Even Terry Goddard gets it!!!

[CARLHAYDEN]

Terry Goddard is a knee-jerk (with the emphasis on jerk) libeal Democrat Attorney-General, but, even he gets it:

During a meeting about mortgage fraud held Thursday in Washington, D.C., two state attorneys general warned federal officials about the possible ramifications of looming resets for pay-option adjustable-rate mortgages (ARMs).

"Payment-option ARMs are about to explode," Iowa Attorney General Tom Miller said, according to a Reuters report.

Miller’s sentiments were shared by Arizona’s attorney general, Terry Goddard. In July, Goddard and six other attorneys general wrote to Treasury Secretary Tim Geithner and Department of Housing and Urban Development Secretary Shaun Donovan, recommending improvements to the Obama administration’s foreclosure prevention initiatives.

In the letter, Goddard said the “need for immediate change in the loan modification process is particularly acute at this time because a very large number of payment-option ARMs in Arizona is scheduled to reset in the near future.”

Goddard told Reuters after the meeting that 128,000 pay-option ARMs will reset in Arizona over the next year.

"It's the other shoe," he explained to Reuters. "I can't say it's waiting to drop. It's dropping now."
 
SOURCES: Reuters, Office of Arizona Attorney General Terry Goddard

[Small Business Owner of Any Repute]

Frankly, I'm not worried about ARM implosions anymore.  That's sorta what the federal bailout was for.

[CARLHAYDEN]

Frankly, I'm not worried about ARM implosions anymore.  That's sorta what the federal bailout was for.

I'm disgusted by so many people who seem to be recycling the George H. W. Bush theme song, "don't worry, be happy," and deluding themselves into believing everything will be just fine now that the Obamamessiah is socializing the country.

[Small Business Owner of Any Repute]

Frankly, I'm not worried about ARM implosions anymore.  That's sorta what the federal bailout was for.

I'm disgusted by so many people who seem to be recycling the George H. W. Bush theme song, "don't worry, be happy," and deluding themselves into believing everything will be just fine now that the Obamamessiah is socializing the country.

It really doesn't have much to do with Obama at all.  It has to do with my first-hand experience in dealing with the TARP program.

Whether or not you like the idea or not, the government is essentially twisting the arms of mortgage lenders (and a lot of these lenders, backed up with cash from the government and a guarantee that they won't be wiped off the face of the earth because of their own stupid past mistakes, are okay with having their arms twisted).

TARP allows people who are facing ARM resets or otherwise unmanagable payments due to job losses and circumstance changes to modify the terms of their mortgages to keep those loans from slipping into foreclosure.  The concept is that it's better to modify someone's interest rate from 7% to 3% than to force a foreclosure that will hurt the lender, the borrower, and the community where that home is located.

And really, that's all that's required with most these loans.  Adjusting the interest rate and extending the term to 40 years (a common fix to lower payments even more for TARP purposes) can cut some people's payments by the 30 or 40 percent that's needed to change a sure foreclosure into a sustainable loan.

I don't think the modifications will solve all the problems, but I do believe they're going to stem the tide of foreclosures.  The market, at least in my area, seems to be responding well to the plan.

[CARLHAYDEN]

Frankly, I'm not worried about ARM implosions anymore.  That's sorta what the federal bailout was for.

I'm disgusted by so many people who seem to be recycling the George H. W. Bush theme song, "don't worry, be happy," and deluding themselves into believing everything will be just fine now that the Obamamessiah is socializing the country.

It really doesn't have much to do with Obama at all.  It has to do with my first-hand experience in dealing with the TARP program.

Whether or not you like the idea or not, the government is essentially twisting the arms of mortgage lenders (and a lot of these lenders, backed up with cash from the government and a guarantee that they won't be wiped off the face of the earth because of their own stupid past mistakes, are okay with having their arms twisted).

TARP allows people who are facing ARM resets or otherwise unmanagable payments due to job losses and circumstance changes to modify the terms of their mortgages to keep those loans from slipping into foreclosure.  The concept is that it's better to modify someone's interest rate from 7% to 3% than to force a foreclosure that will hurt the lender, the borrower, and the community where that home is located.

And really, that's all that's required with most these loans.  Adjusting the interest rate and extending the term to 40 years (a common fix to lower payments even more for TARP purposes) can cut some people's payments by the 30 or 40 percent that's needed to change a sure foreclosure into a sustainable loan.

I don't think the modifications will solve all the problems, but I do believe they're going to stem the tide of foreclosures.  The market, at least in my area, seems to be responding well to the plan.

Sorry, but studies indicate that the allegations that defaults on home loans are primarily tied to adverse changes in the financial circumstances of the people taking out the mortgages is simply false! 

You are however correct that a lot of the problem is the incredibible stupidity of the financial institutions that made many of the home loans.

However, for a number of reasons, the interest rate reductions are NOT legally viable (and the real problem is that the value of the property upon which the mortgage is set is a lot less in the real world than the mortage indicates).

Oh, and you seem to have misunderstood my comment re Obama.

He is not responsible for the problem (although his policies have made things worse).  The problem is the morons who believe that the Obamamessiah will solve all problems.