“It is useless to attempt to reason a man out of a thing he was never reasoned into”

Jonathan Swift
"The Democrats have moved to the right, and the right has moved into a mental hospital." - Bill Maher
"The city is crowded my friends are away and I'm on my own
It's too hot to handle so I gotta get up and go

It's a cruel ... cruel summer"

Friday, August 21, 2009

Depression Continued

This morning, I wanted to go into some more detail about what is happening now, and what to expect in this economy. Stuff that must be fixed before any real recovery can happen.

BTW . . . you won't see this reported on the Jon and Kate networks. LOOK OVER THERE! Sarah Palin also said something crazy again!!!

Real Estate: sobering numbers to consider here;
13% of homeowners are behind or in default, and notice from the chart that over half are fixed prime rate loans. People who used to have middle class jobs, and good credit. This is now a Prime foreclosure crises.

Mortgage modification has failed. There I said it. Chase has my mortgage, and when I applied for the Presidents "Home Afforable Modification Program", Chase lost my paperwork 3X, and then tried to stick me in a lower interest rate ARM . . . with them collecting a massive fee. I told them to go to hell. Peter Goodman had a great article about this in the Financial Times

"But for the loans in question, servicing fees range as high as 2%-3%. In some cases, Chase, or Washington Mutual previously, modified interest rates on the loans down to 3%, while keeping the servicing fee flat. This essentially strips cash flow from the mortgage note holders and diverts it to the servicer, a tactic that doesn’t sit well with owners of the impacted bonds."

Get it? You get your mortgage rate lowered to 3%, but it's an ARM, and the bank takes 2-3% in fees. IOW, you are not paying down your mortgage that much.

SOLUTION 1: Without giving judges in bankruptcy court the option to reduce payments for a period, we will still be in free fall.

SOLUTION 2: Have the government use FNMA to refi anyone who is 1 month delinquent, in foreclosure, or unemployed. You get a 40 year fixed at 3%, no points. When things improve, the gov can sell these mortgages to the banks, or keep it.

Tomorrow I want to discuss unemployment.

In the meantime . . . has anyone else experienced boolsheeet with their bank regarding their mortgage or modification?

-Prodigal Son