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Sometimes a stiff is just a stiff
Posted by: McQ on Tuesday, December 09, 2008

Remember all the "help homeowners restructure mortgages and save their houses" pleas we heard at the beginning of this bailout mania? All the "predatory lending" and unscrupulous lenders blame that was being tossed around?

Well, guess what? A lot of those who were defaulting on their mortgages then are defaulting on their new mortgages now. There's a reason they were bad credit risks in the first place:
"The results, I confess, were somewhat surprising, and not in a good way," said John Dugan, head of the U.S. Office of the Comptroller of the Currency, in prepared remarks for a U.S. housing forum.

"Put simply, it shows that over half of mortgage modifications seemed not to be working after six months," he said.
How bad is the default rate? Pretty bad:
Dugan said recent data showed that after three months, nearly 36 percent of borrowers who received restructured mortgages in the first quarter re-defaulted.

The rate of re-default jumped to about 53 percent after six months and 58 percent after eight months, Dugan said, without providing an explanation for the trend.
Explanation for trend? See title.
 
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"The results, I confess, were somewhat surprising, and not in a good way," said John Dugan, head of the U.S. Office of the Comptroller of the Currency, in prepared remarks for a U.S. housing forum.
Surprising?!?! Even a local bank manager could have told you that this would happen. Heck, a bank teller would have known. But this is the head of the U.S. Comptroller of the Currency!

I’m not religious, but this phrase keeps coming to mind. "Lord, you give them eyes and they do not see, you give them ears and they do not hear."
 
Written By: jjmurphy
URL: http://www.allthatisnecessary.com
"The results, I confess, were somewhat surprising,"

Another ********* expert, making big money for his expertise and experience. William F. Buckley once said, if I remember correctly, that he would rather be governed by people taken randomly from the phone book than by professional politicians. Evidently he could just as well have taken that a step or two further by including all the political appointments as well.
 
Written By: timactual
URL: http://
The problem is that these people bought houses that they could not afford.

The government should just lower home prices or raise everybody’s pay.
/sarcasm

If you gave me a million dollar house for free, here, I could not afford the taxes. I am relatively well paid, not by any stretch rich. There is no cure for stupidity.
 
Written By: MarkD
URL: http://
I think part of the problem is home values themselves, but I don’t disagree with the premise.

However, it should be noted that the experience of mortgage lenders prior to the market offering crazy stuff like ninja (no income, no job, no assets) loans and exploding ARM’s, the industry had a great return and a low failure rate on loans to subprime borrowers.

Someone can have 500 credit and be a reasonable risk, but someone with 500 credit and no income, no job and no assets, is a bad risk, every time. It’s only badly exacerbated in a down real estate market where they can’t even sell the property to get away from their own (and the banks) bad decisions.
Even a local bank manager could have told you that this would happen.
Local banks were, for the most part, the only ones smart enough to stay away from this junk. The geniuses in the big mortgage houses were the worst offenders, followed by the geniuses on Wall Street that bought them.
 
Written By: CaptinSarcastic
URL: http://

 
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