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I don't claim to understand a lot of this, but I know if the principle of my home was altered to current market value & mortgage payment was made to match(looki

by smtddr 13y ago

I don't claim to understand a lot of this, but I know if the principle of my home was altered to current market value & mortgage payment was made to match(looking at zillow.com's numbers) I'd be paying 1k/month less. That would be life-changing for my family. I wish someone would come seize my mortgage. That being said, I don't fully understand who's getting negatively impacted by me not paying so I await replies to my comment to enlighten me.

chiph 13y ago
The investors who bought the bundled mortgages would be harmed. After all, if your mortgage was $300k and under this forced refinancing scheme it's now mortgaged at $200k, that $100k just didn't vanish - someone lost that money. It might have been divided up amongst 1500 small investors, or it might have been a handful of larger investors, the net result is the same -- someone is out that money. On the larger stage, the City of Richmond is cutting their own throat by doing this. It's doubtful that I'd ever buy any of their municipal bonds after this. If I were somehow persuaded to (fat chance), it'd cost them a much higher rate - something like what Detroit is paying.
- cinquemb 13y ago
  >It's doubtful that I'd ever buy any of their municipal bonds after this Funny thing is, people probably own their munibonds and don't even know it.
- smtddr 13y ago
  Ah, okay. Then it depends on how I feel about the investors taking the hit. I imagine(incorrectly?) the investors as a group of wealthy people that won't suffer a huge decrease in quality-of-life by taking the hit but all the "regular" people in underwater mortgages would have significant gain in quality-of-life by the freed financial resources. This is me thinking that for a lot of people about 40% to 50% of their income goes to mortgage payments. The other problem though, is that wealthy people always seem to have a way of passing the damage down to the working class.
  - cinquemb 13y ago
    More than likely, investors in these cases are probably mostly compromised of 401k's and such. Small institutional folks (group of wealthy) who have been looking at the financials of some bond markets closely are probably getting out of risky areas like these…
  - smsm42 13y ago
    Investors are probably a group of middleman that are managing money for pension funds, municipal funds, endowments, and such. Of course, if you take 100K out of billion-size pension fund, that alone wouldn't do much difference. That alone happening on scale means some pension funds would be in deficit, which means somebody who joins the workforce now would have to pay much more for their pension than before (since it is almost impossible to change conditions in an existing pension plan if unions are involved) or somebody's taxes would be raised, or somebody's tuition would go up. >>> The other problem though, is that wealthy people always seem to have a way of passing the damage down to the working class. There's no such thing as "wealthy people vs. working class", if they ever were. Look up how much money largest unions manage, how big are largest pension funds, how big are all pension funds combined. We're talking trillions here. Of course, there are some very rich people, but thinking that messing with economy you're only influencing those rich top-hat wearing monocle-donning monopoly men is completely wrong. Everything is connected, and "working class" is as interested in good investment climate as the wealthiest of the wealthy. Maybe even more - if Bill Gates loses 50% of his money, he'd be ok. If your average Joe's pension fund loses 50%, he's screwed.
  - chiph 13y ago
    Uhh, I'm probably one of those "wealthy" investors, via my 401k retirement savings. I assure you, I'm not in the 1%. Please don't default. > 40 to 50% That would be very unusual in most of the US, as the lenders typically want a 28/36 front-end/back-end ratios. Obviously, during the bubble things were a little ... looser.
  - refurb 13y ago
    You're not following the impact to the end. The problem with this is that a person makes an investment with a known risk profile. That needs to be known in order to just the worthiness of the investment: the higher the risk, the higher the return needs to be. When someone comes in and changes the rules, that messes up everything. Suddenly those safe mortgage investments that you felt were a good investment at a 5% return become absolutely shit because you run the risk of taking a huge loss. What is the impact? All those people that bought up the mortgages a while back now want another 5% in return to offset the risk of having the mortgages suddenly lose value. Who loses? Homeowners because now you can only find mortgages at 10%, not 5%.
- deleted 13y ago
  [deleted]

by smtddr 13y ago

chiph 13y ago

The investors who bought the bundled mortgages would be harmed. After all, if your mortgage was $300k and under this forced refinancing scheme it's now mortgaged at $200k, that $100k just didn't vanish - someone lost that money. It might have been divided up amongst 1500 small investors, or it might have been a handful of larger investors, the net result is the same -- someone is out that money. On the larger stage, the City of Richmond is cutting their own throat by doing this. It's doubtful that I'd ever buy any of their municipal bonds after this. If I were somehow persuaded to (fat chance), it'd cost them a much higher rate - something like what Detroit is paying.

cinquemb 13y ago
>It's doubtful that I'd ever buy any of their municipal bonds after this Funny thing is, people probably own their munibonds and don't even know it.
smtddr 13y ago
Ah, okay. Then it depends on how I feel about the investors taking the hit. I imagine(incorrectly?) the investors as a group of wealthy people that won't suffer a huge decrease in quality-of-life by taking the hit but all the "regular" people in underwater mortgages would have significant gain in quality-of-life by the freed financial resources. This is me thinking that for a lot of people about 40% to 50% of their income goes to mortgage payments. The other problem though, is that wealthy people always seem to have a way of passing the damage down to the working class.
- cinquemb 13y ago
  More than likely, investors in these cases are probably mostly compromised of 401k's and such. Small institutional folks (group of wealthy) who have been looking at the financials of some bond markets closely are probably getting out of risky areas like these…
- smsm42 13y ago
  Investors are probably a group of middleman that are managing money for pension funds, municipal funds, endowments, and such. Of course, if you take 100K out of billion-size pension fund, that alone wouldn't do much difference. That alone happening on scale means some pension funds would be in deficit, which means somebody who joins the workforce now would have to pay much more for their pension than before (since it is almost impossible to change conditions in an existing pension plan if unions are involved) or somebody's taxes would be raised, or somebody's tuition would go up. >>> The other problem though, is that wealthy people always seem to have a way of passing the damage down to the working class. There's no such thing as "wealthy people vs. working class", if they ever were. Look up how much money largest unions manage, how big are largest pension funds, how big are all pension funds combined. We're talking trillions here. Of course, there are some very rich people, but thinking that messing with economy you're only influencing those rich top-hat wearing monocle-donning monopoly men is completely wrong. Everything is connected, and "working class" is as interested in good investment climate as the wealthiest of the wealthy. Maybe even more - if Bill Gates loses 50% of his money, he'd be ok. If your average Joe's pension fund loses 50%, he's screwed.
- chiph 13y ago
  Uhh, I'm probably one of those "wealthy" investors, via my 401k retirement savings. I assure you, I'm not in the 1%. Please don't default. > 40 to 50% That would be very unusual in most of the US, as the lenders typically want a 28/36 front-end/back-end ratios. Obviously, during the bubble things were a little ... looser.
- refurb 13y ago
  You're not following the impact to the end. The problem with this is that a person makes an investment with a known risk profile. That needs to be known in order to just the worthiness of the investment: the higher the risk, the higher the return needs to be. When someone comes in and changes the rules, that messes up everything. Suddenly those safe mortgage investments that you felt were a good investment at a 5% return become absolutely shit because you run the risk of taking a huge loss. What is the impact? All those people that bought up the mortgages a while back now want another 5% in return to offset the risk of having the mortgages suddenly lose value. Who loses? Homeowners because now you can only find mortgages at 10%, not 5%.
deleted 13y ago
[deleted]