{"id":2251,"date":"2007-11-23T08:50:53","date_gmt":"2007-11-23T15:50:53","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=2251"},"modified":"2008-01-08T20:30:36","modified_gmt":"2008-01-09T03:30:36","slug":"california-sub-prime-bailout-rewarding-the-feckless","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2251\/california-sub-prime-bailout-rewarding-the-feckless\/","title":{"rendered":"California Sub-Prime Bailout: Rewarding the Feckless"},"content":{"rendered":"

Governor Schwarzenneger brokered a bailout for California sub-prime borrowers<\/a> with four major servicers:<\/p>\n

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 scheduled to jump significantly higher. To qualify, borrowers must occupy their homes, have made their payments on time and prove they cannot afford payments with the higher interest rate.<\/em><\/p><\/blockquote>\n

You had to see it coming. California is a mess right now with foreclosures<\/a>. An argument could be made that sub-prime borrowers weren’t charged enough<\/a> for the risk lenders took on them. Did the Governor, in fact, reward the feckless few who blindly bought into an inflated market? Does the measure penalize the responsible who waited for realistic prices and saved their sheckles for a down payment?<\/p>\n

Two stipulations of the bailout are:<\/p>\n

(a)- the borrower must be making timely payments, and<\/p>\n

(b) the borrower must demonstrate an inability to service the higher payment.<\/p>\n

While sub-prime loans are traditionally earmarked for the credit challenged, lenders extended these loans to good credit borrowers. Those borrowers bought a home that they couldn’t afford, with no money down. This program may very well reward people who lied to get a “smokin’ deal” and who now cry foul when that subsidized deal is taken away. The only exit strategy these borrowers had was to refinance out of the loan. That strategy was predicated upon a continual rise in property values. I know this; I work in the eye of the hurricane<\/strong>.<\/p>\n

So, does Gena Reide. She’s a real estate broker in Sacramento, a community that has been hit hard by the meteoric rise in prices and subsequent drop back down to reality. Her ebullient report about this measure<\/a> suggests that it is an idea that is long overdue.<\/p>\n

Many have said that the homeowners in foreclosure should take responsibility and not receive any bail-out help Federally. It’s time that everyone realize that this doesn’t just effect those homeowners losing their homes, it effects Read more<\/a><\/em><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

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 scheduled to jump significantly higher. […]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","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":[8,26,5],"tags":[],"class_list":{"0":"post-2251","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-investment","7":"category-lending","8":"category-real-estate","10":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1828,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1828\/sub-prime-borrowers-got-lucky-they-didnt-pay-enough\/","url_meta":{"origin":2251,"position":0},"title":"Sub-Prime Borrowers Got Lucky- They Didn’t Pay Enough","author":"Brian Brady","date":"August 20, 2007","format":false,"excerpt":"I floated an idea about a federal bailout, along the lines of Chrysler in 1980, of Countrywide Financial Corporation. I wanted to highlight two things in this post: Countrywide is in trouble and their trouble is our trouble. My premise is that the collapse of CFC goes beyond the 55,000\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1855,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1855\/the-new-york-times-goes-on-a-countrywide-manhunt\/","url_meta":{"origin":2251,"position":1},"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":4789,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4789\/deregulation-is-the-new-regulation\/","url_meta":{"origin":2251,"position":2},"title":"Deregulation is the New Regulation","author":"Brian Brady","date":"October 2, 2008","format":false,"excerpt":"From the Wayback Vault in The New York Times Building: Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in\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":[]},{"id":7344,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/7344\/the-subprime-bank-of-america\/","url_meta":{"origin":2251,"position":3},"title":"The Subprime Bank of America","author":"Brian Brady","date":"March 6, 2009","format":false,"excerpt":"Remember those impetuous, ne'er do well subprime borrowers and those greedy subprime lenders?\u00a0 Writing about them is sooo... 2007 but I'm happy to report that both greed and reckless abandon are alive and well today.... ...at Bank of America. Remember Ken Lewis?\u00a0 He's that sober-faced, bespectacled CEO of the Charlotte-based\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":4692,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4692\/promoting-affordable-housing\/","url_meta":{"origin":2251,"position":4},"title":"Promoting Affordable Housing","author":"Brian Brady","date":"September 27, 2008","format":false,"excerpt":"I didn't believe it when I read it; the bailout bill is \"earmarked\" and ACORN is one of the beneficiaries of the largesse. \u00a0 ACORN may control up to 20% of the $700 billion proffered by the Bush\/Obama Bailout Plan. ACORN?\u00a0 Are you kidding me?\u00a0 THIS is what ACORN really\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":[]},{"id":1891,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1891\/instead-of-a-bailout-of-troubled-borrowers-why-not-implement-an-equity-sharing-plan\/","url_meta":{"origin":2251,"position":5},"title":"Instead of a bailout of troubled borrowers, why not implement an equity-sharing plan?","author":"Greg Swann","date":"September 5, 2007","format":false,"excerpt":"Via Poor and Stupid, TCS Daily has a free (or at least free-er) market solution to bailouts for struggling mortgage borrowers. The idea? \"[A] debt-for-equity swap with sub-prime borrowers.\" Borrowers would give up 20% of their downstream equity in their homes in exchange for 20% debt and therefore payment relief:To\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":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/2251","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\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=2251"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/2251\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=2251"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=2251"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=2251"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}