Saturday, January 10, 2009

They've got another month...



Mortgage giants Fannie Mae and Freddie Mac said Thursday they will extend the suspension of foreclosure sales and evictions from single-family homes through the end of January. The companies had suspended foreclosures through the holidays, but were expected to resume proceedings after Jan. 9. The government-controlled home loan giants said the extension will allow borrowers facing foreclosure to keep their homes as it works with mortgage servicers to find options for troubled mortgage holders under the Streamlined Modification Program.

What's a "Streamlined Modification Program". That's FM and FMs plan to make people debt slaves. Borrowers would get reduced interest rates or longer loan terms to make their payments more affordable. Great, give em 50 year loan at 4.5% so they keep paying on something worth 1/2 of what they paid...... That will end well!

I'm sure this will help a few people, mostly in non bubble states where the negative equity amount is lower. But in SoCal I doubt many people will qualify. In addition with the mounting job losses fewer and fewer borrowers will have enough income to qualify.

None of these ridiculous mortgage workout plans put forth so far will help. The only thing that will help is mortgage cram downs. Generally speaking I am against cram downs. But if it will stop the job losses and get the economy back on it's feet then it's hard to oppose such a plan. However, I would only support cram-downs if they screen out those that lied on the mortgage apps. I would not want investors or speculators bailed out. And I would want the cram-downs posted as sales so the comps accurately reflect the current home values. But the bigger question is, "who's going to pay for losses". A cram-down means a loss for the lender. In Freddie and Fannies case we know who's paying for the loss, you and me. But what about the other lenders? In some cases if not most cases, mass cram-downs would leave the lenders insolvent (of course they already are anyway).

But I digress....it looks like the new years foreclosure wave has been delayed a month.

9 comments:

ButterMonkey said...

Shit. I was really looking forward to a bigger selection this spring. *SIGH* Maybe we'll find something next Christmas. LOL!

WunderPit said...

BM, it's only an extra month ;o)

Renee' said...

I took the family on another "home hunting excursion" this weekend...went to Horsethief Canyon for the heck of it. Spent about 2 hours driving down just about every block there was...if you can stand the drive, the HOA's and the high taxes,deals are to be had out there. Here's the thing - we wrote down address after address of REO's sitting out there with forsale signs that looked like they had been there for months - when I got back home and tried to look on many of the search engines for these homes - more than 50% I could not find...I am finding too that some of the realtors out there are wanting to be both the buyer & sellers realtor - I see many times where there will be some disclosure that if you are a realtor that they do not want to hear from you - they only deal with buyers - they don't want to play nice and share!
So - there are allot of homes out there but it seems that you have to do your own homework because not everything out there is is listed.

Allison said...

Renee - I've seen tons of homes with signs but no listings. When I call, the Realtor usually says they are waiting on a price from the bank. They just throw up their signs before the bank gives them the price. Sometimes this happens for months before the house is ever available to see.

Renee' said...

...waiting on a price "Ola Ching..."

My realtor says - MAKE AN OFFER!

In this market - anything goes - you can sometimes make an offer with the bank itself - sometimes these freakin realtors have a price from the bank - they just want to see what people will offer - someone offers lower than THEY are willing to sell it for than they make up some caca mammie story.

You know - this housing thing it's just WAYYY to damn crazy. I am to the point I just want to get a house to end the bloody maddness!

Allison said...

Renee - that is what I thought. But there have been two houses we were interested in that had a sign but no listing. The bank wouldn't take offers.

Allison said...

Ah, now I re-read your comment. You are right - it was probably the Realtor who didn't want to take offers, hoping they could get more once listed.

golfer_X said...

It is true that bank may not have approved a price yet. I think it was Jim the realtor in San Diego who waited months for the bank to give him prices on some of his REO listings. That's kind of realtarded in a declining market. Every day they wait those homes are losing value.

Renee' said...

I know there are realtors out there who probably dug the whole that their FOR SALE sign resides in now in a small fraction of the REO's out there where the bank has not given out a price yet-these realrors are just glorified housing pimps.