Second Liens Forgiven: Are You Kidding Me?

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grl's picture
grl
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Second Liens Forgiven: Are You Kidding Me?

Back to Chris's "Obama Punishes the Responsible" post. How about this little hidden gem?

Deep deep in the pages of the [mortgage modification] plan, is paragraph vi. Second Liens: While eligibly loan modifications will not require any participation by second lien holders, the program will include additional incentives to extinguish second liens on loans modified under the program in order to reduce the overall indebtedness of the borrower and improve loan performance. Servicers will be eligible to receive compensation when they contact second lien holders and extinguish valid junior liens. Servicers will be reimbursed for the release according to the specified schedule, and will also receive an extra $250 for obtaining a release of a valid second lien.

http://www.cnbc.com/id/29513414

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Re: Second Liens Forgiven: Are You Kidding Me?

I just saw that gem as well!

Must have slipped through the cracks:

http://www.recovery.gov/?q=content/accountability-and-transparency

Quote:

"We cannot overstate the importance of this effort. We are asking the American people to trust their government with an unprecedented level of funding to address the economic emergency. In return, we must prove to them that their dollars are being invested in initiatives and strategies that make a difference in their communities and across the country. Following through on our commitments for accountability and openness will create a foundation upon which we can build as we continue to tackle the economic crisis and the many other challenges facing our nation."

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Re: Second Liens Forgiven: Are You Kidding Me?

Lisa,

That's a great link. Thanks for finding that.

Forgive me, but I've taken the liberty of posting the whole article here because I think it's important for people to read the whole thing in context and some folks don't always follow the link.

It also reinforces my comments in the "Get out of Debt! Bad advice?" thread. The part I've highlighted below (bold/underline) definitely struck a nerve with me!

 

Second Liens Forgiven: Are You Kidding Me?
Posted By: Diana Olick

Amid
the dozens of pages of details of the Obama mortgage modification plan,
one new element will likely not make it into the headlines because it’s
something of an afterthought.

It has to do with second liens, that is piggy back loans or home equity lines of credit.

Deep deep in the pages of the plan, is paragraph vi. Second Liens: While
eligibly loan modifications will not require any participation by
second lien holders, the program will include additional incentives to
extinguish second liens on loans modified under the program in order to
reduce the overall indebtedness of the borrower and improve loan
performance. Servicers will be eligible to receive compensation when
they contact second lien holders and extinguish valid junior liens.
Servicers will be reimbursed for the release according to the specified
schedule, and will also receive an extra $250 for obtaining a release
of a valid second lien.

So
in an effort to help borrowers stay current on their newly modified
loan, which is at a nice new 31% debt to income ratio, the government
is also going to pay cash money to get servicers to totally wipe out
second liens. When I heard this I thought there might have been
something funky in my morning muffin.

It’s
not that I don’t get the reasoning. Sure, do all you can to help people
pay their mortgage, like get rid of other debt. By why stop there? What
about car loans? Student loans?? The second liens, in general, were
used by borrowers to either buy more home than they could really afford
or to use their homes as ATM machines. Yes, some people use home equity
lines of credit to pay college tuition.

But I can’t tell you how many homeowners I’ve interviewed (and just take a look at David Faber’s documentary House of Cards to see more)
who took out home equity lines to put in a pool or buy a fancy car or
put an addition on the house that includes a fancy new kitchen with a
Viking six-burner. And I’m supposed to pay for all that?

It’s
one thing to suck up the bitter pill in order to save the greater
housing market and keep families in their homes, but using taxpayer
dollars to give homeowners a free ride on second liens is preposterous.
The Obama administration talks a good long line about helping
“responsible borrowers.” Second liens can certainly be responsible, but
there’s a much much much greyer area in these loans when it comes to
actual “need”, and many many people used them irresponsibly.

In
fact, if Americans hadn’t taken quite so much money out of their homes
during the housing boom, we wouldn’t be in quite the underwater mess
we’re in right now.

© 2009 CNBC, Inc. All Rights Reserved
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Re: Second Liens Forgiven: Are You Kidding Me?

The institution I work for has already said they will not be apart of this plan. They will only assist with the first mortgage. The bank will make more than 250 dollars if they continue to collect or charge off the home equity line. They can also foreclose on the second mortgage.

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Re: Second Liens Forgiven: Are You Kidding Me?

This is absolutely crazy. I can't believe that rational people will stand for this.

 

Makes me want to PUKE.

 

Ken

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Re: Second Liens Forgiven: Are You Kidding Me?
lundsta wrote:

The institution I work for has already said they will not be apart of this plan. They will only assist with the first mortgage. The bank will make more than 250 dollars if they continue to collect or charge off the home equity line. They can also foreclose on the second mortgage.

lundsta,

I saw on MSM tonight that all banks who accept federal bailout money will be required to participate. Does that also apply to your institution?

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Re: Second Liens Forgiven: Are You Kidding Me?

I had heard that as well. The government must have a different definition for "required" than I do. About 4 weeks ago we had heard in our Home Equity Loss Prevention department that we would participate. However, since then the bank has found ways to go around it. I have seen a few ways. 1) If the account is investor owned then all parties involved are supposed to come up with a solution 2) If the bank can "prove" the borrower is still at high risk of default. 

I am in the heat of it all, but I hate how they keep creating false hope. And yes Wells Fargo has received bailout funds and is also deemed "too big to fail". 

The bottom line is I have not seen Home Equity accounts being forgiven, and they are making no plans to start. 

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Re: Second Liens Forgiven: Are You Kidding Me?
kenc wrote:

This is absolutely crazy. I can't believe that rational people will stand for this.

 

Makes me want to PUKE.

 

Ken

I know... me too!

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Re: Second Liens Forgiven: Are You Kidding Me?
lundsta wrote:

I had heard that as well. The government must have a different definition for "required" than I do. About 4 weeks ago we had heard in our Home Equity Loss Prevention department that we would participate. However, since then the bank has found ways to go around it. I have seen a few ways. 1) If the account is investor owned then all parties involved are supposed to come up with a solution 2) If the bank can "prove" the borrower is still at high risk of default. 

I am in the heat of it all, but I hate how they keep creating false hope. And yes Wells Fargo has received bailout funds and is also deemed "too big to fail". 

The bottom line is I have not seen Home Equity accounts being forgiven, and they are making no plans to start. 

This whole thing is insane. I keep shaking my head in amazement but I'm going to have to stop.

I've been shaking it so much lately that it's going to fall off! Tongue out

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Re: Second Liens Forgiven: Are You Kidding Me?

Oh Baby,

How do I sign up? The Gov't is going to forgive my HELOC? It don't get any better than that. If you don't get on the bus, you usually end up under it. They will rue the day they came up with this plan, and as a tax paying citizen who will soon be taxed even more next year, I'd be a fool not to take advantage of their misguided genorosity.

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Re: Second Liens Forgiven: Are You Kidding Me?

lundsta:

Quote:

I had heard that as well. The government must have a different
definition for "required" than I do. About 4 weeks ago we had heard in
our Home Equity Loss Prevention department that we would participate.
However, since then the bank has found ways to go around it. I have
seen a few ways. 1) If the account is investor owned then all parties
involved are supposed to come up with a solution 2) If the bank can
"prove" the borrower is still at high risk of default. 

I am in the heat of it all, but I hate how they keep creating false
hope. And yes Wells Fargo has received bailout funds and is also deemed
"too big to fail". 

The bottom line is I have not seen Home Equity accounts being forgiven, and they are making no plans to start. 

Ok so lets get this straight...

According to the terms of the hand out secondary liens are required to be forgiven (in client insolvency situations) and I expect that many banks have signed on for the bail out. Now they're trying to figure out ways to get around the terms that require them to drop secondary liens in default situations?

Can you say having your cake and eating it?

I don't agree with the bail out period, if the financial companies have got themselves into a situation where they're insolvent, then like everyone else they should put up or face bankruptcy and yes Sam I am one of those considering walking out of my mortgage, and I think this justifies it further. The banking institutions have been directly raping the American people for years (by mezzanine CDO's, Tax Breaks, BBB and lower rated tranches that were deliberately laundered to AAA for 401k, IRA and risk averse investment plundering), now they're doing it by proxy of the Federal Government.

(Link for laundering http://www.nytimes.com/2008/12/10/business/10fannie.html?_r=2&ref=business )

Our government have seen fit to hock the next 2-3 generations to provide support, and from what I read the banks are still trying to screw people who owe them money, and the government. If I'm reading this right, then this is exactly the type of behavior that generated this whole mess in the first place, robbing Peter, robbing Paul, then flipping them the bird while they count their take.

 

 

 

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Re: Second Liens Forgiven: Are You Kidding Me?

... and yes Sam I am one of those considering walking out of my mortgage, and I think this justifies it further.

For what it's worth, Gungnir, I'm quite sympathetic to your point of view. It dismays me no end to see what's happening around us. If the entire system collapses, then I will feel no further need to pay a mortgage to a dead bank. However, currently the system remains intact and so do the penalties.

Ethics aside, if I default right now, my credit rating will go down the tubes and I may find myself looking for a place to live in short order. I spent my life building that credit rating - my FICO is over 820. To casually toss that aside without knowing what the future really holds would be a fools errand.

Back to ethics - if I default, I might as well toss my ethics out the window as well. Then where does that leave me?

If one is still able to pay on their debts, I would still expect them to do so - regardless of what the financial system is up to.

But, that's me - I'm enough of a realist to know that each one of you will do what is best for you and yours.

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Re: Second Liens Forgiven: Are You Kidding Me?

Thanks Sam, I really appreciate your ethics, and I also appreciate that you're not doing unto others as they have done unto you.

I don't feel I'm as forgiving :)  nor perhaps as idealistic. It dismays me that under terms of the Federal Government, the major banking players are attempting to interpret the language so that they can have their cake and eat it. I'm beginning to sympathize with an event that allegedly occurred in the temple in Jerusalem about 2009 years ago, when Jesus went Booyeah on the money lenders, and I'm not even a Christian.

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Re: Second Liens Forgiven: Are You Kidding Me?
Gungnir wrote:

Thanks Sam, I really appreciate your ethics, and I also appreciate that you're not doing unto others as they have done unto you.

I don't feel I'm as forgiving :)  nor perhaps as idealistic. It dismays me that under terms of the Federal Government, the major banking players are attempting to interpret the language so that they can have their cake and eat it. I'm beginning to sympathize with an event that allegedly occurred in the temple in Jerusalem about 2009 years ago, when Jesus went Booyeah on the money lenders, and I'm not even a Christian.

Gungnir,

I cracked up reading your last sentence - priceless!

I've got a sense (which may not be entirely accurate) that part of my "ethics" problem is a generational thing. It appears that the younger generations (20 - 40 give or take) are more aware of the games that have been played by TPTB and are more willing to do unto them as they have been done unto (if you'll pardon my fractured english!).

Looking at it realistically, I can understand that thinking. In fact, the more I watch the news and read the newspaper and follow the on-line blogs, the more I find myself in basic agreement with people who decide, "I've had enough and I'm not going to take it anymore!"

I don't know how long I can maintain my standards - but the downside is worse than the upside right now.

Like the saying goes, "Stay tuned!"

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Re: Second Liens Forgiven: Are You Kidding Me?
SamLinder wrote:
Gungnir wrote:

Thanks Sam, I really appreciate your ethics, and I also appreciate that you're not doing unto others as they have done unto you.

I don't feel I'm as forgiving :)  nor perhaps as idealistic. It dismays me that under terms of the Federal Government, the major banking players are attempting to interpret the language so that they can have their cake and eat it. I'm beginning to sympathize with an event that allegedly occurred in the temple in Jerusalem about 2009 years ago, when Jesus went Booyeah on the money lenders, and I'm not even a Christian.

Gungnir,

I cracked up reading your last sentence - priceless!

I've got a sense (which may not be entirely accurate) that part of my "ethics" problem is a generational thing. It appears that the younger generations (20 - 40 give or take) are more aware of the games that have been played by TPTB and are more willing to do unto them as they have been done unto (if you'll pardon my fractured english!).

Looking at it realistically, I can understand that thinking. In fact, the more I watch the news and read the newspaper and follow the on-line blogs, the more I find myself in basic agreement with people who decide, "I've had enough and I'm not going to take it anymore!"

I don't know how long I can maintain my standards - but the downside is worse than the upside right now.

Like the saying goes, "Stay tuned!"

Oh no Sam, are we going to have to give you an "Honorary GenX" membership now? Laughing

I do agree that this probably is a generational thing... most X-ers have spent their whole life (please forgive my vulgarity!) getting shafted with no lube, no foreplay, and not even a reach-around or kiss goodnight. I can't speak for the Y-ers or new generation of Digi-Kids; but as an X-er I've been very aware (since my teens) that something is very wrong with our system and "the Man" was not been playing fairly by the rules. We didn't really have an idyllic period that we can look back on fondly... perhaps that's why we're so malcontent and more ready to fight fire with fire rather than turn the other cheek.

But - to the point of this thread. If a bank accepts a bailout, and the condition of the bailout states they have to forgive the loans they have in holding... then that's exactly what they should be forced to do, because, essentially, they've received that payment through tax dollars and shouldn't be allowed to collect again from tax payers. (Note that I'm not pro or anti-bailout, just stating the "rules").

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Re: Second Liens Forgiven: Are You Kidding Me?

I'm going to be the punching bag again... as a responsible borrower who had to take out a HELOC to replace all the plumbing and electrical in my house because the city/county mandated that everything be brought up to code because we had to crack a wall to repair a leak. (yes, I know other people unscrupulously used 2nds for "stuff" but to assume that we all did is just plain wrong and unfair).

My 2nd lender (yes, that same lender who was going to get screwed if I defaulted or walked away) has, I believe, signed up for this stimulus bailout. Miraculously, if my HELOC was forgiven, like the "rules" of the package stipulate, then my house would barely be underwater even though it's taken almost 30% value hit recently. My primary lender would be in hog heaven, because I could give them back the house (Deed In Lieu of Foreclosure) and they would make a profit when they resold for any amount.  Heck, I might even be able to sell my house without taking too much of a loss.

I wonder how many other responsible borrowers would find themselves in a much better financial position (i.e. not insolvent on their homes) if their 2nds, HELs and HELOCs were forgiven in this manner. Remember, those people pay taxes, too... it's not all coming out of your pocket.  I'm sure that my tax dollars paid/will pay for something that benefits you and not me somewhere along the road... just think about it.

We all talk about "community" here, but then balk at what is a community-based solution to a very real problem that could affect us all (massive drop in property values and defaults/foreclosures/homelessness). Doesn't exactly make sense in that light, does it?

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Re: Second Liens Forgiven: Are You Kidding Me?

This entire financial bailout, subsequent stimulus, subsequent tarp stuff is a gigantic slap in the face to those of us that aren't in any threat of foreclosure or in a default situation.

I honestly have lost faith in my country completely and totally.  I have done everything right, have a stable job, a great credit score, and have never been late on any payment of anything.

What do I get for playing by the rules, and not being part of this ridiculous problem???? Nothing???? Such a waste to those of us who see it for what it is.  When will our government wake up and quit getting bitch slapped by financial institutions?????  I'm afraid for my children and their children.  They will grow up and spend the majority of their adult lives in a society that is coming to a realization.  That will be tough for them and will cause much unneeded strain.

The United States of America has become a rogue nation in my opinion.  As rogue as it gets.

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Re: Second Liens Forgiven: Are You Kidding Me?

Sam,

I'm please you liked my humor

Firstly let me say that I think it's a sad day when
ethics/morals and paths are being subverted, due to a sense on
unfairness inherent in the system. I'd like to take a moment to apologize for my
generation, since I strongly suspect that it's my generation the 20-40
year olds that have driven this credit crisis to this point (we were raised on Gordon Gekko, and Junk Bonds), a lot of
the idea's that have been developed in CDO's the laundering of mortgage
tranches to specifically grab investment from low risk investment funds, etc. have probably come from my generation directly, I wasn't there and I wasn't involved, but I can understand the problem solving behavior that would lead to those concepts.

I
think I have minimal pause because of a double standard, an institution
expects that customers abide by the spirit of the law, however that
institution holds itself accountable to the letter of the law. Now to
my ethics, since the institutions only hold themselves accountable to
the letter of the law, then I'll play their game, and hold myself
accountable to that same standard. If however I owed you that money,
then would feel a great responsibility to you to repay that debt,

I
believe in responsible responsibility. Which means that if I have a
degree of control on the outcome of a situation then I have a
responsibility to try to achieve that outcome to the advantage of as
many parties as are involved in that outcome (ideally all), with some
caveats; those being unless previous decisions have been made by those
parties that did not reflect the same ethic, for instance worst case
where that party made a conscious decision to gain a higher profit at
the expense of all other parties involved.

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SamLinder
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Re: Second Liens Forgiven: Are You Kidding Me?
PlicketyCat wrote:
SamLinder wrote:
Gungnir wrote:

Thanks Sam, I really appreciate your ethics, and I also appreciate that you're not doing unto others as they have done unto you.

I don't feel I'm as forgiving :)  nor perhaps as idealistic. It dismays me that under terms of the Federal Government, the major banking players are attempting to interpret the language so that they can have their cake and eat it. I'm beginning to sympathize with an event that allegedly occurred in the temple in Jerusalem about 2009 years ago, when Jesus went Booyeah on the money lenders, and I'm not even a Christian.

Gungnir,

I cracked up reading your last sentence - priceless!

I've got a sense (which may not be entirely accurate) that part of my "ethics" problem is a generational thing. It appears that the younger generations (20 - 40 give or take) are more aware of the games that have been played by TPTB and are more willing to do unto them as they have been done unto (if you'll pardon my fractured english!).

Looking at it realistically, I can understand that thinking. In fact, the more I watch the news and read the newspaper and follow the on-line blogs, the more I find myself in basic agreement with people who decide, "I've had enough and I'm not going to take it anymore!"

I don't know how long I can maintain my standards - but the downside is worse than the upside right now.

Like the saying goes, "Stay tuned!"

Oh no Sam, are we going to have to give you an "Honorary GenX" membership now? Laughing

If it will help me live longer, I'll take it!  Wink

PlicketyCat wrote:

I do agree that this probably is a generational thing... most X-ers have spent their whole life (please forgive my vulgarity!) getting shafted with no lube, no foreplay, and not even a reach-around or kiss goodnight. I can't speak for the Y-ers or new generation of Digi-Kids; but as an X-er I've been very aware (since my teens) that something is very wrong with our system and "the Man" was not been playing fairly by the rules. We didn't really have an idyllic period that we can look back on fondly... perhaps that's why we're so malcontent and more ready to fight fire with fire rather than turn the other cheek.

But - to the point of this thread. If a bank accepts a bailout, and the condition of the bailout states they have to forgive the loans they have in holding... then that's exactly what they should be forced to do, because, essentially, they've received that payment through tax dollars and shouldn't be allowed to collect again from tax payers. (Note that I'm not pro or anti-bailout, just stating the "rules").

I have an ex son-in-law who used to say, "There are two kinds of people in this world. The screwers and the screwees. I don't intend to be one of the screwees."

While his choice of words made me blanch slightly, I understood where he was coming from. I might have put it a little more tactfully if I'd been talking to my father-in-law. Undecided  However, watching the mayhem spinning around me, I can certainly understand anyone's determination not to be "the screwee."

OK, PlicketyCat. You got me with this one - I know Gen-x and Gen-Y but who are the "Digi-Kids"?

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Re: Second Liens Forgiven: Are You Kidding Me?
PlicketyCat wrote:

I'm going to be the punching bag again... as a responsible borrower who had to take out a HELOC to replace all the plumbing and electrical in my house because the city/county mandated that everything be brought up to code because we had to crack a wall to repair a leak. (yes, I know other people unscrupulously used 2nds for "stuff" but to assume that we all did is just plain wrong and unfair).

My 2nd lender (yes, that same lender who was going to get screwed if I defaulted or walked away) has, I believe, signed up for this stimulus bailout. Miraculously, if my HELOC was forgiven, like the "rules" of the package stipulate, then my house would barely be underwater even though it's taken almost 30% value hit recently. My primary lender would be in hog heaven, because I could give them back the house (Deed In Lieu of Foreclosure) and they would make a profit when they resold for any amount.  Heck, I might even be able to sell my house without taking too much of a loss.

I wonder how many other responsible borrowers would find themselves in a much better financial position (i.e. not insolvent on their homes) if their 2nds, HELs and HELOCs were forgiven in this manner. Remember, those people pay taxes, too... it's not all coming out of your pocket.  I'm sure that my tax dollars paid/will pay for something that benefits you and not me somewhere along the road... just think about it.

We all talk about "community" here, but then balk at what is a community-based solution to a very real problem that could affect us all (massive drop in property values and defaults/foreclosures/homelessness). Doesn't exactly make sense in that light, does it?

PlicketyCat,

The dilemma we face is timeless: it depends on whose ox is being gored.

Would I like to have my taxes for 2008 canceled and returned to me? Absolutely. Would that be fair to you if you don't get the same benefit? Not in your opinion - and probably not in mine, either.

As Craigmandu says in his post #16:

This entire financial bailout, subsequent stimulus, subsequent tarp
stuff is a gigantic slap in the face to those of us that aren't in any
threat of foreclosure or in a default situation.

I honestly have lost faith in my country completely and totally.  I
have done everything right, have a stable job, a great credit score,
and have never been late on any payment of anything.

What do I get for playing by the rules, and not being part of this ridiculous problem???? Nothing????

I can not only sympathize with his feelings, I can empathize as well because I feel the same way. Thus, when I read about the government trying to plug the dam (where's a little dutch boy when you need one?) by canceling HELs and HELOCs, I'm thinking, "Hang on there - what in the hell do you think you're doing?"

Recipients of this largess, on the other hand, think it's a great idea because it may help "save their bacon" to some extent. So now, the government is essentially pitting one part of the population against another.

None of us would deny a helping hand to those who are in financial difficulty through circumstances beyond their control. Jobs are lost, medical problems crop up, good people suddenly find themselves in a spot they never dreamed of. We all sympathize and think, "Wow, thank goodness that wasn't me".

Others who are in financial difficulty are like the grasshopper in Aesop's fable, "The Ant and the Grasshopper". Those are the ones us Ants are mad about. But, our government doesn't differentiate between the two when it starts throwing billions of dollars every which way.

If Craigmandu and I knew that the government was carefully vetting every single claim and weeding out the profligate, we wouldn't be anywhere near as annoyed as we are.

It's no wonder people of all stripes are taking up the mantra, "Cancel all debt!"  (tip o' the hat to Damnthematrix) Wink

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SamLinder
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Posts: 1499
Re: Second Liens Forgiven: Are You Kidding Me?
Gungnir wrote:

Sam,

I'm please you liked my humor

Firstly let me say that I think it's a sad day when
ethics/morals and paths are being subverted, due to a sense on
unfairness inherent in the system. I'd like to take a moment to apologize for my
generation, since I strongly suspect that it's my generation the 20-40
year olds that have driven this credit crisis to this point (we were raised on Gordon Gekko, and Junk Bonds), a lot of
the idea's that have been developed in CDO's the laundering of mortgage
tranches to specifically grab investment from low risk investment funds, etc. have probably come from my generation directly, I wasn't there and I wasn't involved, but I can understand the problem solving behavior that would lead to those concepts.

I
think I have minimal pause because of a double standard, an institution
expects that customers abide by the spirit of the law, however that
institution holds itself accountable to the letter of the law. Now to
my ethics, since the institutions only hold themselves accountable to
the letter of the law, then I'll play their game, and hold myself
accountable to that same standard. If however I owed you that money,
then would feel a great responsibility to you to repay that debt,

I
believe in responsible responsibility. Which means that if I have a
degree of control on the outcome of a situation then I have a
responsibility to try to achieve that outcome to the advantage of as
many parties as are involved in that outcome (ideally all), with some
caveats; those being unless previous decisions have been made by those
parties that did not reflect the same ethic, for instance worst case
where that party made a conscious decision to gain a higher profit at
the expense of all other parties involved.

Gungnir,

No need to apologize- unless you're one of those evil money men! Wink  I understand what you are saying and I appreciate your explanation.

I grew up in a time when my ethical standard was primarily the norm. The banks were also a lot smaller and were, for the most part, more honorable in their dealings with their customers. After all, banker and customer often knew each other and would often run into each other outside of the bank during the course of their normal daily activities. Your banker was often your neighbor and had a stake in the town.

I think I can remember when it started to go wrong. Many years ago, I lived in Fargo, ND. One day I saw a new billboard advertisement appear, "THE UGLIEST TELLER IN TOWN IS COMING!" (This is not a joke - that's really what the sign said!)

Needless to say, that created a bit of buzz as none of us had the slightest idea what that meant. To cut to the chase, it turned out that we were finally getting ATM's at our banks. That was the start of detaching the customer from the teller. Next thing I knew, banking was being automated more and more and direct interaction with a human teller was being discouraged.

Banks began to merge and banking giants began to appear. For you and me, it meant a loss of human contact and banking meant interacting with a robot most of the time. The rest, as they say, is history.

Personally, I would like to see all these "too-big-to-fail" institutions broken down into small pieces once again. They did it with AT&T many years ago - although all the baby bells have mostly merged back into giants again. Sigh....

Frankly, it's no wonder we all would like to see the banks get nailed. They treat us like serfs and go after their pound of flesh without an ounce of humanity left in their bodies!

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PlicketyCat
Status: Platinum Member (Offline)
Joined: Feb 26 2009
Posts: 680
Re: Second Liens Forgiven: Are You Kidding Me?
SamLinder wrote:

If it will help me live longer, I'll take it!  Wink

Trading your moral integrity for longevity - tsk tsk Laughing

PlicketyCat wrote:

OK, PlicketyCat. You got me with this one - I know Gen-x and Gen-Y but who are the "Digi-Kids"?

Digi-kids are the ones born after 2000, growing up with all things digital... i.e. they have no experience of life without microwaves, CDs, DVDs, cellphones, PDAs, gaming consoles, cable TV, high-speed Internet, etc.  Even the Y-ers remember VHS and dial-up, and X-ers remember BetaMax and life (at least childhood) before all the above mentioned.

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PlicketyCat
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Re: Second Liens Forgiven: Are You Kidding Me?
SamLinder wrote:
PlicketyCat wrote:

I'm going to be the punching bag again... as a responsible borrower who had to take out a HELOC to replace all the plumbing and electrical in my house because the city/county mandated that everything be brought up to code because we had to crack a wall to repair a leak. (yes, I know other people unscrupulously used 2nds for "stuff" but to assume that we all did is just plain wrong and unfair).

My 2nd lender (yes, that same lender who was going to get screwed if I defaulted or walked away) has, I believe, signed up for this stimulus bailout. Miraculously, if my HELOC was forgiven, like the "rules" of the package stipulate, then my house would barely be underwater even though it's taken almost 30% value hit recently. My primary lender would be in hog heaven, because I could give them back the house (Deed In Lieu of Foreclosure) and they would make a profit when they resold for any amount.  Heck, I might even be able to sell my house without taking too much of a loss.

I wonder how many other responsible borrowers would find themselves in a much better financial position (i.e. not insolvent on their homes) if their 2nds, HELs and HELOCs were forgiven in this manner. Remember, those people pay taxes, too... it's not all coming out of your pocket.  I'm sure that my tax dollars paid/will pay for something that benefits you and not me somewhere along the road... just think about it.

We all talk about "community" here, but then balk at what is a community-based solution to a very real problem that could affect us all (massive drop in property values and defaults/foreclosures/homelessness). Doesn't exactly make sense in that light, does it?

PlicketyCat,

The dilemma we face is timeless: it depends on whose ox is being gored.

Would I like to have my taxes for 2008 canceled and returned to me? Absolutely. Would that be fair to you if you don't get the same benefit? Not in your opinion - and probably not in mine, either.

As Craigmandu says in his post #16:

This entire financial bailout, subsequent stimulus, subsequent tarp stuff is a gigantic slap in the face to those of us that aren't in any threat of foreclosure or in a default situation.

I honestly have lost faith in my country completely and totally.  I have done everything right, have a stable job, a great credit score, and have never been late on any payment of anything.

What do I get for playing by the rules, and not being part of this ridiculous problem???? Nothing????

I can not only sympathize with his feelings, I can empathize as well because I feel the same way. Thus, when I read about the government trying to plug the dam (where's a little dutch boy when you need one?) by canceling HELs and HELOCs, I'm thinking, "Hang on there - what in the hell do you think you're doing?"

Recipients of this largess, on the other hand, think it's a great idea because it may help "save their bacon" to some extent. So now, the government is essentially pitting one part of the population against another.

None of us would deny a helping hand to those who are in financial difficulty through circumstances beyond their control. Jobs are lost, medical problems crop up, good people suddenly find themselves in a spot they never dreamed of. We all sympathize and think, "Wow, thank goodness that wasn't me".

Others who are in financial difficulty are like the grasshopper in Aesop's fable, "The Ant and the Grasshopper". Those are the ones us Ants are mad about. But, our government doesn't differentiate between the two when it starts throwing billions of dollars every which way.

If Craigmandu and I knew that the government was carefully vetting every single claim and weeding out the profligate, we wouldn't be anywhere near as annoyed as we are.

It's no wonder people of all stripes are taking up the mantra, "Cancel all debt!"  (tip o' the hat to Damnthematrix) Wink

I wish there was a way to not reward the abusers and not punish the non-abusers at the same time. Us proto-Ants would really like to stop being lumped in with the Grasshoppers Frown

I can totally sympathize and empathize with the "Hang on here a minute" feelings. I go through the same thing watching people who can work milk the welfare system and pump a new kid every year or two, while I legitimately can't work and am still fighting for disability benefits that I already paid for. I used to grumble everytime I saw Social Security withheld from my paycheck because I knew that money was going bye-bye since the program will be utterly depleted before I collect my investment on retirement. I grumble about my property taxes going up every year to pay for schools when I don't have any children. 

But these are social programs and they are necessary for society and civilization to function the way it is now... individual communities don't take care of their own anymore unless they are small. I don't mind so much that my tax dollars go to help people, even the few slackers. What bothers me is that the government has mismanaged that money, and that businesses keep getting the big bail-outs and not individuals. At least with this one, if the banks can't weasel out of it, there is some chance that the aid will reach the people.

Personally, I'd love for that top 1% elite to be forced to pay off everyone's 2nds and 1sts... level the playing field! We all know that the government and power elite are masters at setting one part of the population against the other... it keeps us off their backs and away from thier gates with our flaming torches.

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SamLinder
Status: Diamond Member (Offline)
Joined: Jul 10 2008
Posts: 1499
Re: Second Liens Forgiven: Are You Kidding Me?
PlicketyCat wrote:
SamLinder wrote:

If it will help me live longer, I'll take it!  Wink

Trading your moral integrity for longevity - tsk tsk Laughing

Nice try - but no. I'll join if I can keep my ethics but drop about 40 years off this body! Wink

PlicketyCat wrote:
SamLinder wrote:

OK, PlicketyCat. You got me with this one - I know Gen-x and Gen-Y but who are the "Digi-Kids"?

Digi-kids are the ones born after 2000, growing up with all things digital... i.e. they have no experience of life without microwaves, CDs, DVDs, cellphones, PDAs, gaming consoles, cable TV, high-speed Internet, etc.  Even the Y-ers remember VHS and dial-up, and X-ers remember BetaMax and life (at least childhood) before all the above mentioned.

Ahhh - I see what you're saying. I hadn't heard this term before so that's why I asked. Thanks for the insight.
Laughing

PlicketyCat's picture
PlicketyCat
Status: Platinum Member (Offline)
Joined: Feb 26 2009
Posts: 680
Re: Second Liens Forgiven: Are You Kidding Me?

Hehe Sam - dropping 40 years would make you closer to a Y-er than an X-er... I'm already starting to feel my creaky bones, too Wink

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grl
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Joined: Nov 30 2008
Posts: 188
Re: Second Liens Forgiven: Are You Kidding Me?

oh my, I just checked this post after a few days out. How did this become a discussion of generations. My kids are millennials (Sam, the term "millennials" is from an excellent book, The Fourth Turning, and I think is roughly equivalent to  Plicketycat's "digi-kids") and I dare say that my children will continue my standards of personal responsibility and "righteous living." Don't get bamboozaled into believing that you just have "old" values Sam. Chris (Martenson) has shared some of his personal experience raising kids, Do you think his kids would buy into some of the moral depravity you see posted in various threads of this website? Just a thought.

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caroline_culbert
Status: Platinum Member (Offline)
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Posts: 624
Re: Second Liens Forgiven: Are You Kidding Me?

All I know is that we have been let down, not only by our government, but by the BB who have lived too comfortably to resist and fight with tools.  I grew up with parents and people in positions of power who forced us not to question.  Well it's no wonder we've grown up so aloof and brainwashed.  We're starting to wake up and you might not like what the future has in store for you.  Be kind to your kids because they will be picking your nursing homes-- or not.  There comes a time when things will change and it might be better for us; but not necessarily be better for you BB.  When you have failed to do your part we have to pick up the pieces and do what we can because, frankly, you have not prepared us for anything important in life.  You have been beholden to those in power and have subjected us to the same.... so, thanks... for nothing... important.  The very people you taught us to judge, very poorly, I might add, will be the ones to feed you later.

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