Fannie and Freddie: Why Government F's Up

[thewise1]

Originally Posted by Ardentfrost

That doesn't make sense. You're putting your property up as collateral for the payment. Eg., the bank can come and take your shit if you don't pay. But if you HAVE no one to pay, what else can they do but take the security and auction it off to settle direct debts?

The bank sells the property, and thus you have someone new to pay - the new owner of the note (and collateral).

Note: I don't know if that is how it works, but it makes sense to me that it would.

[Scrum]

Anyone have a refrigerator box my family can move into? We are headed that way and unfortunately a government bail-out, which i'm against personally, is about the only thing that will save us.

[thewise1]

Originally Posted by Scrum

Anyone have a refrigerator box my family can move into? We are headed that way and unfortunately a government bail-out, which i'm against personally, is about the only thing that will save us.

You can live with me, till I get kicked out by the bank

[DosEquis]

Originally Posted by Scrum

Anyone have a refrigerator box my family can move into? We are headed that way and unfortunately a government bail-out, which i'm against personally, is about the only thing that will save us.

There are a lot of financing options out there to save your behind. Call your mortgage company and be like "look...these payments are going to stop coming on time unless we work something out".

Friend of mine waited too long until it was in foreclosure (hosed his credit up), but even then he called and they cut his payment in half and gave him a year to sell it. He can live there, etc. As long as he can prove there was effort to sell it (listed with a real estate company, etc) and its not sold after 12 months he calls back to work something out further.

It costs them a lot of money if they have to come repo the house, it really is the last thing they want to do.

[thewise1]

Originally Posted by DosEquis

There are a lot of financing options out there to save your behind. Call your mortgage company and be like "look...these payments are going to stop coming on time unless we work something out".

Friend of mine waited too long until it was in foreclosure (hosed his credit up), but even then he called and they cut his payment in half and gave him a year to sell it. He can live there, etc. As long as he can prove there was effort to sell it (listed with a real estate company, etc) and its not sold after 12 months he calls back to work something out further.

It costs them a lot of money if they have to come repo the house, it really is the last thing they want to do.

That's good at least. I hope I never need to make that call.

[DosEquis]

Originally Posted by thewise1

That's good at least. I hope I never need to make that call.

Most certainly... if you see things starting to go south... call immediately. If he had called he could have worked something out to where he probably wouldn't have been in foreclosure AND not damaged his credit. If you know you are going to be 30 days late on something, call on day 20 so they can process the call and if you get something worked out it doesn't get reported to the credit agencies as a 30 day late. Stuff like that.

Goes for car payments, credit cards, student loans, house payments, anything.

[thewise1]

Originally Posted by DosEquis

Most certainly... if you see things starting to go south... call immediately. If he had called he could have worked something out to where he probably wouldn't have been in foreclosure AND not damaged his credit. If you know you are going to be 30 days late on something, call on day 20 so they can process the call and if you get something worked out it doesn't get reported to the credit agencies as a 30 day late. Stuff like that.

Goes for car payments, credit cards, student loans, house payments, anything.

Well, yeah. It always pays to be proactive and communicative in a situation like that.

[DosEquis]

Originally Posted by thewise1

Well, yeah. It always pays to be proactive and communicative in a situation like that.

A lot of people don't know they can do that though. They just think..well ..shoot can't make it this month there goes a 30 day late on the ole report.

[Ardentfrost]

You guys are basing your "what can I do if I get in trouble" theories on there being a market for your mortgage. If that market disappears because of the loss of Fannie and Freddie, then all that shit changes.

What thewise and I were talking about before is if you have a fannie/freddie loan and they close their doors and have to liquidate their $6 trillion in loans. The more private side of banking becomes saturated with those loans until no one takes them anymore. There could potentially be people that do NOT get reabsorbed, and their agreements are then nullified by the lack of lender.

The only thing that makes sense at that point is for the person to plead to the banking industry that didn't want to buy their loan, or get foreclosed upon so that Fannie/Freddie could finish closing up their assets.

I do want to point out that if this process were 100% private, NO company could control 50% of the market share. It's simply not possible.

[thewise1]

Originally Posted by Ardentfrost

You guys are basing your "what can I do if I get in trouble" theories on there being a market for your mortgage. If that market disappears because of the loss of Fannie and Freddie, then all that shit changes.

What thewise and I were talking about before is if you have a fannie/freddie loan and they close their doors and have to liquidate their $6 trillion in loans. The more private side of banking becomes saturated with those loans until no one takes them anymore. There could potentially be people that do NOT get reabsorbed, and their agreements are then nullified by the lack of lender.

The only thing that makes sense at that point is for the person to plead to the banking industry that didn't want to buy their loan, or get foreclosed upon so that Fannie/Freddie could finish closing up their assets.

I do want to point out that if this process were 100% private, NO company could control 50% of the market share. It's simply not possible.

Well hold on though, you still haven't really addressed the stuff I was talking about.

There may not be a market for the mortgage, but the mortgage comes with the property, I'm pretty sure, the more I look at this. So if the buyer of the liquidated property wants my house, they can put it on their balance sheet, but they can't just kick me out because I have a contract to pay on it and the only way that I can be foreclosed on is to be in default.

[kombayn]

I'm extremely disappointed in what happened today. Our deficit is going to be so big by the time the next President & Congress is in office in 2009, they have a big clean-up to take-care of and I still don't know how some people still support what George W. Bush is doing. I'm personally hoping a ton of incumbents in the Congress elections get voted out.

[Ardentfrost]

Originally Posted by thewise1

Well hold on though, you still haven't really addressed the stuff I was talking about.

There may not be a market for the mortgage, but the mortgage comes with the property, I'm pretty sure, the more I look at this. So if the buyer of the liquidated property wants my house, they can put it on their balance sheet, but they can't just kick me out because I have a contract to pay on it and the only way that I can be foreclosed on is to be in default.

Who do you pay if they close their doors and no one wants your loan because they think you're too high of a risk?

*Something* has to happen in that case. I think all the stuff you're looking at is the shit that protects you from getting suddenly foreclosed upon given that the bank/lender remains in business. But in the case we're talking about there is no one to sue, there is no company anymore that owns your loan. You don't own your house because it is still up for collateral in their accounts payable.

What happens?

As I've said, the only thing I can see that happens is they liquidate your house (or you try to).

[thewise1]

Originally Posted by Ardentfrost

Who do you pay if they close their doors and no one wants your loan because they think you're too high of a risk?

*Something* has to happen in that case. I think all the stuff you're looking at is the shit that protects you from getting suddenly foreclosed upon given that the bank/lender remains in business. But in the case we're talking about there is no one to sue, there is no company anymore that owns your loan. You don't own your house because it is still up for collateral in their accounts payable.

What happens?

As I've said, the only thing I can see that happens is they liquidate your house (or you try to).

I dunno. You might be right but I think there are protections against that beyond just your contract, also by law.

Unfortunately, even after reading about this stuff all afternoon, I can't cite anything that supports either of our conclusions.

[6SpeedTA95]

This is why government involvement in the markets should be minimal.

I also find it hilarious the same democrat senators who were calling for loosened restrictions just a few months ago blaming the bush admin for being too tight, are now calling for tougher restrictions and blaming the bush admin for being too loose...unfreakin'believable.

[Scrum]

Originally Posted by DosEquis

There are a lot of financing options out there to save your behind. Call your mortgage company and be like "look...these payments are going to stop coming on time unless we work something out".

Friend of mine waited too long until it was in foreclosure (hosed his credit up), but even then he called and they cut his payment in half and gave him a year to sell it. He can live there, etc. As long as he can prove there was effort to sell it (listed with a real estate company, etc) and its not sold after 12 months he calls back to work something out further.

It costs them a lot of money if they have to come repo the house, it really is the last thing they want to do.

Good advice, but we are on the other end of this. When loans don't get written, our income dries up. The mortgage industry workers are taking a beating.

[6SpeedTA95]

Originally Posted by Scrum

Good advice, but we are on the other end of this. When loans don't get written, our income dries up. The mortgage industry workers are taking a beating.

You can thank too much government for that one. Freddie and Fannie got wayyy out of control illegally securitizing loans and making loans all under the guise of "federally backed loans" which created a false sense of security. Ultimately what needs to happen is two things...first is a short term fix, to minimize the collateral damage currenctly being experienced and hopefully give home owners a chance to stay in their homes and give the mortgage industry a chance to recover without putting thousands of mortgage agents out on the street. Second they need to make freddie/fannie go completely private, get the government out of it.

[Ardentfrost]

Originally Posted by thewise1

I dunno. You might be right but I think there are protections against that beyond just your contract, also by law.

Unfortunately, even after reading about this stuff all afternoon, I can't cite anything that supports either of our conclusions.

There won't be any evidence because there is no contingency plan for this. No one thinks that their government program will be the downfall of the entire fucking economy, lol

And like I said, law means jack shit when there's no one to hold accountable. If you get shot in the leg by someone, and then he gets abducted by aliens, never to be seen again, you just gotta deal with a shot leg. There's no one there to pay for your medical bills or rehabilitation. You can sit there and bitch about that mother fucker that shot your leg all you want, but it doesn't unshoot your leg.

[thewise1]

Originally Posted by Ardentfrost

There won't be any evidence because there is no contingency plan for this. No one thinks that their government program will be the downfall of the entire fucking economy, lol

And like I said, law means jack shit when there's no one to hold accountable. If you get shot in the leg by someone, and then he gets abducted by aliens, never to be seen again, you just gotta deal with a shot leg. There's no one there to pay for your medical bills or rehabilitation. You can sit there and bitch about that mother fucker that shot your leg all you want, but it doesn't unshoot your leg.

Different situation though. If the guy who shoots you in the leg gets abducted by aliens, you still own your leg.

If the bank sells your property, there will be a new owner. I don't think that they can kick you off the property because I think the note goes with the property. It's not a matter of going after the bank from something, it's a matter of the new property owner has to take your mortgage. I think.

And yes, there doesn't seem to be any visible contingency plan for this, so I don't know if I'm right

[WickedLou9]

Originally Posted by Ardentfrost

Who do you pay if they close their doors and no one wants your loan because they think you're too high of a risk?

*Something* has to happen in that case. I think all the stuff you're looking at is the shit that protects you from getting suddenly foreclosed upon given that the bank/lender remains in business. But in the case we're talking about there is no one to sue, there is no company anymore that owns your loan. You don't own your house because it is still up for collateral in their accounts payable.

What happens?

As I've said, the only thing I can see that happens is they liquidate your house (or you try to).

I think that nightmare is why fannie and freddie will not go under. The government simply won't allow it.