Our financial system is crumbling this week.

[AWvsCBsteeeerike3]

[quote="Popeye_Card"]

The problem is now, they're all in the same boat now. Whether they made responsible decisions along the way or not.[\quote]

That's actually not true. The number is still at 68 or 69%. The foreclosures happening now are still those that historically speaking could not afford to buy houses.

[Leroy]

Fannie and Freddie question -- how do you know if they own your loan? Do your payments go to them? I ask because of the new keep your home proposals. Our payments go to Wells Fargo, and I'm just wondering if they still own the loan.

[Freed Roger]

A thought came to mind - maybe its flawed/idiotic or already being done.

Years ago during the S&L bailout, I remember a client bought back some of their own loans.

I wouldn't mind the opportunity to buy my own debt back - at a discount of course.

And of course, I don't have that kind of money available, so this is where it gets sort of circular.
The govt is heading towards nationalized banking, so maybe this could be a way for it to administer some of this mess.

Suppose I owe $100,000 on a mortgage. Govt checks my credit-worthyness and the collateral situatin and lends me a portion of this -say $80,000 and I have to come up with $10,000. This $90,000 then pays off the $100,000.

This could accomplish several things at once - it seems a fairly simple way to get money to the banks and addressess the drop in market value of collateral situation. it seems easier than just re-working all the loans with the stupid banks. (downfall -stupid banks replaced by hopefully less stupid govt). Yet, it gets money to the banks and takes them out of the picture. They can take their hit and be done with it. Plus I save $10,000.

The key would be I would have to put up some of my own money on this paydown deal. It shows credit-worthiness etc.

And I'm guessing that if they offered wealthy people the chance to pay off their loans at 90c on the dollar many would jump on it. Their investments aren't earning that sort of return.

ok, rip away. call me stoopid/naive -I can take it.

[Hungary Jack]

Freed,

Your scenario really isn't much different than a judge-administered cramdown, by which a loan in bankruptcy has a portion of the principal written off, and other potential modifications. Mortgage owners are pretty loathe to do this for understandable reasons. It is not very fair to banks to accept a unilateral decision when bankruptcies are typically more protracted negotiations between creditors and debtors (cramdowns would be in done 15 minutes by administrative judges). Banks also hold out hope of seeing property prices rebound.

[KyCardinalFan]

Fannie and Freddie question -- how do you know if they own your loan? Do your payments go to them? I ask because of the new keep your home proposals. Our payments go to Wells Fargo, and I'm just wondering if they still own the loan.

I'm just guessing, but if you're still sending your payment to Wells Fargo, they must still own it. When we bought our first home in the mid-90s they told us that it was common practice that the mortgage may be sold to another bank. Within a year that's what happened and we had a new place to send our payment.

The reason why I'm guessing is because I don't know if Fred/Fan operates differently, being under the gov't. Although I'd think the banks wouldn't want to deal with the collection for Fred/Fan if they didn't have to.

[Hungary Jack]

Fannie and Freddie question -- how do you know if they own your loan? Do your payments go to them? I ask because of the new keep your home proposals. Our payments go to Wells Fargo, and I'm just wondering if they still own the loan.

I'm just guessing, but if you're still sending your payment to Wells Fargo, they must still own it. When we bought our first home in the mid-90s they told us that it was common practice that the mortgage may be sold to another bank. Within a year that's what happened and we had a new place to send our payment.

The reason why I'm guessing is because I don't know if Fred/Fan operates differently, being under the gov't. Although I'd think the banks wouldn't want to deal with the collection for Fred/Fan if they didn't have to.

I don't think this is necessarily true, because there are mortgage service companies that send bills and process payments as a fee for service, but they don't own the mortgage. A big bank like WF or Chase probably services the mortgages they own, as well as mortgages they may not own.

[Leroy]

General Motors Corp.'s auditor said formally Thursday that there is substantial doubt the struggling auto maker can remain a going concern, putting an official stamp on the company's dire condition and forcing GM to seek waivers from lenders.

The comments came in GM's delayed annual report filed with the Securities and Exchange Commission. Auditor Deloitte & Touche cited GM's continuing losses from operations, its negative net worth and an inability to generate the cash needed to run its business

I know those words probably bore most people to death, but this is very bad for GM. I used to do audits and never once used the going concern kiss of death.

[Radbird]

Very true. Those words are not used lightly.

[TimeForGuinness]

8 minutes of hilarity.

http://www.thedailyshow.com/video/index ... ial-advice

[clevername]

that was awesome.

when TDS writers are on they kill it.