3 New Anti-Foreclosure Strategies

Here are three programs that are considered promising replacements for the government's Home Affordable Modification Program (HAMP), which has failed to stop foreclosures.

(1)  Fannie Mae and Freddie Mac would be encouraged to refinance loans for some 30 million borrowers with high-interest rate mortgages. The new mortgages would be folded into a new round of mortgage-backed securities issued by the government-sponsored finance firms.

(2)  The right-to-rent plan would offer delinquent borrowers an option of renting their foreclosed homes at a market rate for five years. At that point, owners turned renters would have another chance to buy their homes at market value. It's a compromise. Borrowers lose their homes, but lenders have to accept lower payments.

(3)  Mortgage cramdowns give a bankruptcy judge the right to consider all of a borrower's debts and create a solution that would force all interested parties, including holders of mortgage debt, to compromise.

Source: National Association of Realtors®
  • November 09 2010 - US
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Answers (6)

Profile picture for the_country_hick
What happened to the best strategy of all?

PAY YOUR DEBT!!!
  • November 09 2010
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Profile picture for Lady Chattel
Shouting "pay your debt" sounds much like "get a job" these days, the difficulty in that is that as a middle class serf I can't just snap my fingers and produce a job, much less a job that has given me raises that kept up with inflation such that the money I make today is enough to support an avg. home today. 

I don't have a lot of sympathy for borrowers who took on too much home and can't re-fi now that they are underwater and their subprime loan is popping on the ARM.  If a person is in a bind cause of job loss or reduction in income I have sympathy but I don't believe they deserve a bailout modification.  As a renter, no one is going to give me anything.  The only gov't handout I would get is the same food welfare that everyone else gets.   The only reason that banks, gov't, & REAs are pushing for these programs is to inflate home prices or keep them from falling further.  This is the biggest FAIL for Americans.  If a homeowner leaves a noose for a much cheaper rental they actually help the economy with the extra $ disposable income.  Banks aren't lending much at all, they make money in other endeavers by borrowing so little from the Fed, so by giving your money directly to the banks you stall the economy.   Let the McMansion or any noose go, walk away, go live cheaper and spend money on a new blouse, some fresh veggies to stay healthy, and gas in the car.
  • November 09 2010
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The problem is not the borrower who cannot pay his monthly mortgage.  The problem and massive fraud is the predatory practices of the lender that sucked these people into their web of deception.  Virtually ever loan is backed by mortgage insurance.  That insurance pays when the borrower cannot.  The insurers were buying the note as soon as it was closed - the lender paid in full - then selling.  In other cases the lender sold it paid in full to another investor.  All most all those were bundled in massive unidentifiable packages to foreign investors.  The note and deed of trust separated - note now null and void.  The note sold - note now null and void.  Investigating close to 1000 notes since the first of the year not a single note is clear of lender fraud.  Not a single transaction can have an unclouded title.  It was the lenders that screwed America - not the borrower.  Every closed short sale and foreclosure is an unauthorized, illegal transaction that is being passed on a new unsuspecting homeowner that can and will come back to bite the seller, agent, broker, title insurance, former lender. 
  • November 10 2010
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Profile picture for sunnyview
Please. You blame the predatory lending practices but never the borrower because you want the borrower to pay you for the dream your promise of getting them a house for free from the evil bank based on a technicaity. Your predatory finger pointing helps no one get justice, but it does help you get paid.

You say "Every closed short sale and foreclosure is an unauthorized, illegal transaction". So what? Every borrower that lied or fudged their loan application also committed a crime. No doubt this situation is bad, but you are a selling desperate people dreams and I am offended by that.

It is time for people to take responsibility for their part, understand their options and try to move forward smarter.
  • November 11 2010
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The biggest Loan Modification strategy and foreclosure prevention strategy is job creation.  Unfortunately, we are looking at the problem backwards in my oppinion. 

Create jobs instead of bailing out banks and trying to let people off the hook for not paying their mortgages.  Yes, I believe some people have been dealt some real bad luck and have lost jobs and homes.  But, many are just upside down, they paid more than the house is currently worth so they just stop paying and move on.  Seems like we have an entitlement society.
The bank owned homes I have listed are just ruined, left with garbage, in disrepair and filth.  If you own something you should take care of it...I just don't see it happening. 

Individuals took out the loans and the buck stops there...they signed the paperwork..were aware of the montly payments.  Now we are all paying for it with the bank bail outs. 

I say no more bail outs...let the foreclosures and short sales run there course so we can get back to a normal market.  Not inflated like it was...
no jobs, no one buys houses...


  • November 30 2010
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David:
I am a realtor, and was happy when this news came out, but i think that these programs like so many others might be overstepping the truths when they use terms like "force all parties."  Or the Right to Rent Program, gosh, I surely hate that Fannie is cutting into my business model.  I have had better renters in the last 24 months than the previous 5 years......UGH
  • December 28 2010
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