The Mortgage Police are Coming

I hadn't planned on posting today; but, I have yet to see anyone bringing up this issue. I will start with a link to the original story. Chicago Tribune - Mortgage cops taking tough stance

This is very important and people need to consider how it may impact them. Basically, 80% of all mortgages are owned by Fannie Mae or Freddie Mac, the government. The Federal Reserve under QE3 is now set to buy $40 billion in mortgages a month from banks. The Office of the Inspector General at the Federal Housing Finance Agency has just announced that people who walked away from their mortgages when they could have paid them are going to be prosecuted and jailed and it will be very easy to do so.

Lets say that you took out a mortgage with 3 years of interest only payments. The value of the property went down and even though you could make your payments, you decided to walk away from the property. That is called a "strategic default". The people who did that and then bought a house another house are going to jail. That is the first group that they are going after; but, not the last.

Perhaps you bought a house, the market turned and you stopped paying your mortgage hoping you would be foreclosed upon. You would also be at risk. If you rented your property out and didn't bother to pay, you will be targeted too. It will be very simple to prove fraud. If you bought your house based on "stated income" and lied about how much you made, the Fed will pull up your tax return for the years in question and your stated income document and they better be in agreement. The question will be simple, do you want to go to jail for lying on your taxes or lying on your mortgage documents?

When I bought my house I did a full doc loan with two years of tax returns and multiple pay stubs. I had a 30 year fixed 4.5% loan. While I was getting divorced, I continued to pay my mortgage. After the divorce the alimony was so high that I could not pay it. I spend two years calling the mortgage processor on a monthly basis and eventually was given a Deed in Lieu, that means they accepted the house as payment in full. People who lost their jobs or had other life altering experiences would also have sought a deed in lieu.

So lets say that you are someone that could be making your mortgage payment, this is a really good time to refinance and begin making your payments. It might just keep you out of jail later.

reply to post by AQuestion


To whoever may read this thread. I am always surprised about what people read and don't read on ATS. I would have bet that more people would have been interested in this subject. Oh well as they start arresting people for their strategic defaults it will become big news. Hopefully, if anyone knows of someone who is at risk they can tell them about the coming arrests and convince them to refinance and pay their debts. At least if you can show you tried to refinance you will have a defense.

There is a loan called the HOPE loan. It can cut your principal in half. If you had an interest only loan, the payment would be about the same as it was. I did what I could, I am telling people.

Originally posted by AQuestion
reply to post by AQuestion

 

To whoever may read this thread. I am always surprised about what people read and don't read on ATS. I would have bet that more people would have been interested in this subject. Oh well as they start arresting people for their strategic defaults it will become big news. Hopefully, if anyone knows of someone who is at risk they can tell them about the coming arrests and convince them to refinance and pay their debts. At least if you can show you tried to refinance you will have a defense.

There is a loan called the HOPE loan. It can cut your principal in half. If you had an interest only loan, the payment would be about the same as it was. I did what I could, I am telling people.

I read a lot of threads I don't respond to. I read this. I understood it. I have nothing to add.

This is interesting news and important stuff, and I will pass it on to people I know.

I suppose the least I could do is say thanks. Thanks....

reply to post by AQuestion


I think that this is a fine line between "debtor's prison" and "intentional fraud" here.

And why now? What about all the people who apply for and get credit cards, spend them beyond the limit (some cards let you go over the limit and do not cut you off because they want to charge you all the associated over limit fees) and then filed bankruptcy...on purpose? That's happened for years, and they don't go to jail.

I pray my mortgage is not bought by the government.

reply to post by Ameilia


Dear Ameilia,

Prior to the housing crash, I was asked to give a seminar in Las Vegas on the housing market. The class was attended by real estate professionals and "investors". I did it as a favor for a friend. I told them how the fundamentals were totally wrong and that the market would crash. I also met with three mortgage brokers who came down to meet me in California, I told them the same message, they didn't listen and all went bankrupt.

The truth is that when the market was booming, you didn't have to understand real estate at all to make money, you just had to get people to complete forms that were barely reviewed. A lot of people got easy loans, didn't really understand and thought they would refinance later. Others were simply house flipping, heck they had television shows about it. Plenty of blame to go around; but, the real issue is what do we do now.

If someone made a mistake there is still a chance to better position themselves for what is coming. For four years people have been offered the carrot, an opportunity to refinance. Every time I called my loan processor they offered to refinance; but, the alimony was more than my mortgage had been, I had no way to pay it. I would never claim that they had not offered to refinance, their offer would have saved me maybe $100 a month, I paid $2,100 for taxes, insurance and the mortgage. A hundred dollars would have meant absolutely nothing. Even the HOPE loan would not have helped; but, I was aware of it.

The government's intent is to get people to refinance, rent our rooms if you must; but, foreclosure is not much of a good idea. If one is foreclosed upon they may have to pay the taxes on the difference for what they owed and what the original loan amount was. I hope someone finds the information useful. Peace.

Nobody should be paying for anything after finding out that the banks have been manipulating interest rates among other factors to people who need loans....
The Libor scandal should have smartened people up, but it was quickly hidden away after brief mention.....
The system is designed to take good care of those with the money......the Banks, the cops, the businessmen, and the goverment.
The rest of ius are mere resources for these vultures to pick over......
The real fight is with those who run the financial system....they have stolen many trillions of dollars off the public, and they need to be lynched.

Really very interesting. I knew mortgages legal working in US it's pretty different compared to Spain (I'm spanish), but I didn't know that being able to continue paying your mortgage month by month you in the US have the choice for "leaving the game" if you are in "negative equity" and consider a large rampant curve going down in prices for medium and long term.

Well, the freedom market for banks (I don't wanna talk of prices power or interest rate manipulation), here has an angry side for them. So the mortgage taker has this freedom either, just a reasonable margin to manoeuver when loss comes....uh...... I'm not very sure of all this but I suppose would be some reasons to allow the customer (mortgage takers) acting like that (some conditions, finantial loss or job loss).

Ok. I know this is called there "ringing mails". And I thought is not the same in all states.....
Here, we live in a drama for the monster -spanish real-estate bubble (NEVERENDING BUBBLE).
With currently above 150 per day evictions.

If you know spanish here there's a lot of stuff
www.burbuja.info...

No posibility in Spain to do that. Here who subscribes a mortgage, is a total slave-prisoner of the banks till the day to finish the last payment.......

If you loss your job. Banks doesn't mind that. Then ususally after 3 months without payments. Bank can legally execute the mortgage. Then the house (usually more flats here) comes to a public auction and if no-one bids (what's usual in the current stage) then flat comes to bank properties covering only the 50% of the original value assessment. But the rest of the difference to cover the value of banking loan (really here there are no motgages but loan covered by the same house price -which is not exactly the mortgage system in US and probably UK-), it's responsability for the rest of his life for the mortgage taker......so that's why I said, here in Spain taking this mortgage, you have to be very, very covered with savings, good job, good contacts..... so don't complain for the power banking as in Spain....ALL THE POWER belongs to the bankings..........


Sorry if my english is not accurately academic.......

Yeah, this is not going to fly.

Nice scare tactic on their part though.Think about the numbers. We'd have to build a whole state worth of prisons for the amount that would be arrested. Not to mention, you think you can take away a third of society and lock them up without a backlash?

Scare tactics.

I'm going to call this male bovine feces. There is no criminal act involved here. They could sue in Civil court and that is about it.

A banker cooks the books, lies, makes clearly false statements, misleads investors and generally trips the light fantastic around everything legal and they get bailouts and bonuses.

The general population does the same and gets a jumpsuit.

Go figure.

reply to post by VerboetGladio


Dear VerboetGladio,

Your English was fine. In the US we called it "Jingle Mail"; but, I easily understood your translation. It was interesting to read how Spain approaches mortgages. Isn't it interesting how so many western countries had the same housing bubble at the same time? Historically housing markets were local and one did not effect the other. How could all of these countries make the same mistake at the same time?

Originally posted by SunnyDee
Yeah, this is not going to fly.

Nice scare tactic on their part though.Think about the numbers. We'd have to build a whole state worth of prisons for the amount that would be arrested. Not to mention, you think you can take away a third of society and lock them up without a backlash?

Scare tactics.

Dear SunnyDee,

They did not say that everyone was going to jail. They specifically mentioned people who strategically defaulted. People who walked away and could have paid. I expect many of them to blame their lenders and say that some of the processors were in on it, they will testify against the lenders to avoid prosecution. They will purge the system of the bad processors, it happens everytime the market contracts.

I really feel for you guys who are trapped

I hope this post will help some of you out S&F

This mortgage mess falls on the mortgage banking devils who allowed stated income loans and had conservative underwriting guidelines, loaning money to people who had bad credit and high debt to income ratios. It also falls in the hands of the loan officer whores who falsified numbers and loan docs, just to get that fat commission check. The banks can go F themselves.

reply to post by solarstorm


Dear solarstorm,

The banks sold their loans to the Federal government and now the Federal Reserve is buying the rest of them to the tune of $40 billion a month. The banks are being bailed out by these purchases and the government will own all the loans, that means that our taxes will pay off the losses, not the banks.

reply to post by pillock


Dear pilock,

What a nice sentiment. While I am not in trouble because I got a Deed in Lieu, I am concerned about those who may have acted improperly and wanted to be informative. Star for you, for caring about others.

Debtor prison? Is that even legal? What about repackaging mortgages and selling them off, with no way to tell what the package consists of?

This mortgage mess falls on the mortgage banking devils who allowed stated income loans and had conservative underwriting guidelines, loaning money to people who had bad credit and high debt to income ratios. It also falls in the hands of the loan officer whores who falsified numbers and loan docs, just to get that fat commission check. The banks can go F themselves.

I can tell you why it has been done. In a capitalist system, unless the saving rate is zero new money has to come from somewhere else at some point all money ends up in the bank depot of somebody who has the resources to run a high saving rate.

You cant fire up the ole printing press, inflation is already really high also inflation would negatively impact all those rich folks with a lot of cash and a lot of debt that has to come their way. You cant tax the rich, because they bought government and they dont like it and wont allow it. So you need everybody who isnt among the top 1% to take out loans and in turn infuse those loans into the economy. The bubble will bust when a significant percentage of debtors start to take their debt to their graves.

Originally posted by AQuestion
reply to post by VerboetGladio

 

Dear VerboetGladio,

Your English was fine. In the US we called it "Jingle Mail"; but, I easily understood your translation. It was interesting to read how Spain approaches mortgages. Isn't it interesting how so many western countries had the same housing bubble at the same time? Historically housing markets were local and one did not effect the other. How could all of these countries make the same mistake at the same time?

Maybe Robert Rubin (among others) can easily shows us a bit of that ......

Another scam.

A scam a day keeps the dollars flowing your way.

It's always about money and making more money.