Mike’s Real Estate Show

“Hi, I’m from the government and I’m here to help!” Yes, I guess ANY action by the government might be a breath of fresh air but the reality will no doubt be disappointing. Since most of the loans are being “serviced” WHO is going to freeze the rate hikes? If Countrywide or any mega lender decides to NOT raise the re-cast rate what does the investor who purchased these loans do for recourse?

I could just hear the conversation, “So let me understand this Mr. Countrywide, you sold us loans with the anticipation of a return and now YOU change the terms in mid-stream? O.K., so why don’t you pay us the difference!” Where ARE the loans in question? Tokyo, Beijing? Paris? And which loans? Those loans with on-time payment schedules? Good credit scores, below the conforming Fannie Mae rate of $417,000? But do they really need the help?
  What happens to California where Countrywide made about 75% of ALL their loans? Back in ‘89-90 when this happened on a much lower level we had the politicians wringing their hands and thumping their chests at how we must spare the consumer the double whammy of loosing their homes through foreclosure and then getting hit with a 1099 from the Lender! NOTHING HAPPENED!!  The “Anti-Predatory” lending bill now going through the Senate for debate will no doubt end up watered down with another layer of “disclosures” to give the consumer.
  Yes, I’m not optimistic! I think our problem is we have huge numbers of homeowners who should NOT have been given loans to begin with and we are now thinking by freezing the re-sets all of a sudden these folks become viable borrowers. The issue runs much deeper than re-sets.
  We had a heart wrenching conversation with a nice older woman who had lost her condo to foreclosure. Our Realtor, he’s our REO guy, was going to be marketing the property for the lender. She called him to say she’d cleaned up the unit and vacuumed ‘real good” as she was brought up that way! She had been sold a horrific loan by a telemarketer who kept calling her and then sent a “notary” over to refinance her condo and had stuck her with a very small teaser rate, pre-payment penalty, LIBOR indice and had forged her loan documents to show she made three times her “retirement” salary! 
  Now, what does the government do about that? The lender in question is out of business, who knows where the telemarketer is, the loan was sold off to Wall Street and she now has to move into an apartment and give up her “adorable condo”!  Sorry, but this market can get me real icy!!