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Let’s Get Real Mortgage Reform!

The federal government should act more directly to keep people in their houses.

Basically, the bubble burst and there was a lot of fallout of people losing their homes—some people even walked away. For the most part, I think people want to keep their homes, and will do anything not to quit.

The government should be doing more to help people keep their homes. If we had a rate adjustment across the board that was government backed so that people could qualify for a 3% loan, then owners could afford to keep their houses, instead of going through the expensive foreclosure process. The costs are too great—costs to the community, costs to the family—and hit both emotionally and financially.

I’ve been selling real estate for 22 years and this is the third big decline I’ve seen. It’s affected many more people than the other two, and shaken the foundation of home ownership. The government has the wrong idea for fixing the home mortgage business: it’s not by supporting the banks, it’s by supporting the people.

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Erik Hinshaw

October 2, 2010

I agree Jan something effective must be done. Im not sure interest rates are the problem. They are already ridiculously low yet most of us cant refinance because we are under water. At this point I think we need to adjust principle downward to a point that homeowners could refinance at the current rate. The banks would take a partial loss but certainly less than they would be hit with by a foreclosure. The homeowner would have a new loan at a great rate and would no longer be underwater. I know Id be a lot more motivated to pay my mortgage if it wasnt underwater. Prices would bottom at todays level and since inventory would dry up without the short sales and foreclosures prices might even rise a bit. With the news about Bank of America, Chase, and GMAC all freezing foreclosure activity we have a break to figure this out. Here’s hoping we do.

Erik Hinshaw

October 2, 2010

I agree Jan something effective must be done. Im not sure interest rates are the problem. They are already ridiculously low yet most of us cant refinance because we are under water. At this point I think we need to adjust principle downward to a point that homeowners could refinance at the current rate. The banks would take a partial loss but certainly less than they would be hit with by a foreclosure. The homeowner would have a new loan at a great rate and would no longer be underwater. I know Id be a lot more motivated to pay my mortgage if it wasnt underwater. Prices would bottom at todays level and since inventory would dry up without the short sales and foreclosures prices might even rise a bit. With the news about Bank of America, Chase, and GMAC all freezing foreclosure activity we have a break to figure this out. Here’s hoping we do.

jan nores

October 3, 2010

Eric,
I agree with you, there does need to be an adjustment in the mortgage balance for many people. If the banks looked at the actual value today and offered the present homeowners the first option at what price they will have to sell at as a short sale or REO, we would be stimulating the economy insted of bringing it down.
It’s the people that pay the taxes and they are the only ones really entitled to receive the Economic Relief, not the banks.
Thank you for your thoughtful comments.
Best,
Jan

jan nores

October 3, 2010

Eric,
I agree with you, there does need to be an adjustment in the mortgage balance for many people. If the banks looked at the actual value today and offered the present homeowners the first option at what price they will have to sell at as a short sale or REO, we would be stimulating the economy insted of bringing it down.
It’s the people that pay the taxes and they are the only ones really entitled to receive the Economic Relief, not the banks.
Thank you for your thoughtful comments.
Best,
Jan

Katie Minkus, R(B), Broker-in-Charge Big Island Sales

October 4, 2010

This is such an interesting conversation because I recall two years ago when the economy blew up, my instinctive reaction was, “just reset everyone’s mortgages to the lowest interest rates possible and don’t make anyone have to qualify for a new loan, just apply the interest rate reduction unilaterally.” Wish I would have yelled louder, we certainly wouldn’t be in this predicament today.

Foreclosures aside, the real “victims” in this whole thing have been those owners who had/have an adjustable rate mortgage but can’t refinance because they are either under water in property value, or they are small business owners (including all Realtors) and can’t qualify for a loan because they are not W2 income. So they are forced to sell their house in a short sale and ruin their credit because they don’t fit into the bank’s “perfect borrower box” and don’t have a few hundred thousand in cash to bring to the table.

Just wait – it’s going to get worse before it gets better… here come the “resets” on the commercial loans… Most people don’t know commercial loans aren’t 30-year, they are 5, 7 or 10 year loans max, and a bunch of them are about to come due. They will call performing loans and make them refinance for no good reason except that’s what the paperwork says to do. It will be a gigantic mess – with no Freddie and Fannie to bail anyone out.

“Too big to fail” – what a joke. No wonder there’s been a rush to local credit unions…

Katie Minkus, R(B), Broker-in-Charge Big Island Sales

October 4, 2010

This is such an interesting conversation because I recall two years ago when the economy blew up, my instinctive reaction was, “just reset everyone’s mortgages to the lowest interest rates possible and don’t make anyone have to qualify for a new loan, just apply the interest rate reduction unilaterally.” Wish I would have yelled louder, we certainly wouldn’t be in this predicament today.

Foreclosures aside, the real “victims” in this whole thing have been those owners who had/have an adjustable rate mortgage but can’t refinance because they are either under water in property value, or they are small business owners (including all Realtors) and can’t qualify for a loan because they are not W2 income. So they are forced to sell their house in a short sale and ruin their credit because they don’t fit into the bank’s “perfect borrower box” and don’t have a few hundred thousand in cash to bring to the table.

Just wait – it’s going to get worse before it gets better… here come the “resets” on the commercial loans… Most people don’t know commercial loans aren’t 30-year, they are 5, 7 or 10 year loans max, and a bunch of them are about to come due. They will call performing loans and make them refinance for no good reason except that’s what the paperwork says to do. It will be a gigantic mess – with no Freddie and Fannie to bail anyone out.

“Too big to fail” – what a joke. No wonder there’s been a rush to local credit unions…

Fred

October 19, 2010

Let’s see so your argument is that “government” should come rescue you because you planned poorly. You borrowed money, if you can not pay it back then you get forclosed on. What is really killing things is dragging this stuff out for years.

Forcing the banks to take a cut on the principle makes no sense. Of course that would cost them more than just forclosing on the bad loans. Or do you mean just those that have not been making payments get this treatment while those that planned and borrowed wisely get stuck were they are.

By the way anytime you suggest the government do something what you are really asking for is that the government come take funds out of my pocket and give them to you. To be honest I would prefer that you try and mug me in a dark ally, at least then I might have a chance.

Fred

October 19, 2010

Let’s see so your argument is that “government” should come rescue you because you planned poorly. You borrowed money, if you can not pay it back then you get forclosed on. What is really killing things is dragging this stuff out for years.

Forcing the banks to take a cut on the principle makes no sense. Of course that would cost them more than just forclosing on the bad loans. Or do you mean just those that have not been making payments get this treatment while those that planned and borrowed wisely get stuck were they are.

By the way anytime you suggest the government do something what you are really asking for is that the government come take funds out of my pocket and give them to you. To be honest I would prefer that you try and mug me in a dark ally, at least then I might have a chance.

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