The Mortgage CRAMDOWN, Bankruptcy, and The Good of The People.
The Mortgage Cramdown movement really starts with changes to the Bankruptcy laws to allow Bankruptcy judges to modify interest and payment rates. Does this mean you are going to have all your miserable residual mortgage above market value forgiven?  I have the answer but I want to wait and let you find out for yourself. To help you understand the most realistic vision of what is to come I would like to share with you the comments from a prominent member of Congress just last Friday evening.
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When asked by the press if the Mortgage Cramdown Legislation was going to forgive debt here is what the Congressman had to say. He said the program was designed to incentivize lenders to reduce interest rates and payments in an effort to avoid foreclosure and bolster negotiation. Put a different way that means to help stabilize housing and once again address saving the free market. He further went on to say that there would be virtually no forgiven mortgage debt.Â
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He explained that only in very extreme circumstances would there be any forgiven mortgage debt. The program has been designed to pressure more lenders to the negotiation table with the threat of bankruptcy. Whether it works is one thing but the real question you must ask yourself as a homeowner or investor is completely another thing. Tomorrow is a big day. Many people are waiting for the details on more legislation with the expectations that the Obama Administration will be sending out checks for thousands to millions of distressed homeowners that made bad decisions. The issuance of handouts in the form of checks is not real, but the expectations of saving people that currently find themselves in an upside down equity predicament with a property is real to them, and is the same as a check from Uncle Sam. I am telling you for the record that there are people in trouble with their primary residences, second homes, investment properties, and many people significantly overexposed with multiple investment properties. Thousands upon thousands of people have high hope and expectations for mercy and bailout. Dependent on what category you fall into, do you feel worthy of a bailout, and can you handle the scrutiny and rejection if you clearly are not eligible?
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Are you planning to go to bankruptcy to essentially achieve a rotten loan modification? You can’t lie or hide assets in Bankruptcy. Uncle Sam frowns upon this. If you are considering Bankruptcy as a solution are you aware of the overall credit and financial ramifications of this declaration. Even if you file and decide not to go through with Bankruptcy you will be hurt severely. Before you choose such a radical move you should understand all your options.
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The only real way you can literally take advantage of the macro environment and be eligible for significant forgiven debt without breaking any federal laws or subjecting your self to incrimination is a Short Sale. I stifle at the though and expectation of all the people in trouble that expect debt forgiveness with no sacrifice or solution to the lender. Does anyone have any conceptual opinion of contract law? All of the mortgages that are tied to the collateral, your problem homes, have investors and they have binding investment contracts. Obama may have charisma and be a smooth talker at speech time but he does not have the money to make everyone whole or take on capitalism and the contact law that binds it into a machine. You, me, Obama, and the commander of the mighty Sixth Fleet can not sustain the death knell to capitalism and our country without free markets and private capital.
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Private capital has a life of its own. If you take away the incentive of gain or pull the rug out from under the platform that supports it then private capital chooses not to participate. We all say what happed to liquidity and markets worldwide after the demise of Lehman.
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Now I ask you the question once again. Is the mortgage Cramdown legislation and all the bells and whistles Obama throws at us tomorrow going to save all the distressed homeowners with the nirvana of forgiven mortgage debt? I don’t definitively have the answer. Knowing the client profiles, and the money and jobs most have, I would venture to say the many will simply not be eligible for any of the programs. This is exactly what we have seen to date over the past year. Where does that leave the vast majority of you?Â
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Frankly it leaves you with the financial incentive to investigate a Real Estate Short Sale to get out of a bad situation with any property. Whether you truly have an affordability issue, or you are just an over exposed investor, please do not waffle around and go broke by taking no action or initiating any investigation. I am going to give you an absolutely free opportunity to learn and help yourself and your family.
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Today we are offering a 7 Day Free Trial of our online video program The Negotiated Solution available at www.thenegotiatedsolution.com The free part is the very intense and informative two hour video portion. Obviously if you want unlimited access and all the other information you will have to upgrade and pay some money. However, I am offering you a credible presentation of the Real Estate Short Sale Solution with No Risk and No Credit card. I want people to understand their options. I give you my personal guarantee that the program will be well worth your time. I would like everyone to be part of their own solution and so we can let the government take care of the real desperate folks and eventually get our country and economy back on track.
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Let’s face it, this is America, but when you look at the stocks and companies that have virtually gone to nothing there is little to be proud of. I beg for normalcy and I would like to see everyone win but that is not realistic. There will be winners and there will be unfortunate circumstances with many more foreclosures and hardships to come. I want you to be a winner.Â
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Blogging from the front line of the housing crisis.
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GHunter
December 23rd, 2009 at 9:04 am
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March 28th, 2010 at 2:39 am
Good post! here’s a good one for ya, an organization is like a tree of monkeys… all on different limbs,… at different levels,…some climbing up. The monkeys on the top look down and see a tree full of smiling faces. The monkeys on the bottom look up and see nothing but a%Xholes. hahahah work is too serious joke a little!
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