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Posted by: Wolfster 11 months, 1 week ago
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Wolfster11 months, 1 week ago
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Whether you think the irresponsible mortgagees should be bailed out or not (I emphatically do NOT), the fact is these houses are not worth nearly what is owed - in many cases they are worth half that. Even a dummy gets a clue to not throw money down a hole; that it's cheaper to just walk away and leave the money put in up to now.
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nostalgia11 months, 1 week ago
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That's the problem when you hand out "no money down" loans
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People have nothing invested in the home. It's like paying rent
They really don't lose anything by walking away
Look for new "cram down" provisions in the stimulus bill
It will allow bankrupcy judges to force banks to rewrite mortgages for "current" value not the original purchase price
So if the bank loaned the home owner $200,000 to purchase the house and it is now worth $150000, the new mortgage will be for $50,000 less than the original purchase price and the bank will lose $50,000
What do you think that will do to banks already in trouble?
You will see more bank bailouts and higher interest rates for people who now borrow
Some in Congress want the cram down provision inserted into the stimulus bill
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