Replies to post #22231 on Value Microcaps Free-For-All

[dickmilde]

Reduce the interest rate all you want...

As long as it comes out of the greed of the lenders pocket and not subsidized by the government and I agree with you 100%... Don't take down the principle because that is scheduled to be provided by the government. In other words you and me.

This entire bail out crap is insane... People that were/are irresponsible are being rewarded for their stupidity and I have to pay for it.

Where is the reward for the person that did it right???? I have a responsible mortgage and it is being paid on time. Why am I not being compensated for doing the right thing??? Why is there a penalty for getting it right?

Dick Milde

[split710]

lentinman,

I agree with you completely,
BUT, I do expect to see "principle reduction" before all is said and done.

[gilead23]

Len I don't get you at all

Correct me if my memory is wrong here but you were gung ho for the bailouts for "practical reasons". Now you are saying screw them and you don't care what the consequences are.

I have no sympathy whatsoever for these idiot homeowners but I have no less for them than for the idiot corporate execs that got bailed out.

Amendment:
Found it here is your previous attitude on moral hazard
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=34158338&txt2find=moral|hazard

I am glad you finally got it right in any case.

[Lazarus]

In many cases it a principle reduction makes sense...

if the bank is going to have to foreclose on the home because the homeowner who overbought can no longer afford the payment on his 300k home (that is now worth 100k) the bank would be dollars ahead to negotiate the loan to 80% of current value AND give a sweet interest rate.

According to mortgage financier Freddie Mac, the typical foreclosure cost is nearly $60,000. And officials at HSBC North America, parent of HSBC Bank USA, HSBC Mortgage Corp. and HSBC Finance Corp., say their average loss on sale at foreclosure is 20 percent to 25 percent of the loan’s value.

You also have to consider the additional liability and expenses such as vandalism. I have walked into a fair share of homes that have been totally trashed by vandals. In some homes they are even stripping out the plumbing.

Besides "principle reduction" is EXACTLY what the banks are getting in 98% of the foreclosures and "short sales."