FHA providing buying opportunities to those who defaulted on homes

[MR2]

FHA providing buying opportunities to those who defaulted on homes

Snips:

After two foreclosures and two bankruptcies, Hermes Maldonado is as surprised as anyone that he's getting a third shot at homeownership.

Last summer, the 61-year-old machine operator at a plastics factory bought a $170,000 house in Moreno Valley, Calif., that boasts laminate-wood floors and squeaky-clean appliances. He got the four-bedroom, two-story house despite a pockmarked credit history.

The last time he owned a home, Maldonado refinanced four times and took on a second mortgage. He put a Cadillac and Mercedes-Benz C300W in the driveway and racked up about $45,000 in credit card bills and other debts. His debt-fueled lifestyle ended only when he was forced into bankruptcy.

The FHA, which backs nearly 8 million loans, is helping rebound buyers recapture the American dream, boosting the housing market in the process. But that has touched off a fierce debate about the financial and ethical wisdom of bankrolling borrowers who contributed to the last housing bubble — and the potential cost to taxpayers.

"After everything that happened, thank God I was able to buy another house," Maldonado said in Spanish. "Now, it's good because the interest rates are low and there are lots of homes."

Critics worry that the FHA is foolishly allowing marginal buyers to get loans just three years after foreclosure with as little as 3.5 percent down. What's more, the agency doesn't even track how many rebound borrowers it backs.


According to Bloomberg, House Financial Services Committee Chairman Spencer Bachus, R-Ala., said Thursday that FHA officials have told him the agency will need a bailout from the U.S. Treasury within a month.

Read more: FHA providing buying opportunities to those who defaulted on homes - The Denver Post http://www.denverpost.com/business/c...#ixzz2CasgGVe0


So in order to get someone elected we start the whole housing bubble again which led to the still unresolved financial collapse - again?!?

[Pete]

And the FHA is $16 billion in the Red?

Most of the politicians in Washington don't have even the slightest problem with either issue.

[Gypsy]

A friend of mine lost her job 4 years ago, prior to this was gainfully employed and lived in a fiscally responsible manner.

After her job loss she worked several jobs, all of them part time, to make ends meet. A few months ago she just couldn't keep up due to even further PT hour cuts...lost her modest yet homey house.

I'm sure she'll love to read this article.

[The Reaper]

Originally Posted by Gypsy

A friend of mine lost her job 4 years ago, prior to this was gainfully employed and lived in a fiscally responsible manner.

After her job loss she worked several jobs, all of them part time, to make ends meet. A few months ago she just couldn't keep up due to even further PT hour cuts...lost her modest yet homey house.

I'm sure she'll love to read this article.

Maybe she should spend beyond her means and learn Spanish.

Then the government might help her.

TR

[Gypsy]

Originally Posted by The Reaper

Maybe she should spend beyond her means and learn Spanish.

Then the government might help her.

TR

Funny, that's what she said.

[Paragrouper]

and we can pay for this by simply redefining the 'rich' we'll tax.

Now maybe you're 'rich' too.

[ddoering]

"The last time he owned a home, Maldonado refinanced four times and took on a second mortgage. He put a Cadillac and Mercedes-Benz C300W in the driveway and racked up about $45,000 in credit card bills and other debts. His debt-fueled lifestyle ended only when he was forced into bankruptcy."

The good ole American dream.....

[ddoering]

He just one example of a parasite that has learned how to ride the system. There are millions of them.

[The Reaper]

Ten or twenty years in debtors prison or indentured servitude might change that spending habit.

Certainly, giving him more credit is not a viable solution.

TR

[charlietwo]

So... how much more of evidence like this is needed to convince people that this is all part of a plan? Destruction of the American economic foundation is essential for social justice. This is not 'stupid policy' or 'ignorance of economics'. This is planned destruction.

After the election, I vowed to cease giving people the benefit of the doubt for not seeing the desired end state. If you do not see it now, you are a fool.

[Dozer523]

Originally Posted by ddoering

He just one example of a parasite that has learned how to ride the system. There are millions of them.

I'm not sure he was born a parasite (although there is that ferrin-sounding name) after all the guy is 61 and holds a good job and initially bought a modestly priced home - he's in CA.
I suspect he wasn't born this way but was taught.
For those of you unfamiliar with the housing market in CA a few years ago it was wild. And the folks running the show were the mortgage refi folks from companies like Country-wide. These folks figured out a way to bypass only really efficient way to keep the mortgage industry safely afloat. And listen up! That safety valve was not the FHA, the VA or Fannie/Fredie. It was the BANKs!! In the old days mortgage-backed securities were boring but safe and a lot like securities with utilities (until assholes like Enron . . . ) Country-wide created a whole new way of doing business. They didn't underwrite like a bank because they weren't ever going to hold any of the business they created and they sold it directly to investors.
Another thing they did was sell the idea that home equity was some sort of self refilling piggy bank.
We bought a reasonably priced home in So CA in 2003. Watched our neighbors sell at twice and thrice the original price. We got out just as it started to suck. I ended up paying. $10,000 fee to the buyers rep (in addition to his slice of the regular arrangement.) we were lucky. We got out with a profit. The folks who bought it were foreclosed on and we only got 1/3 of the seller carry-back second. My neighbor did the cash out refi and has toys and a nice car. He will live in that house until the day he dies. It will probably never be worth the appraised value of his refi.

As for debtor prisons. We don't do that in America. But there are plenty of real prisons and the head of Country-wide is in one. Truth is there are lots of loan originators that should be there too. Who were the most aggregious resellers? Real estate sales people.

Lots of people were taken advantage of.

[ZonieDiver]

... there are plenty of real prisons and the head of Country-wide is in one.

Unfortunately, Angelo Mozilo is free as a bird (are birds really free?). He 'settled' with the SEC a little over two years ago for a 'fine' of $67.5 million dollars (and a lifetime ban of being an officer or director of a public company).

As a result of this 'fine' - all criminal investigations were dropped.

As part of BofA taking over Countrywide, BofA agreed to pay any fines that were leveled on Mozilo. Nice deal, if you can get it.

http://www.cjr.org/the_audit/bank_of...o.php?page=all

The list of the "Friends of Angelo" is very enlightening.

[Dozer523]

Originally Posted by ZonieDiver

Unfortunately, Angelo Mozilo is free as a bird (are birds really free?). He 'settled' with the SEC a little over two years ago for a 'fine' of $67.5 million dollars (and a lifetime ban of being an officer or director of a public company).

As a result of this 'fine' - all criminal charges were dropped.

Is this a great country, or what?
Maybe he owes someone some money and we can start up a debtor's prison. I like that idea.

[Richard]

Originally Posted by Dozer523

...we can start up a debtor's prison.

And bring back "indentured servitude"...???

Richard

[afchic]

Originally Posted by Dozer523

I'm not sure he was born a parasite (although there is that ferrin-sounding name) after all the guy is 61 and holds a good job and initially bought a modestly priced home - he's in CA.
I suspect he wasn't born this way but was taught.
For those of you unfamiliar with the housing market in CA a few years ago it was wild. And the folks running the show were the mortgage refi folks from companies like Country-wide. These folks figured out a way to bypass only really efficient way to keep the mortgage industry safely afloat. And listen up! That safety valve was not the FHA, the VA or Fannie/Fredie. It was the BANKs!! In the old days mortgage-backed securities were boring but safe and a lot like securities with utilities (until assholes like Enron . . . ) Country-wide created a whole new way of doing business. They didn't underwrite like a bank because they weren't ever going to hold any of the business they created and they sold it directly to investors.
Another thing they did was sell the idea that home equity was some sort of self refilling piggy bank.
We bought a reasonably priced home in So CA in 2003. Watched our neighbors sell at twice and thrice the original price. We got out just as it started to suck. I ended up paying. $10,000 fee to the buyers rep (in addition to his slice of the regular arrangement.) we were lucky. We got out with a profit. The folks who bought it were foreclosed on and we only got 1/3 of the seller carry-back second. My neighbor did the cash out refi and has toys and a nice car. He will live in that house until the day he dies. It will probably never be worth the appraised value of his refi.

As for debtor prisons. We don't do that in America. But there are plenty of real prisons and the head of Country-wide is in one. Truth is there are lots of loan originators that should be there too. Who were the most aggregious resellers? Real estate sales people.

Lots of people were taken advantage of.

Sorry my friend, but you are completely taking away any repsonisbility folks like the gentlemen in the story have for the situation. I don't care how predatory the lenders were. If you are not smart enough to read the fine print of the contract you are signing, or if you think you can own a $400K home making 30K a year, you are stupid and deserve what you get.

When you sign your name on a contract, that is your word. And if you don't have your word, you don't have shit.

No one FORCED these folks to sign a contract.