Sunday, August 15, 2010

NYT: Fair Game - In the Mortgage Drama, One Role Is Enough


Often, the same bank that services a primary mortgage owned by another institution also owns a second mortgage or home equity line of credit on the same property. When that borrower has trouble meeting both payments, the servicer has an interest in making sure that amounts owed on the second lien, which it owns, continue to be paid even if the first loan, which it has no interest in, slides into delinquency. About two-thirds of primary mortgages are serviced by banks who do not own them but hold the accompanying seconds.

Thursday, August 12, 2010

Borrowers Refuse to Pay Billions in Home Equity Loans -

Voltron says: This is why Wells Fargo is bankrupt many times over


The delinquency rate on home equity loans is higher than all other types of consumer loans, includingauto loans, boat loans, personal loans and even bank cards like Visaand MasterCard, according to the American Bankers Association.

Lenders say they are trying to recover some of that money but their success has been limited, in part because so many borrowers threaten bankruptcy and because the value of the homes, the collateral backing the loans, has often disappeared.

The result is one of the paradoxes of the recession: the more money you borrowed, the less likely you will have to pay up.

Even when a lender forces a borrower to settle through legal action, it can rarely extract more than 10 cents on the dollar. "People got 90 cents for free, It rewards immorality, to some extent."

"Anything over $15,000 to $20,000 is not collectible. Americans seem to believe that anything they can get away with is O.K."

...85 percent said they would default and worry about the debt only if and when they were forced to.

"I'm kind of banking on there being too many of us for the lenders to pursue. There is strength in numbers."

Saturday, August 7, 2010

Sad sign of the times

Modern cargo ships slow to the speed of the sailing clippers
Container ships are taking longer to cross the oceans than the Cutty Sark did as owners adopt 'super-slow steaming' to cut back on fuel consumption