Welcome login | signup
Language en es fr

Forum Post: The Gubment Should Stop Helping People Refinance...

Posted 12 years ago on Dec. 26, 2011, 1:20 p.m. EST by mee44 (71)
This content is user submitted and not an official statement

80% of Loan Mods Default Again

The relief distressed homeowners get from mortgage modifications is short-lived, with most of the loans falling into distress within a year after hitting the reset button, Standard & Poor’s Ratings Services said in a new report Monday.

The New York-based rating agency said 80% of the loans cured by a modification in the time period stretching from 2007 to 2010 defaulted again within 24 months. S&P compiled its report by analyzing nonagency residential mortgage-backed securities data provided by CoreLogic.

[2]The report titled “Loan Modifications Can Provide a Short-Term Cure, But Few Achieve Permanent Success” concluded that modifications are still acceptable market cures for lenders since they encourage more loan payments while keeping borrowers afloat.

Yet, the report says loan mods remain a short-term solution. In fact, principal reductions — which account for only 3% of loan modifications — have a better success rate in helping borrowers obtain a permanent solution, the report says.

More than 1 million nonagency loans were modified between 2007 and 2010, according to S&P. Of those loans, 19% of the outstanding accounts have already received at least one loan modification. After a modification is made on a loan delinquent for 60 days or more, borrowers generally make 7.8 additional payments before hitting a rough patch again, the S&P report says.

“At 24 months following modification, the payment statuses of modified loans showed no significant improvement compared with the month before they were modified,” said Managing Director Diane Westerback, who worked on the S&P report.





Read the Rules
[-] 7 points by nucleus (3291) 12 years ago

Meanwhile global banks get trillions with no questions asked.

"Conservative" logic: Blame the victim.

If the government had bailed out homeowners instead of banks, we would not have had to bail out the banks AND the insurance companies. Essentially, we bought and paid for the very same shit TWICE and still left the economy in the toilet.

Foreclosures are running 3,000,000 a year with no end sight. Whole neighborhoods are being bulldozed because it is cheaper than maintaining the properties. Meanwhile the number of homeless continues to grow ...

[-] 2 points by Jflynn64 (337) 12 years ago

Neither should have been bailed out. Let the bankruptcy process work. It's a part of life and would clear the system quickly.

And for those of you who like income redistribution, think of the opportunity that would go go people who have cash and could pick up those assets cheap.

[-] 7 points by nucleus (3291) 12 years ago

The purpose of government is to protect people, not corporations.

[-] 0 points by Jflynn64 (337) 12 years ago

Corporations are made up of people, and government is not there to protect people from themselves it is there to handle collectively what individuals cannot do individually, such as national defense and policing and organize and administrate a mechanism where citizens can adjudicate their disputes.

If corporations get themselves in trouble by taking to much risk then they should fail as should individual mortgage owners.

[-] 2 points by nucleus (3291) 12 years ago

Corporations have been granted constitutional rights that are reserved for individuals.

[-] 0 points by Jflynn64 (337) 12 years ago

So what are you saying, that government should protect people and corporations?

[-] 1 points by nucleus (3291) 12 years ago

The purpose of government is to protect people, not corporations.

[-] -2 points by America921 (161) 12 years ago

So your suggesting that taxpayers should bail out these idiots who bought houses they could not afford. My personal view is the government should not bail out anyone. They got themselves in this mess they are not "victims". Therefore they should pay for the consequences of their actions. I'm tired of this Liberal idea that everyone is a victim.

[-] 5 points by nucleus (3291) 12 years ago

This has been debunked so many times it's not funny, yet the conservative morons keep carrying Rush Limbaugh's water.

This was a top-down pump-and-dump investment scheme like many that have come before including the S&L crisis.

The difference this time was that banks created "no-income verification" loans with the full intention of reselling the loans before they exploded. Nobody with even half a brain would ever loan money to someone without full credit verification unless it was part of a bigger plan. This was done to bail the banks out of looming losses from nationwide the speculative over-development that they had underwritten (otherwise known as "the housing bubble"). Rating agencies (S&P, Moody's, etc.) were bribed to rate this repackaged shit AAA, and the investment banks then sold it, often to their own clients.

[+] -6 points by mee44 (71) 12 years ago


You mean like Democrat Franklin Raines who ran Fannie throughout this whole debacle? I didn't hear too many democrats complaining about income verification. On the contrary, they (Barney Frank, Chris Dodd, Nancy Pelosi, etc) pushed these policies in the name of "fairness in housing". Wake up.

Educate yourself:


[-] 5 points by nucleus (3291) 12 years ago

Educate yourself: Fannie Mae is a private corporation. And Democrats are just as corrupt as Republicans, they both feed from the same trough.

[+] -5 points by mee44 (71) 12 years ago

Private myass. It's a GSE (Gubment Sponsored Entity).

[-] 2 points by nucleus (3291) 12 years ago

"although the two companies are privately owned and operated by shareholders, they are protected financially by the support of the Federal Government"

Just like Bank of America, AIG, Goldman Sachs, etc.

[+] -5 points by mee44 (71) 12 years ago

The "government" doesn't bail out anyone. TAXPAYERS do.

If you don't want to be foreclosed on, don't sign up for a mortgage you can't afford.

[-] 5 points by nucleus (3291) 12 years ago

The "government" doesn't bail out anyone, just corporations.

If you want to take the profit, you should have to take the risk.

[+] -5 points by mee44 (71) 12 years ago

The TAXPAYERS bailed out GM because of their union dues and support to democrats. What do I owe unions or GM, huh ????

Why do I owe Solyndra or GE anything? Because Obama says so?

[-] 3 points by nucleus (3291) 12 years ago

GM is a corporation. Try to stay on topic.

Why do you owe Goldman Sachs $814 billion, or Bank of America $2.1 trillion?

[-] -2 points by mee44 (71) 12 years ago

Because half the staff in the Obama White House are former Goldman Sachs employees!


[-] 5 points by nucleus (3291) 12 years ago

Do you really think that banks haven't been running DC for decades?

Bush II appointed Goldman CEO Henry Paulson Secretary of the Treasury. His chief of staff, Josh Bolten, was Executive Director for Legal and Government Affairs at Goldman Sachs. Stephen Friedman, a chairman of Goldman, was Bush's President's Intelligence Advisory and Intelligence Oversight Boards. The list goes on and on, and many Bush appointees were later hired by Goldman.

[-] 1 points by usermap (8) 12 years ago

Mee44 is suggesting that we --- stop paying on our mortgage - put the 1 year we save by not paying - away in safe place-- do a Loan Modification- then not pay for another year- that's two years of mortgage that you have saved for your future- Mee44 you're the greatest