{"id":11505,"date":"2010-03-09T07:03:45","date_gmt":"2010-03-09T14:03:45","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=11505"},"modified":"2010-03-09T07:03:47","modified_gmt":"2010-03-09T14:03:47","slug":"in-defense-of-home-loan-cramdown","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/11505\/in-defense-of-home-loan-cramdown\/","title":{"rendered":"In defense of home loan cramdown!"},"content":{"rendered":"

Al’s got a post up about the latest<\/a> effort to get us out the housing mess. The feds are rolling out HAFA,<\/a> set to take effect April 5, which will solve all of our problems! by giving financial incentives! for borrowers, servicers, and investors! <\/p>\n

In exchange, creditors must release borrowers from any deficiency liability on the 1st mortgage, must protect the Realtors fees, and must comply with standardized processes meant to speed up the short sale process.<\/p>\n

Here’s my take, and I’m saying this as someone who is not at all trying to line my pocket because I’m a fledgling Raleigh bankruptcy lawyer<\/a>. Honest!<\/p>\n

This should’ve been run through the Bankruptcy process. Certain other debts can be crammed down in the Chapter 13 consumer bankruptcy process, meaning that the total amount owed on the loan can’t exceed the market value at the time of the bankruptcy. For people under water, this would’ve basically meant that the loan amount would’ve been adjusted down to the value of the house at the time they went through bankruptcy.<\/p>\n

That would’ve brought mortgages in line with the way other kinds of secured debts are treated in the Bankruptcy Code, and it would’ve permitted an individualized look at each case (by bankruptcy lawyers, trustees, and judges) in a process that works reasonably well.<\/p>\n

As it is, whole new administrations have been set up<\/a> to handle these jury-rigged and ultimately flawed approaches to fixing a problem will require a little more than $1,500 to the borrower, $1,000 to the servicer, and $1,000 to the investor (HAFA guidelines) to fix.<\/p>\n","protected":false},"excerpt":{"rendered":"

Al’s got a post up about the latest effort to get us out the housing mess. The feds are rolling out HAFA, set to take effect April 5, which will solve all of our problems! by giving financial incentives! for borrowers, servicers, and investors! In exchange, creditors must release borrowers from any deficiency liability on […]<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-11505","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-real-estate","8":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1855,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1855\/the-new-york-times-goes-on-a-countrywide-manhunt\/","url_meta":{"origin":11505,"position":0},"title":"The New York Times goes on a Countrywide manhunt","author":"Greg Swann","date":"August 25, 2007","format":false,"excerpt":"The New York Times on the Countrywide mess and how the company got there:ON its way to becoming the nation\u2019s largest mortgage lender, the Countrywide Financial Corporation encouraged its sales force to court customers over the telephone with a seductive pitch that seldom varied. \u201cI want to be sure you\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2251,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2251\/california-sub-prime-bailout-rewarding-the-feckless\/","url_meta":{"origin":11505,"position":1},"title":"California Sub-Prime Bailout: Rewarding the Feckless","author":"Brian Brady","date":"November 23, 2007","format":false,"excerpt":"Governor Schwarzenneger brokered a bailout for California sub-prime borrowers with four major servicers: Countrywide, GMAC, Litton and HomeEq - which collectively service more than one quarter of subprime loans to people with poor credit - agreed to maintain the initial, lower interest rate for some subprime borrowers whose rates are\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10513,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10513\/modifications-are-failing-more-on-the-acronym-soup\/","url_meta":{"origin":11505,"position":2},"title":"Modifications are Failing…. (More on the Acronym Soup)","author":"Tom Vanderwell","date":"December 8, 2009","format":false,"excerpt":"There's a couple of interesting and yet disturbing points to this report from CNBC:over 2\/3rds of the people who are currently in the trial period of loan modifications are not going to qualify for the permanent modifications.\u00a0\u00a0 Why?\u00a0\u00a0 A couple of likely possibilities:\u00a0 1) They are too far upside down\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":852,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/852\/what-isaac-newton-knew-about-mortgage-lending\/","url_meta":{"origin":11505,"position":3},"title":"What Isaac Newton Knew About Mortgage Lending","author":"Dan Green","date":"January 4, 2007","format":false,"excerpt":"I recently wrote about sub-prime loans for the first time in a long while because the sector should start taking more headlines in the papers. I'd hate for you to be unready for it, of course. Sub-prime loans are a big part of mortgage lending. \"Sub-prime\" is a broad-sweeping term\u2026","rel":"","context":"In "Enduring Interest"","block_context":{"text":"Enduring Interest","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/enduring-interest\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3185,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3185\/whos-a-mortgage-fiduciary\/","url_meta":{"origin":11505,"position":4},"title":"Who’s a Mortgage Fiduciary?","author":"Brian Brady","date":"May 31, 2008","format":false,"excerpt":"Are you ready for the next big argument about fiduciary capacity? It's coming in the form of national loan originator licensing and it promises to be a doozy. The Federal Housing Finance and Regulatory Reform Act of 2008 is proposed legislation that seeks to license anyone who quotes rates or\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6681,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/6681\/david-bartels-redefines-mortgage-originators-as-borrower-advocates\/","url_meta":{"origin":11505,"position":5},"title":"David Bartels Redefines Mortgage Originators as “Borrower Advocates”","author":"Brian Brady","date":"January 23, 2009","format":false,"excerpt":"I had fun today because\u00a0 I got to hang out with a bunch of mortgage salespeople.\u00a0 I drove up the 5 to Irvine, epicenter of the sub-prime mortgage industry, to see the High Performance Strategies Seminar, hosted by David Bartels and Greg Frost.\u00a0 David Bartels is an executive with Loan\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/11505","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=11505"}],"version-history":[{"count":1,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/11505\/revisions"}],"predecessor-version":[{"id":11506,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/11505\/revisions\/11506"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=11505"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=11505"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=11505"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}