Comments on: Fed Research Sheds Light On Reluctance Of Subprime Lenders To Modify Loans

By: Frank Polenose

Frank Polenose — Tue, 26 May 2009 16:37:15 +0000

I do like the idea from Al of Real Estate Raffles. Great thought!

By: Lannes

Lannes — Sun, 22 Feb 2009 17:12:30 +0000

Your argument would hold water if the banks were not getting help.
Leaving the situation “as is” and pretending that banks are now being smart is giving the systemic cancer that got us there in the place profitable in the long run, therefore, why not do it again?
After all, the losers will always be at the bottom of the chain, and banks will simply have to ask for temporary help from the federal reserve.

By: Al

Al — Mon, 19 Jan 2009 20:21:58 +0000

I actually have a solution which actually could really help MANY people out. If more states would allow Real Estate Raffles for charity to exist legally then everyone could benefit involved. The bank would get the loan paid, the home owner would sell the house for market value and a charity would bring in revenue for their cause. The idea really works. You can find out more information here at http://reraffle.com

Al’s last blog post: Tips for Refinancing your Mortgage

By: Prof. Samuel D. Bornstein

Prof. Samuel D. Bornstein — Sun, 18 Jan 2009 19:25:49 +0000

Everyone admits that the core of the problem are the “Troubled Assets” or the so-called “Toxic” Mortgages. The key to a solution to this Economic Crisis is the Borrower’s ability to make the monthly mortgage payment.

This reminds me of a quote from Winston Churchill in 1943…”Never before have so many owed so much to so few”.

The simple fact is that the underlying assets of the Mortgage Backed Securities and other related investments are the “Toxic” Mortgages.
Everyone is betting that the Borrower will default and that foreclosure will follow. The key to increasing the valuations of these securities is the Borrower’s ability to avoid default.
The Borrower’s track record is poor. Note that after loan modification, the Re-Default rate is 60% within 6 months!

The Borrower’s failure is to be expected. After all, the borrower has no “understanding” to make informed financial decisions. He is like a “boat without a paddle”. How can he deal with his complex financial environment? He is like a “Prehistoric Man” in a “21st Century body”.

No Loan Modifications or Bailouts will work unless we address the cause of our great financial crisis…The Borrower has no concept of managing his/her money.

Bailout will not work. It is similar to taking a “drug” for an illness. Sometimes the “side-effects” are worse than the disease. Sometimes proper “diet and exercise” will cure the disease without complications. That is precisely what we need now. A “natural” cure, not a “drug”.

We are “up against the gun”. There is not much time to embark on a so-called program of Financial Literacy, which has been proven to be a complete failure. The Gov’t has spent millions on these Financial Literacy initiatives that simply disseminates “information”. What is needed is an initiative to help the borrower “understand” how to manage money and avoid the pitfalls that have previously caused financial distress.

The solution is a program of “Immediate and Specific Financial Guidance” that will help the borrower “naturally” be able to make the monthly payment, without “bailout” or extensive loan mods which have proven to be a failure.

Prof. Samuel D. Bornstein
Bornsteinsong@aol.com

By: Top 10 Smart Markets To Purchase A home In For 2009 : The Real Estate Bloggers

Top 10 Smart Markets To Purchase A home In For 2009 : The Real Estate Bloggers — Sat, 17 Jan 2009 17:14:53 +0000

[...] that is the best answer. Do nothing and let the real estate market absorb all the foreclose homes at depressed prices. This will eventually mean a bottom in [...]