Eminent Domain - Refi Based On Current Mkt Value
#1
Posted 11 August 2012 - 02:57 PM
Something about this doesn't sit well with me. I'm very thankful that I'm employed. I don't have any current worries about making my mortgage payment. But I suffered through all the well meaning advice to buy my home with an ARM or some variant thereof. I payed a higher interest assuming that prices would come down. I suffered through paying higher interest while others were playing the no-down, ARM games.
I understand and sympathize with those that have lost their jobs and are having a hard time making ends meet. This is not about them. But others who remain employed and can make the mortgage payments, why should they get this type of benefit? I'm not sure I'm underwater (in the sense that my mkt value is still above my principal amount, albeit barely). But my mkt value is under my original purchase price.
Why wouldn't I get any benefit? Why couldn't I get my principal adjusted down at a lower interest rate just like these other people? They used the example of an owner who might have bought at $300k and it's now worth $200k -- they'd get a mortgage based on $200k. Why can't I get my mortgage adjusted by $100k too? Maybe I should just walk away from my house too. I'm getting a little tired of this craphole that is CA -- I'd like to move out. But I'm stuck here because I can't sell my house.
I'm thankful I'm not in dire straits. But I'm also a little pissed with the notion that you get penalized for trying to live smart.
Sorry for the rant. I just wish that there was a program that adjusts ALL mortgage principles down by 20% (or whatever), not just 'underwater' ones. Let the frickin banks suffer -- they caused all this.
#2
Posted 11 August 2012 - 07:09 PM
I didn't read it in detail, but there is an article in the Bee about using eminent domain to seize houses that are underwater and then let the homeowner buy/finance it again at market value.
Something about this doesn't sit well with me. I'm very thankful that I'm employed. I don't have any current worries about making my mortgage payment. But I suffered through all the well meaning advice to buy my home with an ARM or some variant thereof. I payed a higher interest assuming that prices would come down. I suffered through paying higher interest while others were playing the no-down, ARM games.
I understand and sympathize with those that have lost their jobs and are having a hard time making ends meet. This is not about them. But others who remain employed and can make the mortgage payments, why should they get this type of benefit? I'm not sure I'm underwater (in the sense that my mkt value is still above my principal amount, albeit barely). But my mkt value is under my original purchase price.
Why wouldn't I get any benefit? Why couldn't I get my principal adjusted down at a lower interest rate just like these other people? They used the example of an owner who might have bought at $300k and it's now worth $200k -- they'd get a mortgage based on $200k. Why can't I get my mortgage adjusted by $100k too? Maybe I should just walk away from my house too. I'm getting a little tired of this craphole that is CA -- I'd like to move out. But I'm stuck here because I can't sell my house.
I'm thankful I'm not in dire straits. But I'm also a little pissed with the notion that you get penalized for trying to live smart.
Sorry for the rant. I just wish that there was a program that adjusts ALL mortgage principles down by 20% (or whatever), not just 'underwater' ones. Let the frickin banks suffer -- they caused all this.
I agree. I just can't believe what's happening in this country.
#3
Posted 11 August 2012 - 07:40 PM
I agree. I just can't believe what's happening in this country.
#4
Posted 12 August 2012 - 06:56 AM
HARP 2.0 is out for those who are underwater and have Fanny or Freddie loan. My loan is a Freddie, but I closed two months June and could only be eligible had I closed in April. I'll join the pity party too as I'm like Tsukiji in that I can afford my payment, but screwed I cannot refi with a lower interest rate and smaller loan!
its the government using eminent domain to try to correct a uneven contract between two private entities that concerns me. that's a big stretch of government reach.
#5
Posted 12 August 2012 - 07:49 AM
The whole thing could've been adjusted automatically by taking homes bought during the bubble and a certain percentage taken off the principal and the mortgage rate lowered to current market rates. This would have prevented foreclosures on millions of people. Now, it's a mish mash of political and social ills. Also, this new program wouldn't help Fannie/Freddy from what I understand, so who is it helping? Mostly rich millionares whose homes are worth millions and they are about to walk away from them. The rich get richer, the poor get poorer and the middle class pays for it all!
If you do this fairly, you have to include all homeowners, especially ones that got the Harp b/c most of them just had their mortgage extended with temporary rate cuts that inch up to higher than market rates.
Also, homeowners who can afford to pay, but are not able to refinance because of strict refi rules and are underwater should be able to use this program. I saw a short sale on my street yesterday close for $110,000 less than my house is worth, makes me sick. We will never make money off our home, esp b/c there are going to be thousands of brand new homes going to be built on 50.
#6
Posted 12 August 2012 - 09:28 AM
We will never make money off our home, esp b/c there are going to be thousands of brand new homes going to be built on 50.
not necessarily. I think south of 50 is going to be more like Elk Grove or the pocket area. there may be new homes, but I suspect they won't be large upscale houses. There won't be any kind of competing mall out there either, so more strip commercial (grocery store with a scattering of smaller retail and drive-through). So what is north of 50 wll be closer to Lake Natoma and Folsom Lake and the malls and Three Stages and old town. I think it will have more of a community feel. Your home value may be just fine.
I love that open space so much and that oak forest and the rolling hills that I hope it is many many years until dirt is moved.
#7
Posted 12 August 2012 - 09:51 AM
We will never make money off our home, esp b/c there are going to be thousands of brand new homes going to be built on 50.
Some would say the cost of the new home will drive your home value up. I guess you'll see in a few years.
#8
Posted 12 August 2012 - 03:27 PM
#9
Posted 12 August 2012 - 04:43 PM
The down side of this is it almost starts to stink of Socialism? The local governments will decide how much your house is worth? But all in all, if the house payment can come down, I'm good with it. Everything else is going down, like my take home pay. So why not?
#10
Posted 12 August 2012 - 06:15 PM
#11
Posted 13 August 2012 - 07:23 AM
#1-- They want to take performing loans and do this just because they're upside down. No hardship and still paying your mortgage.
#2-- Secondly, money is not free and comes from somewhere. However, just because you pay your payment to "Bank XYZ" doesn't mean they own it. They can be collecting the payment for your own pension or retirement fund. Stealing from someone's retirement fund to pay for someone elses upside down home is not a net gain to society.
#3-- Lenders won't lend in these areas because there is too much risk of not getting paid back due to eminant domain issue.
Ultimately this is not about keeping people in their home but solely about property tax revenue for these local governments. Elk Grove went up 10% in the past 6 months and their property tax will be rising. We shouldn't jeopardize our freedom for a couple of down years property tax revenue.
#12
Posted 13 August 2012 - 07:43 PM
What I always hear is the 'moral obligation' one should hold dearly when dealing with a mortgage. Yet when it comes to business, if it costs you $100 a month to run your business but you're only bringing in $85 in revenue, would you keep running said business?
#13
Posted 14 August 2012 - 07:31 AM
#14
Posted 14 August 2012 - 01:14 PM
A few issues with this.
#1-- They want to take performing loans and do this just because they're upside down. No hardship and still paying your mortgage.
#2-- Secondly, money is not free and comes from somewhere. However, just because you pay your payment to "Bank XYZ" doesn't mean they own it. They can be collecting the payment for your own pension or retirement fund. Stealing from someone's retirement fund to pay for someone elses upside down home is not a net gain to society.
#3-- Lenders won't lend in these areas because there is too much risk of not getting paid back due to eminant domain issue.
Ultimately this is not about keeping people in their home but solely about property tax revenue for these local governments. Elk Grove went up 10% in the past 6 months and their property tax will be rising. We shouldn't jeopardize our freedom for a couple of down years property tax revenue.
I might be missing something, but wouldn't property taxe revenues actually decline under this program?
If in the example they gave, the $300,000 house was now worth $200,000, but they were going to E.D. it for $160,000, why wouldn't the property tax be based on the $160,000?
How would anyone one of us like to be the neighbor who isn't getting this deal from the Government? Can you imagine the politics involved on who gets this deal ad who doesn't?
I'm only asking for discussion purposes, I recognize your not the author of this idea.
IMO, this is the scariest idea I've ever heard of! If cities can do this, then why can't they E.D. busineses that aren't producing up their potential?
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