Government to pressure lenders to cut principals on some mortgages

www.kansascity.com...

U.S. Housing and Urban Development Secretary Shaun Donovan said Wednesday the government was pressuring some banks to help struggling homeowners by reducing the principal balances on their mortgages.

“One of the key things we can do … is to get (banks) to start writing down principal on loans so that folks have a light at the end of the tunnel,” Donovan told the editorial board of The Kansas City Star. “They can actually get back above water and start building equity again.”

Donovan said he was trying to persuade some lenders to write down some loan balances “on a significant scale.”

Details of the proposal were not clear. If approved, however, it probably would not apply to all mortgage payers. Instead, it would involve borrowers from banks accused of improper lending and foreclosure practices

Read more: www.kansascity.com...

Okay, cool! NOW we're getting somewhere.
I'm not sure if my mortgage would be eligible or not...it's held by Chase, who bought it from what I realize in retrospect was probably a subprime bundler. I was able at the time to afford the payments, though, and have not been late even once (6 years now).

But I did not aree to Chase buying it. And after they bought it, they ruined my credit rating by refusing to go after my deadbeat ex who defaulted on the huge cc debt the judge ordered him to pay.

I've told this story here before, sorry to be redundant, but it just really chaps my cheeks. I faxed them ALL of the court docs releasing me from responsibiility. They flat out said "we don't care". I said "I will NOT pay you what he owes. I sent you the docs. I can give you his phone number and address."
They said "nope, we don't care."
I said "I don't owe this, he does, and the judge ordered it. Why don't you take him to court? You have lawyers"
And they said "Nope! We don't care. We're coming after you."

And then put a damning charge-off on my credit, which prior to that had been in the mid 700s.

So now I don't have a good enough score to refi (thanks to THEM), and also don't have a steady job to document my ability to pay.
Which means we will have to continue to use up our savings. And that because of our income problems we wouldn't "qualify" for this brilliant "principal reduction program." I have no doubt that Jamie DEmon will whine and cry and stamp his foot about it, and then give himself a big bonus.

What I want is for them to say "Okay, you've paid off the principal. The home is now yours. We will eat the interest you would have paid beyond the $20,000 you've already paid (in interest). We will apply ALL of your payments to the PRINCIPAL, retroactively, because since WE get to borrow money at 0%, so should our clients.
So, thanks much for playing. Let's just call it even. Kay?"

And I'd say "Screw you very much. Kay. Deal. Now get the hell off of my property."

A guy and his family moved from the city to podunk America, small rural town and bought a house next to my dad for $30,000. They took out a $160,000 mortgage and have been living on the extra $130,000 for many years. They never had jobs. Now that they've blown the $130,000 they are trying to sell the house for a profit to move on to the next.



And they want to write down his "principal" on his loan? The house is still only worth $30,000.

reply to post by Pervius


Yes, those are the people who are exploiting the system, and who the underwriters gave loans to. It's disgusting.

In my case, I had a job, had just gone through a divorce, and could AFFORD the mortgage. I didn't borrow more than I needed. I simply refinanced my home to get my ex off of the paperwork (like he was supposed to do and DIDn't...we owned two homes at the time. One we rented out to a friend, the other we lived in because it had acreage and our horses were there with us. My ex allowed that one to default, which ALSO slammed MY credit score.)

My ex is one of those who just "walks away", who just lets bills pile up and mooches off of others. A true sociopath slacker.

Sadly, they are EVERYWHERE. Perhaps a psychological test of some kind should be administered, and a background check to expose chronic users and moochers, before they "reduce principal".

It's the hardworking people who WERE able to make their payments, who took out sensible loans with every intention of paying, and then LOST their jobs to outsourcing and downsizing...THEY (we) are the ones who are suffering. We are not deadbeats. We are SOL.