Only 170,000 have completed the paperwork, while 1.1 million home owners have begun the process.
The program is having a tiny impact on America's high rates of foreclosures.
Las Vegas is hard-hit by foreclosures but fewer than 4,000 homeowners have completed the paperwork for the program.
Read more on Over One Million Enroll In Obama's Mortgage Modification Scheme…
Filed under Banks, Foreclosure, Politics, mortgage by Luke Ford
February 25, 2010
Chase Blamed For Not Modifying More Mortgages
Why are banks getting blamed for not modifying more mortgages?
Why should they modify mortgages unless they believe it is in their self-interest?
What about the sanctity of contracts? People signed up for certain terms. If they can't live up to them, then they default and the bank forecloses.
Filed under Banks, Foreclosure, mortgage by Luke Ford
I am so glad that the federal politicians chose to bail out Fannie Mae and Freddie Mac. It is only costing us taxpayers over $200 billion.
That's crazy.
I'd love to see what some free market policies would do for the housing market. Let's stop intervening. Let home prices drop to a level where there's an efficient allocation of resources.
Filed under Foreclosure by Luke Ford
February 9, 2010
Why Is The Mortgage Default Rate So Low?
About 11 million American households are underwater on their mortgage.
So why don't more Americans walk away?
That's the theme of about a dozen articles in the New York Times over the past month.
Filed under Banks, Foreclosure, mortgage by Luke Ford
Banks and businesses walk away all the time from bad investments. It's called cutting your losses.
Individuals? Not so much. They're scared. They're scared of defaulting. They fear it shows bad character. They fear the hit it will give to their credit rating. They've never defaulted on anything so massive in their life. Their fears override their rationality.
Read more on Too Scared To Walk Away From An Underwater Mortgage…
Filed under Banks, Foreclosure, mortgage by Luke Ford
I am amazed at how often people stay in underwater homes. They have a huge economic incentive to walk away but they feel a moral responsibility to pay off their mortgage, even when it is not in their self-interest.
Read more on Feeling Like A Sucker For Not Walking Away From An Underwater Home…
Filed under Banks, Foreclosure, mortgage by Luke Ford
About eleven million American families are underwater on their mortgages. They owe more on their homes than they are worth.
Much of the time, it would make sense for these families to walk away from their mortgages.
Filed under Foreclosure, mortgage by Luke Ford
President Obama came out with his Making Home Affordable program. It's designed to help people struggling with their mortgage payments to modify their mortgages into something more affordable.
There's a big federal and state government push to reduce mortgage defaults. Home foreclosures drive down property values, which mean more people will go under water (owe more on their homes than it is worth).
Read more on Making Home Affordable Program Eases Up On Paperwork Requirements…
Filed under Banks, Foreclosure, Politics, mortgage by Luke Ford
When it is in the self-interest of businesses, they walk away from their mortgages all the time.
So what's good for the goose is good for the gander, right?
Lenders say there's something immoral about a homeowner walking away from his home. But what if it is the homeowner's self-interest? Why should he sacrifice himself for a bank?
Filed under Banks, Foreclosure by Luke Ford
Our housing crash started in 2007 with the subprime crisis. For weeks we debated whether or not it would be confined to the subprime sector.
Events seem made that discussion moot. The problem was not restricted to subprime. It was not restricted to prime loans. It was not restricted to real estate.
Filed under Foreclosure by Luke Ford