Comments for Citigroup Has Announced Its Plan to Rework Mortgages and Stop Foreclosures »
Posted By altnrg 1 year, 1 month ago in NewsNews 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, 1 month 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, 1 month 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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Jeboba1 year, 1 month ago
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and then Bush kicked it over the edge in 2002.
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White House Release:
http://www.whitehouse.gov/news/releases/2002/06/20...
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Endoscopy1 year, 1 month 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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wtagg1 year, 1 month ago
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They had no choice? That's pretty funny.
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Then the democrats get credit for the housing boom and the low rates that occurred during that period. Back earlier in this decade, the republicans hurt their hands congratulating each other for the very thing you are attempting to blame the democrats solely for.
Take a look at the Gramm-Leach-Bliley bill of 1999. Another bill applauded until just recently.
What you are asking for is more regulation. How liberal of you.
"2003 through 2006 Republicans tried to fix Fannie Mae and Freddy Mac but Democrats stopped any fix"
Provide some evidence where the democrats solely prevented this from occurring.
Plus, there is no empirical evidence that anything the republicans had planned would have prevented what occurred. What your narrow tunnel talk show entertainer vision prevents you from seeing is that this was much more than fannie and freddie. It was the breath of the entire market of pursuing a more risky business model than what was possible before all the deregulation was established. The whole market became one of speculation.
Deregulation, just like regulation, comes with a price. A free market allows businesses to do what they want. It shouldn't be a surprise when the early risks that are taken provide a larger return, that larger risks are taken to provide an even larger return. Eventually, the risks come back to bite one's hand. -
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Jeboba1 year, 1 month ago
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YOU ARE SO WRONG! A bipartisan group tried to fix Fannie and Freddie in 2004 but it was resoundingly voted down by the REPUBLICAN controlled congress.
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Do your homework. Stop listening to the right wing bullcrap!
Bush also pushed it off the edge in 2002. Read this:
http://www.whitehouse.gov/news/releases/2002/06/20... -
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Jeboba1 year, 1 month 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, 1 month 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, 1 month 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, 1 month 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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Jeboba1 year, 1 month ago
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Bush's fault
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White House Release:
http://www.whitehouse.gov/news/releases/2002/06/20...
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willottica1 year, 1 month 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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Endoscopy1 year, 1 month ago
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Of course you can't blame the Democrat CRA that rates banks for their compliance can you. The worst loans were made with the idea that they would have to foreclose but that was the cost of doing business under CRA guidelines That Democrats created to put compassion into mortgage rule so the poor could get their own homes whether or not they could afford it. Such compassion. Look at the cost. When will Democrats learn that compassion has no place in finances.
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willottica1 year, 1 month ago
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I'm not familiar with the CRA, but if it as you describe, then all who voted for it (Democrats AND Republicans) would also be partially to blame.
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However, this article suggests otherwise:
http://www.marketwatch.com/news/story/Comptroller-...
As for your question: When will Democrats learn that compassion has no place in finances? I'll respond with one of my own. When will Republicans, especially those who claim to be Christians, learn that compassion ALWAYS has a place, though it should not overrule common sense.-
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Jeboba1 year, 1 month ago
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READ THIS
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http://www.whitehouse.gov/news/releases/2002/06/20...
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k9kssr1 year, 1 month ago
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You know when I got a home mortgage (equity loan), I don't remember my loan officer "pushing" a loan on me that I couldn't afford. In fact, they were very upfront on the total cost including interest, the rate, what would happen if I defaulted, etc. They actually give you a "grace period" to change your mind.
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I just don't see these mortage companies going out on the street, dragging people in and forcing them or tricking them into talking out a mortgage.-
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wtagg1 year, 1 month ago
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So, that sort of goes against the myth of the government forcing the companies to make loans.
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As a potential person taking a loan, you go to the experts to see if you qualify. You rely to a certain extent on their financial expertise.
Yes, blame can be placed on many people accepting loans that did not make sense. Blame can also be placed on those that made the loan offers that did not make sense. Both took risks.
Sad thing is that the person who loses his home will in the end help bailout the company that repossesses it.
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k9kssr1 year, 1 month ago
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When I took out a mortgage I don't remember anyone "pushing" me into a loan I couldn't afford. In fact, it was all spelled out very well......how much the total loan would be including interest, the rate, the type ie. fixed vs. balloon vs. variable. The loan officer went over every aspect of the loan. There was even a "grace period" where I could change my mind and walk away.
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It just irks me when the term "pushed mortgages" is used.....like the borrowers were reluctant and got conned.-
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Charlson1 year, 1 month ago
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Borrowers were scammed by unscrupulous bankers and mortgage lenders in assuming mortgages they couldn't afford down the road. It was prepared so the borrowers could afford it at the beginning. The lenders wanted as many mortgages as they could get so they could bundle them together and sell them to investors for a tidy profit. Do some research and read the news and you might be able to understand this process of scamming the public.
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willottica1 year, 1 month ago
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When I took out my mortgage, I remember going to the bank and using the help of their financial experts to determine how much house I might be able to afford.
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There's no built-in common-sense-o-meter that tells potential home-buyers that a maximum of 30% of your income should go to housing, 40% to all-round debt servicing. These people want a house, so they go see experts for advice.
In a lot of cases, the advice given was to get the balloon mortgage because it would allow them to get the most house. They were encouraged to fudge their income numbers if "they" thought they could afford more. Mortgage brokers, many working on commission, encouraged people to "go bigger" with their mortgages, encouraged the teaser rates with a promise of easy refinancing later (when the house was supposed to be worth more).
I also imagine that your experience would differ significantly from someone's who didn't know exactly how mortgages work, and wasn't as secure financially. With you, they could afford to be honest, give you all the options, and know that they pretty much had a "sale" no matter what type of mortgage you decided to go with. With a sub-prime borrower, there's a good chance that if you only approve them for a $75,000 mortgage (for instance) and the house they want is $100,000 - they're not going to buy anything.
A good snake-oil salesman doesn't overcome your reluctance, he never lets the reluctance get a hold. He makes you eager, assures you of how easy it will be, and makes you believe that there isn't anything at all to worry about. A good mortgage lender, an ethical one, would let you know that there ARE things to worry about, and ensure that you have thought about all of them before entering into your mortgage agreement. Sadly, far too many brokers are of the first kind, and not the second.
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Jeboba1 year, 1 month 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, 1 month 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, 1 month 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, 1 month 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, 1 month ago
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POOR ENDO.. what kind of drugs you getting at the free clinic.. clouded your brain..
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that's why cra loans amount to less than 1% of the total.. 1%..
kinda like your brain....
almost all the lenders of the money were EXEMPT from CRA
read some magazines when you're down at the free clinic...
you might just get educated..
http://www.ocregister.com/articles/loans-subprime-...
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Will13131 year, 1 month 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, 1 month 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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Will13131 year, 1 month ago
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well they aren't out of the wood. just saying the trusts that are now foreclosing don't have the right to do so.. the bank that actually wrote the mortgage does.. but they must buy back the paper first.. to the best of my understanding...
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willottica1 year, 1 month ago
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That would make complete sense. And how much interest are they going to have in buying back all that worthless paper? Relatively little for most of the upside-down properties, since the paper would not be worth anywhere near its face value. Maybe the trusts would sell it back at a steeply-discounted rate...
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I really hope that the days of Home Real Estate being seen as a secure and profitable investments (rather than a home for a family in need) are over.
It's one thing to buy a house and rent it out as an investment: this provides a service to those who do not yet have the capital or credit history to buy a home of their own. It's quite another to buy a house and flip it: this provides a service to no-one and only raises the price for someone who needs the house to live in. Your "profit" is made not from the market, but directly on the backs of those you sell it to who, without your interference, may have been able to buy it for significantly less.
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reallypsst1 year, 1 month 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, 1 month 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, 1 month 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, 1 month 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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Jeboba1 year, 1 month 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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