Comments on: Homeowners Walk Away http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/ Stocks, charts, risk management & coffee Fri, 30 Jul 2010 08:26:54 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: chartsandcoffee http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/comment-page-1/#comment-1203 chartsandcoffee Thu, 18 Mar 2010 00:03:41 +0000 http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/#comment-1203 Actually, most commercial real estate loans are backed by a guaranty by the <br>company or the principals. There are some non-recourse loans, but those are <br>mainly a thing of the past in commercial real estate. Even the non-recourse <br>loans today are really recourse because of all the carveouts in the <br>documents. The banks calls some of these loans "non-recourse with bad boy <br>carveouts," but when you dig into the documents you're really getting a <br>recourse loan. These kinds of provisions used to be negotiated in favor of <br>the borrower, but with the economy the way it is the lenders dictate the <br>terms. Actually, most commercial real estate loans are backed by a guaranty by the
company or the principals. There are some non-recourse loans, but those are
mainly a thing of the past in commercial real estate. Even the non-recourse
loans today are really recourse because of all the carveouts in the
documents. The banks calls some of these loans “non-recourse with bad boy
carveouts,” but when you dig into the documents you're really getting a
recourse loan. These kinds of provisions used to be negotiated in favor of
the borrower, but with the economy the way it is the lenders dictate the
terms.

]]> By: chartsandcoffee http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/comment-page-1/#comment-1893 chartsandcoffee Thu, 18 Mar 2010 00:03:41 +0000 http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/#comment-1893 Actually, most commercial real estate loans are backed by a guaranty by the <br>company or the principals. There are some non-recourse loans, but those are <br>mainly a thing of the past in commercial real estate. Even the non-recourse <br>loans today are really recourse because of all the carveouts in the <br>documents. The banks calls some of these loans "non-recourse with bad boy <br>carveouts," but when you dig into the documents you're really getting a <br>recourse loan. These kinds of provisions used to be negotiated in favor of <br>the borrower, but with the economy the way it is the lenders dictate the <br>terms. Actually, most commercial real estate loans are backed by a guaranty by the
company or the principals. There are some non-recourse loans, but those are
mainly a thing of the past in commercial real estate. Even the non-recourse
loans today are really recourse because of all the carveouts in the
documents. The banks calls some of these loans “non-recourse with bad boy
carveouts,” but when you dig into the documents you're really getting a
recourse loan. These kinds of provisions used to be negotiated in favor of
the borrower, but with the economy the way it is the lenders dictate the
terms.

]]> By: Richard http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/comment-page-1/#comment-1202 Richard Wed, 17 Mar 2010 23:41:40 +0000 http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/#comment-1202 None of the residential loans should be recourse loans. Either bank does a good loan or does not do it at all. How come corporation can walk away from mortgage and assets of owners are protected? None of the residential loans should be recourse loans. Either bank does a good loan or does not do it at all. How come corporation can walk away from mortgage and assets of owners are protected?

]]> By: Richard http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/comment-page-1/#comment-1889 Richard Wed, 17 Mar 2010 23:41:40 +0000 http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/#comment-1889 None of the residential loans should be recourse loans. Either bank does a good loan or does not do it at all. How come corporation can walk away from mortgage and assets of owners are protected? None of the residential loans should be recourse loans. Either bank does a good loan or does not do it at all. How come corporation can walk away from mortgage and assets of owners are protected?

]]> By: chartsandcoffee http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/comment-page-1/#comment-1201 chartsandcoffee Thu, 04 Feb 2010 19:10:47 +0000 http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/#comment-1201 William, I agree with you about the part of lenders duping Joe Blow. I've seen it with my own eyes when representing pro-bono clients in the past. <br><br>The thing is, if some of the changes I made were suggested, the lenders would not have the ability to create a product with a teaser rate, get a loan closed, and the borrower go into default in a matter of months. The 20% equity would get rid of a lot of these interest only products.<br><br>We could also get rid of negative amortization loans (ie., teaser rates). These loans serve no purpose. Subprime really has no reason to exist either. If you need a subprime loan to get a house, you should be renting. William, I agree with you about the part of lenders duping Joe Blow. I've seen it with my own eyes when representing pro-bono clients in the past.

The thing is, if some of the changes I made were suggested, the lenders would not have the ability to create a product with a teaser rate, get a loan closed, and the borrower go into default in a matter of months. The 20% equity would get rid of a lot of these interest only products.

We could also get rid of negative amortization loans (ie., teaser rates). These loans serve no purpose. Subprime really has no reason to exist either. If you need a subprime loan to get a house, you should be renting.

]]> By: chartsandcoffee http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/comment-page-1/#comment-1896 chartsandcoffee Thu, 04 Feb 2010 19:10:47 +0000 http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/#comment-1896 William, I agree with you about the part of lenders duping Joe Blow. I've seen it with my own eyes when representing pro-bono clients in the past. <br><br>The thing is, if some of the changes I made were suggested, the lenders would not have the ability to create a product with a teaser rate, get a loan closed, and the borrower go into default in a matter of months. The 20% equity would get rid of a lot of these interest only products.<br><br>We could also get rid of negative amortization loans (ie., teaser rates). These loans serve no purpose. Subprime really has no reason to exist either. If you need a subprime loan to get a house, you should be renting. William, I agree with you about the part of lenders duping Joe Blow. I've seen it with my own eyes when representing pro-bono clients in the past.

The thing is, if some of the changes I made were suggested, the lenders would not have the ability to create a product with a teaser rate, get a loan closed, and the borrower go into default in a matter of months. The 20% equity would get rid of a lot of these interest only products.

We could also get rid of negative amortization loans (ie., teaser rates). These loans serve no purpose. Subprime really has no reason to exist either. If you need a subprime loan to get a house, you should be renting.

]]> By: chartsandcoffee http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/comment-page-1/#comment-1200 chartsandcoffee Thu, 04 Feb 2010 13:10:47 +0000 http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/#comment-1200 William, I agree with you about the part of lenders duping Joe Blow. I've seen it with my own eyes when representing pro-bono clients in the past. <br><br>The thing is, if some of the changes I made were suggested, the lenders would not have the ability to create a product with a teaser rate, get a loan closed, and the borrower go into default in a matter of months. The 20% equity would get rid of a lot of these interest only products.<br><br>We could also get rid of negative amortization loans (ie., teaser rates). These loans serve no purpose. Subprime really has no reason to exist either. If you need a subprime loan to get a house, you should be renting. William, I agree with you about the part of lenders duping Joe Blow. I've seen it with my own eyes when representing pro-bono clients in the past.

The thing is, if some of the changes I made were suggested, the lenders would not have the ability to create a product with a teaser rate, get a loan closed, and the borrower go into default in a matter of months. The 20% equity would get rid of a lot of these interest only products.

We could also get rid of negative amortization loans (ie., teaser rates). These loans serve no purpose. Subprime really has no reason to exist either. If you need a subprime loan to get a house, you should be renting.

]]> By: Doctor Stock http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/comment-page-1/#comment-1894 Doctor Stock Thu, 04 Feb 2010 09:58:12 +0000 http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/#comment-1894 I Love the comment re: can't buy a TV, but can get a home... love it! I Love the comment re: can't buy a TV, but can get a home… love it!

]]> By: William http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/comment-page-1/#comment-1895 William Thu, 04 Feb 2010 08:28:32 +0000 http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/#comment-1895 Imagine Joe Blow wants a house. He goes to a lender that quotes him $1500.00 a month payment. Joe knows he can carry $1500.00 with his eyes closed. Besides this is how he has been taught to buy cars and other items on credit. Our public school system certainly never mentioned anything to the contrary, and the lender is a professional. We all know that professionals wouldn't lend money that was impossible to pay back. The trouble is that the varable interest rate has gone up and Joe's payment has now doubled or tripled. Maybe the professional mentioned something under his breath about variable interest but Joe didn't understand the full importance of what it meant. How likely would it be that the professional lender would loan Joe the money with full knowledge that in a year or two there would be no way on God's green earth that Joe could pay back that loan even if Joe worked two jobs and got a paper-route.<br><br>The lenders knew the loans were junk and that's why they sold as many of them as they could to hot-shot investors.<br><br>The truth is that the lenders SWINDLED Joe and CHEATED the investors and then walked away clean.<br><br>Instead of jailing these CRIMINALS our then President Bush bailed them out!<br><br>What a country! Imagine Joe Blow wants a house. He goes to a lender that quotes him $1500.00 a month payment. Joe knows he can carry $1500.00 with his eyes closed. Besides this is how he has been taught to buy cars and other items on credit. Our public school system certainly never mentioned anything to the contrary, and the lender is a professional. We all know that professionals wouldn't lend money that was impossible to pay back. The trouble is that the varable interest rate has gone up and Joe's payment has now doubled or tripled. Maybe the professional mentioned something under his breath about variable interest but Joe didn't understand the full importance of what it meant. How likely would it be that the professional lender would loan Joe the money with full knowledge that in a year or two there would be no way on God's green earth that Joe could pay back that loan even if Joe worked two jobs and got a paper-route.

The lenders knew the loans were junk and that's why they sold as many of them as they could to hot-shot investors.

The truth is that the lenders SWINDLED Joe and CHEATED the investors and then walked away clean.

Instead of jailing these CRIMINALS our then President Bush bailed them out!

What a country!

]]> By: Doctor Stock http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/comment-page-1/#comment-1199 Doctor Stock Thu, 04 Feb 2010 03:58:12 +0000 http://www.chartsandcoffee.com/2010/02/homeowners-walk-away/#comment-1199 I Love the comment re: can't buy a TV, but can get a home... love it! I Love the comment re: can't buy a TV, but can get a home… love it!

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