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Bankruptcy Judges to Modify Mortgages ?

Discussion in 'Political Discussion' started by BelichickFan, Feb 9, 2009.

  1. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    (Note : My plan for the next 8 years isn't to criticize everything Obama does or says; it just seems like that because I disagree with most things he does and says :)).

    Moving on . . . does this :

    "If you are like most people, including me, and you've got one house ... it turns out that under current law you can't modify that mortgage if you are in bankruptcy, that makes no sense ... that is forcing a lot of people into foreclosure,"

    Obama Backs Rule Change to Modify Mortgages - Economy * US * News * Story - CNBC.com


    Seem weird to others ? Obama seems surprised and confused why a bankruptcy judge can't just change the terms of a loan. It never would have occurred to me that a judge should be able to say "you can't pay the monthly payment so I will cut your loan in half then you can get a new loan for that lesser amount whose monthly payment you can make. Next."
    Last edited: Feb 9, 2009
  2. Synovia

    Synovia Rookie

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    Hes not saying you only have to pay half.


    The issue right now is that if you're even close to bankruptcy, you have bad credit scores. If you have bad credit scores, you can't refinance.


    The problem is that banks are foreclosing on homes (and losing lots of money) where the person could probably pay if they had a market rate. Banks don't seem to be smart enough to realize that 30 years of 5% interest on a property that is overvalued is much better than cutting your losses, and selling the property for 30% of what you've got invested in it.

    No, they're not going to make as much money as if the person kept paying their 10% rate, but they're going to make money.
  3. Patsfanin Philly

    Patsfanin Philly Rookie

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    #95 Jersey


    If you remember Joe Biden had a throwaway line in his debate that no one (other than Patriots Reign and myself) picked up on that bankruptcy courts SHOULD ( his words) be allowed to adjust the principal(not just the interest rate) of mortgages. My suggestion was to lower it but put a lien on the house for the amount of the reduction. It keeps people in their houses, creates a disincentive to move up if they can't afford it and gets $$ back to the government when they die instead of their heirs, preventing an unjust enrichment....
    Last edited: Feb 9, 2009
  4. Synovia

    Synovia Rookie

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    Thats fine. BellichickFan just seems to like saying "obama said" to things he didn't actually say. Its becoming a rather common occurance for him.
  5. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    If he's suggesting forceable lowered interest rates to the lowest current market rate and extending the loan term then that makes sense - I'm not sure that's what he's talking about, though, with so much talk about simply lowering the principle on troubled loans.
  6. Synovia

    Synovia Rookie

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    If you're not sure what hes suggesting, say that. Don't say hes cutting loans in half.
  7. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    He said "modify that mortgage"; I'd like to hear him say just the interest rate before I'm letting him off the hook, until then anything in the mortgage would seem to be in play.

    p.s. learn to spell Belichick.
  8. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    I didn't say that, I used "half" as an example. I was referring to a generic "modification of mortgages" which doesn't exclude principal.
  9. Synovia

    Synovia Rookie

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    Thats not how it works. If you want to say "you can't pay the monthly payment so I will cut your loan in half then you can get a new loan for that lesser amount whose monthly payment you can make. Next."

    Find some actual evidence instead of misquoting people.
  10. Synovia

    Synovia Rookie

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    Nor does it, in this case, necessarily include principle, despite your insistence.
  11. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    I quoted him as wanting to modify mortgages. He's the one who made a wide ranging, generic statement. My reading "including principal" into that may be right and it may be wrong - he should think about being more specific if he doesn't want to be misunderstood. As it stands he said "modify mortgages" not "adjust interest rates" so we don't know what he really means.
  12. Synovia

    Synovia Rookie

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    Which is why you say " I don't know what he means" instead of saying hes cutting mortgages in half.
  13. PatriotsReign

    PatriotsReign Rookie

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    There will have to be some level of fairness to any program aimed at helping people stay in their homes. for example, you can't help out Joe who lost his job so he can stay in a $400K house and dramatically reduce his payments, but not help his neighbor Sally who has a job and the same house but is paying 30% higher payments than Joe.

    That won't fly with the American people at all. So if you're gonna help Joe, you MUST offer Sally the same deal.
    Last edited: Feb 9, 2009
  14. BelichickFan

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    #24 Jersey

    I asked the question in the thread. It sounded weird to me. You have presented a possibly plausible explanation. If that ends up being correct, Obama needs to be more careful with his words IMO. One of his problems is he likes to talk; which is fine but it you talk you have to be careful what comes out especially when you're the President.
  15. Synovia

    Synovia Rookie

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    And if its just rate reduction, thats already built in. Sally can afford her mortgage, so she can refinance. Joe is on the verge of bankruptcy, and doesn't have the credit to refinance.
  16. Synovia

    Synovia Rookie

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    And I disagree. Nothing he says can please people like you. He said nothing about reducing people's principle.

    You're making things up, and then attributing them to him. If he is more careful with his words, you'll just attribute something else you've made up to him.
  17. BelichickFan

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    #24 Jersey

    He said "modify that mortage". That is open to be construed as any part of the mortgage. If that's not what he meant then he shouldn't have said it.
  18. PatriotsReign

    PatriotsReign Rookie

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    If that's the case, I'm fine with it. As long as some people aren't offered something that others can't get.
  19. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    That could be feasible if he stays with the same mortgage company. But forcing bad risk mortgages on banks was the beginning of this problem. If the bank already has the bad risk it makes some sense - but banks have to have terms which are profitable too, they can't offer "at cost" loans just to keep people in houses and make no money.

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