Responsible homeowners getting the shaft? Me thinks so

**Alundil** · 03-13-12, 09:18 AM

Rage grows over mortgage settlement - Mar. 13, 2012

NEW YORK (CNNMoney) -- As more details emerge about the massive $26 billion foreclosure settlement between the five biggest mortgage lenders and the states' attorneys general, a growing number of borrowers are realizing that the deal will do little, if anything, to help them out.

"The impact [of this settlement] will be small," said Mark Zandi, chief economist for Moody's Analytics. "It's not a home run; it's a single."
Principal reductions will also only apply to certain borrowers who have mortgages still held by the five major lenders: Bank of America (BAC, Fortune 500), CitiBank (C, Fortune 500), Wells Fargo (WFC, Fortune 500), J.P. Morgan Chase (JPM, Fortune 500) and Ally Financial.
Borrowers who have a mortgage held by Fannie Mae (FNMA, Fortune 500) or Freddie Mac (FRE) -- roughly half the market -- are out of luck. Loans insured by the Federal Housing Administration are also ineligible.

For the homeowners who bought responsibly and made their payments faithfully, the real inequity comes in the fact that their tax dollars are paying for government-funded programs to prevent foreclosures while irresponsible borrowers accrue the benefits like the ones offered in the settlement.
"So, these people who are underwater get a break from the banks, and other hard working folks like us get screwed?" wrote Karthik Subramanian, of Aurora, Ill., in an email.

**CivilWars** · 03-13-12, 09:25 AM

But it is not the fault of the upside down homeowner. It is the fault of the government for allowing the banks to take advantage of the well educated, and responsible, homeowners that were tricked into buying a bigger house than they could actually afford.

**Alundil** · 03-13-12, 09:57 AM

Riiiight...poor wittle wittle guys....deceived by uncle sam, the banks and their own greed for more than they could afford/need.

I'd let them all rot. But if people are getting help from the tax payers, the people that have acted responsibly shouldn't have to foot the bill for that for nothing.

But who am I kidding? It's the status quo. Carry on.

**blackgold** · 03-13-12, 12:14 PM

Having bought a house fairly recently, YOu'd be amazed at the shit Realtors try... You will learn soon Al. "I know you only wanted to spend 100k, but this house is a DEAL at 145k, I thought I just HAD to show it to you, it's only 5 dollars per 1k more (per month). I did my own thing and stuck to my guns.... I did go to the top of my budget but still think I got a good deal.
Brian

**Alundil** · 03-13-12, 12:30 PM

hehe - this isn't my first rodeo

this'll be house # 3 in Houston for me, and 4th in my life. (please note: I am not in the 1% so this would be the only house I presently have, not that I am buying a 3rd vacation home or an investment property.

**WickedTribe** · 03-13-12, 06:58 PM

I agree. As a prospective buyer, I'd love to see home prices come down to sane levels.

**QuickLightning** · 03-13-12, 07:24 PM

Originally Posted by WickedTribe

I agree. As a prospective buyer, I'd love to see home prices come down to sane levels.

Not sure why you think people keeping their homes through these measures will lead to lower prices at all... If anything, it will help stabilize them at their current level.

New homes right now are so damn cheap, especially with the ridiculously low interest rates, mostly because they have to compete with a market flooded with foreclosures. As those disappear, the market will start to bounce back.

**WickedTribe** · 03-13-12, 07:33 PM

Originally Posted by QuickLightning

Not sure why you think people keeping their homes through these measures will lead to lower prices at all... If anything, it will help stabilize them at their current level.

New homes right now are so damn cheap, especially with the ridiculously low interest rates, mostly because they have to compete with a market flooded with foreclosures. As those disappear, the market will start to bounce back.

I was agreeing with Al that these measures are bad and hurt buyers like me by keeping the prices artificially inflated.

**Bubbasam** · 03-14-12, 08:15 PM

Originally Posted by WickedTribe

I was agreeing with Al that these measures are bad and hurt buyers like me by keeping the prices artificially inflated.

They are slowly coming down where I live, and with the interest rates as low as they are (like Quick said), now and in the near future is a very good time to buy. I live in the Midwest, so the market here is definately different than Beantown. Hopefully you can find a good place for a good price.

**WickedTribe** · 03-14-12, 08:54 PM

Originally Posted by Bubbasam

They are slowly coming down where I live, and with the interest rates as low as they are (like Quick said), now and in the near future is a very good time to buy. I live in the Midwest, so the market here is definately different than Beantown. Hopefully you can find a good place for a good price.

Thanks, the market hasn't come down much, but it didn't spike as much here as it did in other places. The prices are still pretty outrageous. A coworker of mine just paid 700K for a 1800 sq. ft. apartment outside of the city.