how in the world would a banks want to take a chance lending a lot more money?

I must live in a different galaxy.  My buyers could actually afford the loans on the homes I sold them. 

I did have some buyers who were Fanne Mae DT approved with 50-60 front ratios who purchased but that is when one spouse's income couldn't be counted. 

Some VA and FHA loans were in the 45-50% area, but only with very low front ratios. 

We also had some buyers come to us with high interest, high fee loans, but once they were educated, they moved the loans. 

Neal...  lol  I am not laughing at you. Just laughing at the government. As Bryant said, we will be seeing more solutions from now until election. Smoke screens is what I call them... lol  Propaganda...  making the public feel at ease and to ease fear in the market.

As several others have mentioned, isn't that our job, to make sure the consumer can qualify, make the payment.  This is a joke.....  what do you possibly do more in regards to making sure people can afford it?  Get rid of those companies that abused the system.

I agree with you... it needs to start with property taxes. I knew of one client whose property taxes went up a whole $300 more a quarter.  I had to refinance her mostly because of this.... and I lowered her rate a little.  

Overall, I hate to say this, but FHA is one way to go. We blame so much of the subprime market. But what about those conventional deals that were approved with 65% back end ratios.... ????  YIKES>..   it was because of the automated system. How about tweaking that system. How can one survive with 65% of their income going out to debt that is on the credit report. What about utilities, gas, and food.???   We need to start there also.

Lastly.... this part cracked me up. This is from the article... " The steps also include prohibiting advertisements for mortgages from loosely using terms like 'fixed-rate' loan."

My question to this,.... isn't the state and other entities suppose to watch for this?  Fine people that mislead? How sad....   the state banking commissions haven't been doing their jobs then. That's what it comes down to it. I have been seeing false and misleading advertising since 1992....  rates that did exist with misleading APR's....  how about starting there?   Boy, you have me all worked up on some stuff that has been happening for decades.

Neal:

I agree.  Time to stop pointing fingers and blaming.  Lets work to find a solution and fix the problem. 

Lip service.  Smoke and mirrors.  Window dressing.  And talking just to sound good on the news wont help. 

Lenn,

I was on the listing side of a few VA loans but since they require a % of sellers closing costs and or prepaids ...you would expect that type of loan to have fully qualified the person...but I do not know enough about the stuffing..i can only assume from the outside looking in. Again common sense was if you make a certain amount of income is there a golden rule of 2-3 times what you earn as how much you can really afford of the purchase price?

Jeff,

I don't think you were laughing at me...I agree that the article itself is just another smoke screen as when they say they will lower rates by a half a point. Did it even effect anyone positively..Where are all the success stories from that I wonder? I didn't even bring up the part about the advertisements because i realize you have certain standards of what you can and can't say. My question is if it is a fixed rate then how are they misleading people? By saying they are fixed but they really are not? Isn't in plain English either yes or no? or are we missing something. The article is exactly what you say a smoke screen. As you can see I didn't single out one entity....if there are agents out there that saw the buyers confidential information on their finances then wouldn't they figure something was wrong and say something or just let it go though. I personally have never had access to that information other than seeing a credit report or too voluntarily and my own personal info...I never ask for it and I'm sure lenders won't show us unless it is authorized by the buyer.

I agree with BB's assumption that foreclosure isn't the end of the world but what I don't agree is it is really close to one of the worse things to have happen to you besides your health.

I'm also glad to hear an opinion from your end on this.

Neal, Foreclosure is certainly not a positive thing but it may be a viable solution for some folks. I just spoke with a lady today who owns 2 houses in Poinciana that she is upside down on because they have pulled all of the equity out and spent it. The properties are vacant and she is considering refinancing her primary resident to be able to make mortgage payments on these properties. I told her the truth and said she was being foolish to even consider that. Why throw good money after bad? She made bad investments. Now she can:

 1. Do a deed in lieu of foreclosure.

 2. Try to get a short sale(which she won't get)

 3. Or let the properties be foreclosed on and get on with her life.

If it were me I'd take the 3rd option and be done with it. She made risky investments and lost. And the lender made a bad investment and lost. No one's fault. Just reality. She needs to deal with it and move forward. While it is not a positive experience it is certainly not the end of the world. People lose money everyday. 

I lost 2 properties to foreclosure and had a bankruptcy back in the 80s. While it sucked I didn't lose any sleep over it. I tried everything I could to avoid it. I failed. I accepted the results of my foolishness and I moved forward. I lived by "cash only" for the next 10 years. It taught me responsibilty. While foreclosure is a negative the lessons learned from it can be very beneficial.

Neal... it says from loosely using the term fixed rates...  example :  The pay option arm was advertised a lot as a fixed rate. This is what they are talking about, yet, I saw this advertisement often. You can't tell me someone in the gov't didn't see this. Or better yet, that the banking commission for the state didn't see this. Funny, if the banking commission went out and shut down have of these companies, the state would lose a lot of money. Remember... and we will use the state of NJ as an example. Each company has to pay a licensing fee per year and each loan officer has to pay for a solicitor's license every two years. This is a lot of revenue that would be lost then. This last part is just my .02...but I saw it often. And yes, I agree with BB's comment also.

Jessica,

I just feel they are trying to re-fabricate the same stories. Either they have a better plan or maybe they should really think about it before releasing it. The media can really be powerful.

BB,

I'm sorry to hear that happend to you and I'm sure it wasn't the best position to be in ....but when you had said it wasn't the end of the world I agree.... but it is the end of having a chance to recover quicker. Obviously if it is your last resort then I guess there is no other option. In a short sale if it is even possible to do...its better to be a few payments late then to just give up. Maybe your situation was different...I don't know..I have never been there but a few clients have been so it. Deed in lies only are an option if the banks are willing and actually a few months ago I wouldn't even think of one but now that brought it up I wonder if they can't do the short would they now accept more of them...humm. As far as the rest goes....I just think the way they are using these so called proposals is by just recycling old stories and by saying they are now going to make sure they determine that the borrowers can get the loan? Are they serious? My question is what were the steps then?

As far as the part about the brokers compensation ....that is not for me to say. I know my compensation is disclosed right on the HUD and in my listing agreements.

Jeff,

I was just looking to see if missed anything in that article. I wonder if they charged 15% if someone calculated... would they show that they would never pay off the loan.. or maybe only a of the interest.

Neal - This is a solution?

Sandra,

What do you think?:)

Neal, another program that promises a lot of sizzle and no beef.

You stated above that they are calling for the "U.S. lenders would determine if borrowers can really afford a mortgage before making the loan".  What do they think that the legitamate Lenders have been doing all along? And how would this stop the crooks?  I will say it again, a lot of sizzle and no beef.

George,

That is the question I keep asking...do they think this is something new?

Seems to me it is more politically motivated than a real solution, Neal.

Jeff

Neal, How Much Longer People need to wait? I also believe many people need to own up as well. I just received a phone the other day from someone saying they need a loan (Cash Out) and that they would use the money on the cash out to pay the mortgage until the house sells.  I asked the person what they have planned when the cash runs out? Silence....people need to be responsible for themselves.

Matt,

That might be true...but what does that have to do with the proposal they put out? Do you think it is just a way to keep the public occupied?

Jeff,

That is what it seems to be about.

Neal - What do I think? I think it's nuts and a waste of time and money. Good lenders do this already.

Sandra,

Exactly!