Everyone is free to negotiate with the banks.
Everyone is free to negotiate with the banks and the banks know that they are up against the wall with the massive drop in home values. There are people that are willing to walk away from their homes if the mortgage is twice the value of the property. It is a business decision. The banks, bankers and the press have tried to create a smoke screen with homeowners in order to keep the upper hand.
The smartest thing to do is to go right to the bank and negotiate your loan and terms if your collateral value drops 60 %. Why are people trying to hard to take freedom of choice away from a borrower? The banks have gotten their bailout and now they want to move on and start over leaving the homeowners in their wake. It makes perfect sense for the banks. They have not had to suffer any consequences of their self created securitized system.
The reason we are seeing so many more defaults is that the banks have dug in their heals, refusing to take any responsibility for this crisis. They will continue to blame the home owner until home owners stand up and fight back.
If you have a mortgage worth 500,000 and a home value of 250,000 you have a major problem. I understand that some people have fallen for the moral argument that is based on honesty and truth. However, there is no honesty in truth in sacrificing your future, or the future of your children, in order to say you “kept your word.”
The system has always been manipulated to the banker’s advantage. The old rules of keeping your word and following through to pay your debts to the local banker do not apply anymore. Back when you had one banker to go to that knew of you and your family, we all can understand the moral issues of walking away from your responsibility. But at the same time the banker also had the moral responsibility to consider changing situations of borrowers and be willing to make adjustments to loan terms when necessary. It was a two way street and it worked well for a long time because we knew where the note was held and bankers had to consider making a business decision to keep collecting payments, even if they were less, so cash flow remained.
Our system today has been taken away from the people and put into the hands of Wall Street. They took over the mortgage system because they saw a way to exploit it. The made billions while American’s were left powerless. At one time knowing your banker was a given. Today people are treated as a number to be used, exploited and discarded after the commissions have been made by the fat cats.
All people want is a fair shot at negotiating their contract. The situation, with so many underwater borrowers, is the anchor we will never be able to raise if the banks continue to exploit the government and borrowers.
Trying to negotiate a mortgage term change is everyone persons right. There is reason for people to feel such stigma when they say they want to re negotiate.
More people should be doing it now and more people should be seeing through the smoke screen of the banks. Many people are cloaked with shame because of the stigma attached to foreclosure. There is no reason people should feel ashamed about stepping up to the plate and re negotiating.
The wrench in the works was the government bailout. We handed over all the power to the banks and they have been holding us over a barrel ever since TARP was signed.
The banks refused to even consider a change in loan terms or balance write down once they had their vaults full of tax payer cash. Why would they? Our government just gave them a free pass to exploit all of their customers and then collect a huge bonus.
Everyone needs to stand up to the banks. Especially the people who are paying their mortgage. The system that is in place now is putting the title to your home at risk. If the court allows MERS to stand in place of the law then it will set precedent that all you need is a signature to make a claim against someone's home. Evidence of lien, proper chain of title or payment of deed and transfer taxes will no longer be needed. Even after you mortgage is paid off and you pay your taxes in full, if we allow MERS to continue to claim ownership for the banks free and clear houses will still be subject to repossession. If MERS can not prove ownership rights in accordance with the current laws but are allowed to claim ownership, home ownership will be an idea thats time has come. Who in their right mind would pay a large sum of money for a down payment on a home knowing they will never really own it or be free from claims for anyone along the MERS fictitious chain of custody. ?
How about a complete mortgage walk out across the country? How about 14 million mortgage paying customers of bank of America take one month off from paying their note? I am sure it would quickly change the balance of power. The banks that are obligated to pay out to the securities holder even though the borrower didn’t pay that month would likely be in deep trouble.
I am sure they would step up to the negotiating table like the intelligent business people they claim to be after seeing 1.4 billion in monthly payments not be credited to their proper accounts.
But I am sure we will keep seeing the headlines saying that Wall Street Blames Borrowers. It is typical of the American condition. Those that are not willing to stand up for themselves and take the risk of re negotiating will forever be angry with those who are willing to fight for fairness when the odds are stacked against them.
The reality is that contracts can be re negotiated by the parties involved. It is not a moral question. We have collateral that has been drastically lowered in value and to expect people to suffer the entire burden of that value change is ridiculous. Everyone would benefit from writing down mortgage balances as it would free up capital to grease the wheels on the economy. Housing prices would stabilize and banks would be able to lend money again. They would have to write down many of the balances and it would show just how fragile the banking system really is now but we are in for a major railroad job if congress and the people let the banks keep robo-signing documents in order for the banks to save time and money.
People that make baseless and shallow comments about people who decide to strategically default, or walk away from a home, that is now worth 40% of the mortagage value are simpletons. It is beyond comprehension as to how anyone other than bank employees could side with the banks on this blatant issue of fraud. The banks purposefully created their own system of title for ownership transfer primarily to cut out the count and state governments who collected hefty fees everytime an ownership change gets recorded.
If it was anyone other than the banks trying to pull something like this off there would riots in the streets across the country. However, everyone seems to be so brainwashed by the necessity of letting those who created this major crisis continue to run their companies and sit on piles of "free" government money. Free to the banks but not free to the tax payer.
On top of all the reasons the banks can be blamed for ruining the housing market and the economy, they can be blamed for dragging this recession/depression out far longer than necessary. They could have had the housing market stabilized already if they would have worked on restructuring under water mortgages.