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Archive for the ‘Mortgage Cram-Down’ Category

Dennis Kelleher Calls Out President Obama on Mortgage Fraud

Posted by Larry Doyle on January 28th, 2014 10:59 AM |

Do you plan on watching President Obama’s State of the Union address this evening?

Why do I think I hear many people who might read this blog say, “Why would I want to do that?”

In the midst of leaving an event last evening in New York City, a very informed pollster told me that the overwhelming sense in the nation today is that people are totally fed up with Washington and Wall Street. No surprise there, but why is that? Well, because all too often our politicians from both sides of the aisle over-promise and then under-deliver.

As an example of just that practice, I commend Dennis Kelleher, President of Better Markets, for releasing the following statement regarding the Obama administration’s promise he made two years ago in his State of the Union to bring real accountability to Wall Street.     (more…)

You’re Screwed by Wall Street Mortgage Settlement

Posted by Larry Doyle on March 20th, 2012 1:06 PM |

The American system of justice used to be predicated on the fact that those who committed transgressions paid the penalty. Regrettably, that system of justice is now a distant memory in regard to the adjudication of certain massive and egregious financial practices.

Has it become all too overwhelming for you to keep up with the violation of contracts and moral hazards in America today? I implore you not to give up the fight as future generations are counting on us to stand up for real justice. I addressed the injustice last week in writing, Mortgage Settlement Defines Racketeering:

If the Wall Street mortgage settlement is supposed to define justice, then crime certainly does pay. (more…)

Mortgage Settlement Pisses Into the Wind

Posted by Larry Doyle on February 12th, 2012 5:34 PM |

In a nation now all too familiar with a “too big to fail” banking system, a heavily manipulated and high frequency dominated equity market, and an incestuous financial regulatory system, we should not be surprised with a mortgage settlement that does little more than ‘piss into the wind’.

Pardon my cynicism, but one does not need to look too deeply into the recently announced mortgage settlement to understand there is little in the way of meaningful justice embedded in this contrivance. (more…)

Will Principal Reduction Save Housing?

Posted by Larry Doyle on January 23rd, 2012 12:53 PM |

While Washington has thrown everything and the kitchen sink to support our banking system and our economy over the last few years, Washington has been unable to prop up our housing market.

What do many in Washington and elsewhere believe needs to be done on the housing front?  (more…)

Housing Double Dip Represents ‘Patient’ Opportunity

Posted by Larry Doyle on June 1st, 2011 9:30 AM |

While various and sundry soothsayers have been touting the relative merits of our housing market for the last few years, I did not have a constructive comment about housing until just six weeks ago when I wrote, Is It Getting Time To Buy a House?. Housing price data released yesterday confirmed that our nations’ housing market has, in fact, suffered a double dip.

Is my positive commentary on housing premature and akin to ‘catching a falling knife’? Why was I negative for so long? Why do I think the bottoming process will be prolonged? What do I see as a compelling reason why homeownership is becoming increasingly attractive? Let’s navigate.

1. Why was I negative for so long? (more…)

Gaming Uncle Sam’s Mortgage Modification Program

Posted by Larry Doyle on March 31st, 2010 11:08 AM |

A new release by the SIGTARP (Office of the Special Inspector General for the Troubled Asset Relief Program) is exceptionally enlightening in detailing how a likely significant percentage of those homeowners who entered the trial mortgage modification process gamed the system.

Once again, major high five to our friends at 12th Street Capital for sharing this report and providing insightful commentary. As 12th Street points out this morning:

With all of the hoopla surrounding the government and Bank of America announcements to push principal forgiveness to the top of the waterfall for mortgage modification triage, it would have been easy to miss the latest report from the SIGTARP (Special Inspector General of TARP). I have attached the report here and would encourage you to print it out and read it. (more…)

Socialized Housing Manifesto

Posted by Larry Doyle on March 26th, 2010 10:36 AM |

Thank you to our friends at 12th Street Capital for sharing a sneak peek of Uncle Sam’s release of his new “Socialized Housing Manifesto.” (Click on the image to access pdf document.)

What is the one word that Uncle Sam is clearly trying to emphasize throughout the 4-page release? Responsible. Who the hell is Uncle Sam to define who and what is responsible or not? (more…)

Barack Really is Going to Pay Her Mortgage

Posted by Larry Doyle on March 26th, 2010 8:24 AM |

My blood is boiling. Why?

The assault on the principles of free market capitalism is escalating with news that banks are poised to start reducing principal balances on certain mortgages.

I empathize with those who are strapped, but I have never felt more strongly on a topic than this principal reduction. Despite any and all bulls*%# put forth by those in Washington, the principal reduction program is an enormous escalation of the violation of moral hazard which our country sadly continues to embrace. I have no doubt it will expedite the development of a socialized housing finance system.

Do not think for a second that banks will take the hit on these principal reductions. Who will take the hit? Me and you. Those who have worked hard, saved, played by the rules, and taught our children to do the same. (more…)

Mortgage Modification Applications Decline in November

Posted by Larry Doyle on December 14th, 2009 4:01 PM |

If you don’t buy a ticket, you can’t get into the game.

The Obama administration’s attempt to stabilize the housing market has been an abysmal failure.  That fact has been widely broadcast here at Sense on Cents and increasingly at other outlets. While the administration is now attempting to revive this initiative, the fact is the trend in this program is declining. What trend? How is that defined?

Just as a student won’t gain admission to a school without having applied, similarly homeowners will not gain the benefits of a mortgage modification without processing an application. Thank you to our friends at 12th Street Capital for sharing a recent report produced by Bank of America highlighting a number of trends in mortgage modifications, including applications. Let’s navigate. Bank of America reports:

Last month we said that we expected the focus of the HAMP program to shift from outreach and initiation of new trial modifications to completion of modifications and much of this has been confirmed now. The number of trial modifications started over the last month was the lowest yet at about 77k. This represents more than a 50% drop from the prior month. Also, the number of offers given over the last month was at all time lows dropping 30% from the previous month. This month’s report also disclosed permanent modifications for the first time. So far, 31k trial modifications have been successfully converted to permanent modifications. This represents only 4% of started trial modifications. Furthermore, an equal number have failed and are no longer active.

What are the actual figures for mortgage modification applications since this program was launched last spring? BofA reports:

May: 50,130
June: 93,146
July: 110,397
Aug: 133,192
Sept: 100,216
Oct: 163,913
Nov: 77,414,

While Uncle Sam will try to make a go of saving this program, the fact is it’s a pea shooter in the midst of a sandstorm. What would be the heavy artillery? Principal reduction via mortgage cram-downs.

Although Congress has shot down that plan twice, look for a return engagement in 2010.

For those interested in reviewing the Bank of America Mortgage Modification Monitor, click on the image below to access the entire pdf document:


Mortgage Cram-Downs Revisited

Posted by Larry Doyle on December 11th, 2009 2:03 PM |

Having broached the topic of mortgage cram-downs this morning, Bloomberg reports that an amendment adding this capability to pending legislation was voted down today. Mortgage ‘Cram-Down’ Bankruptcy Amendment Fails in U.S. House:

Republican lawmakers defeated a mortgage “cram-down” amendment that would have given federal judges the power to lengthen mortgage terms, cut interest rates and reduce loan balances for homeowners in bankruptcy court.

The U.S. House of Representatives voted 241-188 today, stripping the amendment from a broader package of proposed laws to rein in excess on Wall Street. The cram-down provision was identical to legislation that passed the House in March and then failed in the Senate amid opposition from the banking industry.

This vote against mortgage cram-downs is the second time it has been struck down. As the dynamics within the mortgage crisis linger well into 2010, I fully expect this proposed piece of legislation will be back up in front of Congress again.


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