During the Depression (the one started in 1929) my grandfather went down to
the bank and bought the mortgage on his farm for about 7 cents on the
dollar.

So why 700 Billion $ and all these laws?

Wouldn't it be better (and simpler) to give people with mortgages the
opportunity to buy their mortgage for pennies on the dollar?

It may not fix every problem, but it would certainly be of great benefit and
reduce the cost of housing.

"Charles Momsen" wrote in message
...
During the Depression (the one started in 1929) my grandfather went down
to the bank and bought the mortgage on his farm for about 7 cents on the
dollar.

So why 700 Billion $ and all these laws?

Wouldn't it be better (and simpler) to give people with mortgages the
opportunity to buy their mortgage for pennies on the dollar?

It may not fix every problem, but it would certainly be of great benefit
and reduce the cost of housing.

An over simplification:
First of all, the world plus dog needs to understand that the word "banks"
is being used incorrectly. If the institution originating the loan(s)
does/did not have the word "bank" in their name, they are/were not a bank.
One example, Countrywide, the biggest mortgage originator which has gone
broke, was not a bank. Another example, Washington Mutual, is not a bank.
The former was a mortgage company and representative of those firms most
responsible for originating subprime loans (known among bankers as "liar
loans"). The latter was a savings and loan association, representative of
another non-bank group who made substantial subprime loans.

Regulations and capital requirements kept most national and state chartered
banks out of the subprime business, though politicians and the FED
encouraged all financial institutions to make loans to LOW INCOME people.
And some banks did make subprime loans, but immediately sold them in the
secondary market to investors like FreddieMac, FannieMae, hedge funds, and
private investors. These secondary firms sliced and diced and packaged the
loans and used them as collateral to issue MBO's (i.e., mortgage backed
securities). They then used the cash to buy even more mortgages, and
repeated the cycle, and all the participants were getting rich. (Towards
the end, the MBO's were so hashed up, that no one can figure out what they
are worth, if anything. Thus the MBO's became unmarketable. Since they
became ill-liquid (couldn't be readily sold), the house of cards came
tumbling down. I.e., a liquidity crisis.

Honest originators made the loans based on criteria set by the purchasers.
I.E., "formula" loans. They counseled customers to avoid adjustable rates
("gambler" loans). There were thousands of dishonest brokers who encouraged
borrowers to roll the dice, and there were millions of dishonest borrowers
who lied on their applications (you know who you are). But, the more
serious problem were honest, but perhaps greedy, people who bought more
house than they could afford by taking out low rate, adjustable loans. When
their rate went up, they could no longer make the payments.

They defaulted and now we have a world wide problem.

Those to blame:
borrowers
brokers
lenders
investors
regulators
politicians

Dave wrote:
On Wed, 24 Sep 2008 08:26:30 -0600, "Charles Momsen"
said:

Wouldn't it be better (and simpler) to give people with mortgages the
opportunity to buy their mortgage for pennies on the dollar?

With whom would you propose to negotiate the price?


With the Feds of course! After all the banks are claiming the debts are
bad and feel that you should pay for them. So you could basically give
the twits who took out mortgages they couldn't afford the houses, and
you can pay the banks for them. Or you could let the banks foreclose
and sell the homes at bottom line prices, write of the rest of the debt
and have you pay,,,,,hmmm looks like the only difference is who gets
the houses in the end..... carpet baggers or fools who can't figure out
a simple budget.

Cheers
Marty

"Dave" wrote in message
...
On Wed, 24 Sep 2008 08:26:30 -0600, "Charles Momsen"
said:

Wouldn't it be better (and simpler) to give people with mortgages the
opportunity to buy their mortgage for pennies on the dollar?

With whom would you propose to negotiate the price?

The one holding the mortgage. Merrill Lynch just sold their mortgages for 22
cents on the dollar.

"Dave" wrote in message
...
On Wed, 24 Sep 2008 11:14:53 -0600, "Charles Momsen"
said:

With whom would you propose to negotiate the price?

The one holding the mortgage. Merrill Lynch just sold their mortgages for
22
cents on the dollar.

Demonstrating, of course, that you know nothing about the mortgage backed
securities market.

The sword has 2 edges:
Contesting a Foreclosure Lawsuit -- Who Owns the Mortgage?
April 22, 2008, 10:41 am
Posted by Admin in Legal Information
Rating: 0/5 Votes : 0

There has been such a backlash against the subprime mortgage market that
even homeowners in foreclosure have realized the fraud that has been
perpetrated on them. In such times of economic crisis and blatant
corruption, government representatives have little choice but to pretend
they are protecting the public from greedy mortgage companies and bad loan
products.
It is in this environment that some homeowners have begun to contest their
foreclosures and have actually had some lawsuits thrown out of court until
the bank can prove its case. The two most publicized cases have involved the
ownership of the mortgage paperwork and the lender having standing to sue
for foreclosure, and the underlying fraud of the loan contract invalidating
the entire agreement.

The first type of case, in which the homeowners ask for proof that the
foreclosing bank has the ability to sue, has certainly been a temporary blow
to the banks. One of the main reasons for inflating the subprime market was
so that loan originators could sell the mortgages to financial institutions
or other banks which could then sell the rights to the monthly mortgage
payment income to investors and transfer the responsibility to collect these
payments to specialized mortgage servicing companies.

The problem with this approach is that it has resulted in the slicing up of
the mortgage contract, with no party really having ownership of the original
paperwork. When homeowners fall behind, the servicer or trustee tries to
initiate lawsuit proceedings to sell the house at a foreclosure auction, but
judges are beginning to realize that neither of these parties originated the
mortgage and can not prove that they own the loan.

In order for a second bank or financial institution to have standing to
bring a foreclosure lawsuit into court, they must have been assigned the
mortgage. Because this was not done in many cases where mortgages were
originated and quickly sold off in large loan packages, banks do not have
signed assignment paperwork; and with the collapse of the housing market,
many of the subprime lenders have gone out of business, making it impossible
to contact the originating mortgage company.

This puts these mortgage loans into a kind of limbo, where the homeowners
are not making their payments but the banks can not prove they have any
rights to those payments anyway. Homeowners who argue this case have met
with some level of success so far, with the banks being forced to stop
foreclosure proceedings on the house until they can prove they were assigned
the loan from the originating company.

The only drawback to this victory for the homeowners is that these cases are
being dismissed without prejudice, meaning that the bank can begin the
lawsuit again if they can prove ownership of the mortgage. The judges are
not ruling on the merits of the case (whether the owners are behind and
their home must be auctioned to satisfy the debt), but only on the lack of
standing to sue -- if the bank can get an original assignment, they can
begin to foreclose again.

But in a mortgage environment where so many homeowners were given bad loans
that they did not deserve and banks are being bailed out by the public for
bad loans they never should have made, it is only fitting that the owners
should score a handful of victories in the courts. In the future, there is a
good possibility that judges will argue that banks do not need to own loans
to foreclose on houses, thereby erasing the legal standing defense of people
against corporations; but for now, homeowners have one more defense they can
use to stop foreclosure.

"Dave" wrote in message
...
On Wed, 24 Sep 2008 13:37:32 -0600, "Charles Momsen"
said:

Contesting a Foreclosure Lawsuit -- Who Owns the Mortgage?
April 22, 2008, 10:41 am
Posted by Admin in Legal Information

I had seen the substance of that article a few weeks ago. At least he got
one or two things right amid his collection of misinformation.

About 6-9 months ago there was an article in the WSJ about some guy in
Indiana using the same ploy. Apparently he had stayed in his foreclosed home
for quite a while, years if I remember correctly. Do you remember the story?

"Dave" wrote in message
...
On Wed, 24 Sep 2008 14:27:54 -0600, "Charles Momsen"
said:

About 6-9 months ago there was an article in the WSJ about some guy in
Indiana using the same ploy. Apparently he had stayed in his foreclosed
home
for quite a while, years if I remember correctly. Do you remember the
story?

Vaguely, yes. That may be the story I had in mind.

Here is an account of a legal ruling from 3 years ago:

http://www.thelenreid.com/resources/...6_NYLJ_REU.pdf

Dave wrote:
On Wed, 24 Sep 2008 12:07:07 -0400, said:

With whom would you propose to negotiate the price?
Bankruptcy judges.

So every time somebody with a mortgage goes bankrupt, you steal a little a
chunk of money from the guys that made it possible to buy the house, eh? And
the judge decides how much to steal.

Oh no, steal nothing, use the taxpayers money to recompense the bank.
Oh,,, wait a sec,, that might cost near a trillion dollars, the American
public would never stand for that!

Cheers
Marty

If you're the guy providing money for people to buy houses, that's sure
gonna encourage you to lend more. Gee, you might even charge everybody
higher interest for taking the additional risk that some judge might steal
some of the money. Ya think?

I'm not at all sure that bankruptcy was what the OP had in mind.

wrote in message
...
On 24 Sep 2008 12:41:07 -0500, Dave wrote:

On Wed, 24 Sep 2008 12:07:07 -0400, said:

With whom would you propose to negotiate the price?

Bankruptcy judges.

So every time somebody with a mortgage goes bankrupt, you steal a little a
chunk of money from the guys that made it possible to buy the house, eh?
And
the judge decides how much to steal.

If you're the guy providing money for people to buy houses, that's sure
gonna encourage you to lend more. Gee, you might even charge everybody
higher interest for taking the additional risk that some judge might steal
some of the money. Ya think?

I'm not at all sure that bankruptcy was what the OP had in mind.

Your interpretation is extremely twisted and dishonest. You sound like
someone connected with banks.



By his own admission. He advises bank regulators!


--
"j" ganz @@
www.sailnow.com

Capt. JG wrote:

I'm not at all sure that bankruptcy was what the OP had in mind.
Your interpretation is extremely twisted and dishonest. You sound like
someone connected with banks.



By his own admission. He advises bank regulators!




I might have missed something, but I don't think that's what Dave said,
he did say something more like he deals with them, whether pro or con
was not mentioned.

Cheers
Marty