Foreclosure protestors disrupt... PowerPoint presentation
By Matt Carter, Wednesday, March 12, 2008.From an Associated Press story on a protest organized by ACORN at a Mortgage Bankers Association convention at Chicago's ritzy Palmer House.
"... activists, wearing red T-shirts, chanting with megaphones and carrying signs, disrupted a PowerPoint presentation and presented a list of demands, including a foreclosure prevention bill.
'Save our homes!' the protesters, who were from Illinois, Ohio, Minnesota and Michigan, yelled while circling dozens of bankers in suits."
The group, numbering nearly 100, were escorted out by Chicago's finest after about 20 minutes without any arrests (obviously a kinder, gentler police force than the bunch employed by Mayor Daley in the summer of '68, above).
The story said ACORN wants the MBA to "support permanent loan modifications to make home mortgages affordable, ban certain types of payments like option ARMs and require more guidelines for brokers."
Paul Green, the MBA's senior vice president for corporate relations, told AP that the MBA was "disappointed in the actions, particularly since we are always willing to meet with community groups."
I'm sure you are. But meetings don't make for good television.
ACORN -- the Association of Community Organizations for Reform Now -- organized protests last fall at Countrywide offices around the country. Last month Countrywide announced it was partnering with the group on a foreclosure prevention initiative.
And yes, some of you found that a hoot.
All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.
You must login or register to post a comment.
Submitted by Heath Coker on March 12, 2008 - 10:34am.
This one is hard to comment on for fear of acorns dropping on me, but here goes anyway.
I had a customer in my office yesterday who was sure that if banks would loosen up a little, the economy could recover. One of his thoughts was that if the banks lowered the interest rates on poorly performing loans, and also used a 40 year ammortization that many owners could recover. He didn't have any source for his claim that many owners could recover, but it is an interesting idea.
I added that it might also produce some market solidity, because with a home people could afford to live in but not sell, they would not move (or be able to) for a few more years while their market area appreciated back up to the borrowed value of their home. When interest rates adjust back up after the November election, it will also make those lower interest rate loans harder to leave, creating even more long term home owners.
I thought his idea was interesting, and it doesn't assign blame to the borrower who signed the docs, nor to the bank who approved them.
There is a good idea out there somewhere.
Heath Coker, Broker Owner
CapeGroup.com
REindex.com, The Site Engine(sm)
Submitted by Matt Carter on March 12, 2008 - 12:29pm.
Heath, you've hit on the crux of the debate over how to stem the tide of foreclosures.
Some say workouts that reduce monthly payments -- like the measures your customer is suggesting -- are enough.
Others say lenders need to start writing down loan principal or borrowers will walk away.
Freezing interest rates on ARM loans, or lengthening the term of a loan, or other modifications that lower a borrower's monthly payments (or at least keep them from increasing), are ideas that a year ago seemed radical but now have become fairly standard practices (unless loan servicers, in evaluating whether to do a workout, decide that the loan should never have been made in the first place because the borrowers really aren't in a position to repay).
But with home prices falling as drastically as they have in some markets, a workout may allow borrowers to make their payments, but they may not see the sense in keeping up on a loan with a balance that's considerably larger than their home is worth.
That's why we're hearing about proposals that the government buy up loans at a discount from lenders, write down some of the principal, and refinance folks into more affordable loans (not something the Bush administration is willing to sign on to, so far).
There was also a bill that would have allowed bankruptcy judges to write down mortgage principal but it doesn't look like there are enough votes to override the administration's promise to veto the bill.
The only plan that involves reducing principal the administration has seemed interested in came from federal bank regulators at the Office of Thrift Supervision, who suggested creating negative equity certificates that lenders could cash in if borrowers who get a principal reduction sell their houses later on for a profit.
By the way, I'm curious about your belief that interest rates will "adjust back up after the November election."
Are you suggesting the government can dictate interest rates, and is keeping them down for political reasons?
Submitted by Sean OToole on March 13, 2008 - 9:05am.
To just add a little to Matt's comments, I want to re-enforce that payments are not the problem. For the vast majority of foreclosures that we see in CA there is no payment that the majority of borrowers can afford at any interest rate - even zero. Just take the principal balance and divide by 30 or even 40 years, and it is still a non-starter.
Principal balance reductions could certainly work, but how do you possibly apply them fairly. Should someone who bought a house with a 100% financing who didn't take the time to consider whether they could really afford it, or pay attention to what they were signing suddenly get a windfall? Do you still think that is true if it turns out your money market account holds the loan? What about the neighbor who bought at the same time who did pay attention, can afford his home, understood what he was signing, and put cash down? Should he not get the same reduction? And what about the neighbor who has been there 10 years - heck shouldn't they get a check too? Afterall they could have sold for that much the year before. Where exactly do you draw the line, and who should really bear the cost?
Everyone wants to blame the lenders. But we have two problems on that front. 1) If we force lenders to bear the full brunt, who will be willing to lend when this is over? You know this is becoming a problem already if you've tried to get a loan. 2) The "lenders" aren't loaning "their" money, they just sit in the middle collecting fees. It's your savings, money market accounts, retirement accounts, school district funds, etc. that are the real lenders.
Government mandated solutions to this problem are probably coming, but they are likely full of moral hazard which may have unintended consequences.
Submitted by Ki Gray on March 14, 2008 - 4:19pm.
First i dont really understand the people protesting Countrywide for swindling people. Countrywide is retarded. And made a lot of bad business decisions. But I dont think they were trying to fleece people. Why give loans to people that you think will end up in foreclosure. Thats not "evil" its just dumb. Why not go protest in front of Radio Shack for having a bad business model. At the same time I think freezing arms would help the economy but lowering, to some degree, the number of foreclosures.
Site Austin Tx real estate.
Search Austin Homes
Blog Austin Real Estate Blog
Submitted by Joe Cline on March 15, 2008 - 2:34pm.
Agreed. Countrywide is a big loser. Their lending and servicing, in my experience, are poor. Now that the market has seen their incompetence Countryside stock has gone form a 52 week high of $42 to trading at a measly $4 today. I hope no one here got burned by them, but they got what they deserved.
Joe
Austin Texas Real Estate | Tarrytown Real Estate
Submitted by Eric Bramlett on May 20, 2008 - 7:29pm.
>>>>>"support permanent loan modifications to make home mortgages affordable, ban certain types of payments like option ARMs and require more guidelines for brokers."
Lord knows, we can't think for ourselves. Someone, please, quick, legislate some sense into me!
Eric Bramlett
Austin real estate | Austin Condos | Steiner Ranch
Submitted by gomez gomes on January 19, 2009 - 4:29am.
This article is really very excellent one i have seen.Very expressive and truth.
--------------------
gomez
MLS listings