Loan modification defaults soar 24%, can-kicking fails

By golfplan18   Follow   Mon, 26 Nov 2012, 7:11am   383 views   4 comments
In Irvine CA 92620   Watch (0)   Share   Quote   Permalink   Like (2)   Dislike

Whenever I make a prediction that goes against the conventional wisdom, I take the risk of looking the fool. On those occasions when I am right, it’s very satisfying. Even though I know I shouldn’t, internally, I enjoy a silent I-told-you-so.

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  1. Oil Can

    21 threads
    Oil Can's website

    1   7:12am Mon 26 Nov 2012   Share   Quote   Permalink   Like (2)   Dislike  

    We are no longer kick cans, we are kicking septic tanks.

  2. Goran_K

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    31 threads
    Laguna Beach, CA

    2   7:38am Mon 26 Nov 2012   Share   Quote   Permalink   Like (2)   Dislike  

    This is well known. Modded loans have a very low cure rate. Most of them re-default because the core problem has never been solved (i.e - lack of income, too much debt burden).

  3. bmwman91

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    40 threads

    3   10:43am Mon 26 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    It SOUNDS like a lot, but you have to remember that this is a 24% increase in default on privately-held loans, not ones from GSEs. So, it's a 24% increase on what, 10% of loans?

    The article DOES mention that there is a gigantic pile of modified GSE loans that are not quiiiiite old enough to be re-defaulting, so maybe the bears will get another kill, who knows.

    If the public buys the media tripe about a housing "recovery to 2006 levels" though, it doesn't matter. Prices will rise, ponzi HELOC extraction will continue and the can will be launched, not kicked, down the road further. When all of these loans do finally default, Blackstone and other major players will be accustomed to buying entire city blocks at a time and they will ensure that cheap housing is never available to people. Sorry to be bleak about it, but now that the finance industry is starting to get a taste of outright owning people's shelter, I think that they will develop an appetite for it and we are entering a new era of greed, grift and graft. Sweet alliteration, no?

    If you haven't read Griftopia, or any of the other published books that cover the debt explosion from the 1990's through 2008, you need to. I think that far too many people in here vastly underestimate the unbelievable combination of greed, cunning, outright callousness and intentions of the finance sector. You need to be aware, know that the government is NOT on your side (hell, not even on your planet) and adjust your plans accordingly. It's manageable, but you need to know the rules of the game, and more importantly, how to avoid playing altogether. It's a "game" in the same way that going to the coliseum was for Roman might "win" but it turns out that you are just an expendable tool being used for others' pleasure. Figure out how to keep out of the coliseum!

  4. bubblesitter

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    11 threads

    4   12:12pm Mon 26 Nov 2012   Share   Quote   Permalink   Like (1)   Dislike  

    Pretend and extend. Let's get to worst from bad!

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