Citigroup Has Announced Its Plan to Rework Mortgages and Stop Foreclosures »
Posted By altnrg 1 year ago in News
News of the housing market's economic temper may have gotten to the nerves of major banks. Citigroup Inc has now joined the ranks of lenders who have established programs to help their borrowers.
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Charlson1 year ago
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Citigroup has a reputation as a big banking corporation that is very impersonal not always easy to work with. It's good that they seem to recognize the need to help distressed homeowners and want to work with those with the income to meet their obligations.
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stalemateComment removed: Retracted by user29 Replies
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engineer1 year ago
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If the banks hadn't approved the loans in the firstplace, the current problem would not have happened. They counted on the value of homes constantly going up and those who could not afford the homes to increase their mortgages to keep paying the bank outrageous interest and fees. The banks greed backfired. The banks should have said NO!!!
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Endoscopy1 year ago
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They had no choice as the CRA as amended by a lobbying effort by ACORN starting in 1990. In 1992 they achieved their goal and CRA and some other banking rules were modified. These changes went into effect in 1995. Banks were rated on their compliance with CRA. If they did not have a good enough rating they were prevented from expanding etc. Therefore as time went on the better able poor got the loans first. Then the less able were given the loans. Bad loans were given in order to comply. These were a cost of doing business. The problem was that when the foreclosures started increasing in 2006 it made a problem in the housing market. Too many houses on the market because of the foreclosures and prices started falling. Builders did not realize what was happening quick enough so there was a glut on the market. The housing bubble burst and the financial mess we are in came to be.
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CRA created under Carter for minorities.
CRA amended under Clinton and other banking changes were made.
Went into effect 1995.
2003 through 2006 Republicans tried to fix Fannie Mae and Freddy Mac but Democrats stopped any fix
Thank you for this mess Democrats. -
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Jeboba1 year ago
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It was somewhat under control until George Bush pushed it over the edge in 2002. READ THIS OFFICIAL WHITE HOUSE NEWS RELEASE!
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http://www.whitehouse.gov/news/releases/2002/06/20...
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nostalgia1 year ago
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Two key requirements in the program
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"homes owned by its struggling borrowers who live in the said units."
This prevents the speculators from getting bialed out
"But the bank maintained that such a privilege will only be given to borrowers who have enough income to support the lowest offered payments. Such borrowers must also make an effort to resolve their foreclosure-related problems with them"
Will help in simply preventing a future foreclosre because the owner can't make even the reduced payments-
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willottica1 year ago
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I think this proposed help for homeowners is very smart. It will help those living in homes that could make do with a reduced payment, but won't reward those completely over their heads, nor those who just lost out on their investments.
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jerry991 year ago
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There is plenty of blame to go around- to the mortgage brokers who wanted clients, to the greedy homeowners who wanted a "free ride" and bought homes they could not afford, but especially to Barney Frank and his finance committee. There is a U tube clip of oversight hearing on Freddy Mac/Fanny Mae where auditors identified the problems of giving people loans they could not afford and they were attacked by Barney Frank and each of the black members of his committee. Frank said that they were mandated to give 50% of their loans to people that were poor- read that to say people who could not afford them- and nothing would stop them from continuing. Another typical government failure in social engineering, the worst since Lyndon Johnson had HUD buy one home on each block in middle class neighborhoods in Detroit and put a welfare family in each one. Detroit's population went from 2.3 million to 900,000. Now Frank and company want bankruptcy judges to be able to change the principal on mortgages so they can decrease them hundreds of thousands of dollars so we taxpayers can continue this social engineering welfare program.
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stalemateComment removed: Retracted by user
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willottica1 year ago
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It is the fault of those who walked in and got mortgages they couldn't afford.
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More to blame are the Mortgage Brokers who pushed mortgages that these people couldn't afford, promising them that they would be able to refinance to better terms before the rates reset.
ALSO to blame are the banks who sold these risky loans in such a way as to maximize their profit over the most desperate.
Why are interest rates higher for those who can least afford it? I don't believe one's credit rating should affect the interest rate one gets on a loan, only the total amount of the loan available. This would make far more sense, but would be far less profitable for the banks.
A much fairer system of mortgage lending would assume equality of all when it comes to rates and repayment terms. Maximum loan size would be dependant on the credit rating and income of the borrower, but other than that all is equal. Everyone gets prime rate. Those who miss or are late with payments would get penalized (a set penalty added to the principal). This would accurately reflect the risk of these loans, and would not make sub-prime loans riskier by asking higher rates of poorer people.
Of course, with this system, you wouldn't need mortgage brokers, and everyone would actually be able to understand the terms of their mortgages... a lot of unproductive middle-men might be out of work. (Oh well!) -
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Jeboba1 year ago
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George Bush threw his rich buddies a bone in 2002. THAT is when it started downhill. My wife worked in the mortgage lending industry and she remembers it well. READ THIS OFFICIAL WHITEHOUSE NEWS RELEASE. Up until then, everything was pretty much under control!
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http://www.whitehouse.gov/news/releases/2002/06/20...
STOP blaming the LEFT.
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nostalgia1 year ago
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What do you want them to do? They are too large and in a hole with subprime mortgages and toxic securities
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They have a workforce of 374,000
What do you want? Guaranteed employment for life??
This is what happens when an economy goes into recession - layoffs -
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Will13131 year ago
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The federal reserve sets banking rules and regs... Greenspan admitted that the fed dropped interest rates to stimulate the housing industry to stave off a recession in 2001...
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The peak period of the US real estate bubble which began in about 2002 when Alan Greenspan began the most aggressive series of rate cuts in Federal Reserve history was 2005-2006. Greenspan’s intent, as he admitted at the time, was to replace the Dot.com internet stock bubble with a real estate home investment and lending bubble. He argued that was the only way to keep the US economy from deep recession. In retrospect a recession in 2002 would have been far milder and less damaging than what we now face.
Fannie and Freddie have a very small portion of the sub-prime mortgages... and in 2001.. the republican congress removed congressional oversite of Fannie and Freddie.. and gave it to HUD..
LESS THAN 1% of the sub-prime mortgages are in CRA areas..
that is the NON FOX NEWS VERSION..-
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Endoscopy1 year ago
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Ended up above Will1313
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Poor Will1313
Try to understand that it was the housing market that crashed. A major reason for the crash was the CRA loans that ended in foreclosures and put a lot of houses on the market when the builder were going gangbusters trying to keep up. All of a sudden in 2006 there were too many unoccupied houses and the bubble burst.
If these banks did not give the loans the federal people overseeing the CRA ratings refused to allow them to expand. This in an expand or die area. Bad loans were just the cost of doing business. They did not foresee the housing problem.
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Will13131 year ago
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Banks were not selling MOST OF the sub-prime loans to fannie and freddie... they were being bought along with good loans by investment firms.. packaged into billion dollar lots and sold as MBS.. Mortgage Backed Securities.. to mostly retirement funds.. rolling good and bad mortgages into one package and selling them as bonds... with good interest rates and good ratings... till all hell broke lose.. then they cannot seperate where or which individual loans are actually in those bonds..
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Deutsche Bank Foreclosures Were Tossed Out of Ohio Federal Court .. because they don't hold actual mortgages.. only MBS.. judge said.. produce proof you hold a mortgage .. they could not..-
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willottica1 year ago
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Foreclosures on MBS tossed out of court!?
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That's awesome! I think that's very appropriate comeuppance for companies who broke mortgages up into tiny little bits to avoid taking on the whole thing themselves. They obscured the mortgages to the shareholders so much that there isn't even proof that they are mortgages!
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reallypsst1 year ago
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Citigroup is a commercial bank and is not consumer friendly, also the stagnation in mortgage restructure has a corrupt purpose of letting homes go into foreclosure so that banks and others can later resell at a profit.Thousands of homes are being foreclosed everyday.
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Jeboba1 year ago
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You are so totally wrong it is hilarious. Lenders LOSE BIG TIME in foreclosure! It costs them anywhere from $20-60K to foreclose and then they're going to make a profit by reselling? Really? When home values have plummeted?
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Please do read something and educate yourself rather than listening to the drivel from your Republican friends.
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saneman1 year ago
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When confronted with a problem, go directly to the top of the lending companies since they have the cognitive abilities to solve problems, Right? What idiots! Most of the financial disasters could have been nipped in the rear had these morons at the outset decided to work with the borrowers to avoid going through foreclosures which typically costs the lenders more in the end run. How do such morons ever become the CEO's of such institutions?
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willottica1 year ago
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I wonder how many of these foreclosures could be avoided if the homeowners were offered equal-sized mortgages with the best current rates available to "safe" customers: pretend they have perfect credit scores, and offer them mortgages at those interest rates.
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I imagine the number that would be saved is fairly significant. IMO, this is what any bailout should offer, and no more. Buy up/out the crappy mortgages, and replace them with good mortgages at fair rates - allow them to refinance based on the original purchase price even if their home is no longer worth what it was, because, quite frankly, that's not the homeowner's fault!
If at that level, they still can't make ends meet, then they should lose their homes, because they are clearly living beyond their means. -
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twincamsoulComment removed: Hard Banned
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Jeboba1 year ago
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GEORGE W. BUSH pushed the mortgage industry off the edge in 2002 when he asked them to be more lenient. Don't believe it? Read this official white house news release!
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http://www.whitehouse.gov/news/releases/2002/06/20...
It's not too hard to figure out, Bush was throwing his big money buddies another bone!
And don't start the "It was the Democrats that did it" bullcrap! A bipartisan group tried to regulate and rein in the mortgage industry in 2004 only to be voted down by the REPUBLICAN controlled congress! -
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insuranceeseComment removed: Hard Banned
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