Fannie Mae Wants Consequences for Strategic Default


A few weeks ago, Fannie Mae issued an outright threat to homeowners in this country, creating a new rule that would punish anyone who stops paying their mortgage and walks away from their home, referred to as a “strategic default,” by not allowing those who choose that path to get a Fannie Mae loan for seven years.

They call it their “Seven-Year Lockout Policy for Strategic Defaulters,” and if you haven’t realized it already… look what’s been accomplished here: Homeowners have scared the heck out of industry giant, Fannie Mae.  I mean… these guys are shaking like leaves, absolutely running scared.  I know homeowners have been feeling like they have no power against the bankers, but this should prove otherwise.  It’s like we pushed the bully, and the bully ran home and got his Mom to come lay down a new rule in response.

On Fannie’s Website, Terence Edwards, Executive Vice President for Credit Portfolio Management has the following to say about the new rule:

“Walking away from a mortgage is bad for borrowers and bad for communities and our approach is meant to deter the disturbing trend toward strategic defaulting.”

Bad for borrowers, Terrence?  Really, how so?  Are you trying to say that people who walk away from their underwater mortgages are doing it because it’s bad for them?  Because I don’t think they think that, Terence.  I’m pretty sure that those that choose to walk away from their mortgages do so because they’ve figured out that it’s better for them… in their own best interests, as they say.

Hey Terrence, you disingenuous prick, I understand that my walking away from my mortgage is bad for you, but that’s only because my house is now worth half of what I owe.  You wouldn’t mind if I walked away from my mortgage if I had equity, right?  So, in other words, you want me to lose the couple hundred grand instead of you, does that about sum up your position here?  Yeah, well… I’m sure you do.  But I, on the other hand, would prefer that you lose the money instead of me.  Sorry about that.

Terrence, last I checked you’re just a giant failed mortgage lender who is as much a part of why we’re in this mess as any, and you’re going to need $1.5 trillion in taxpayer dollars to bail you out.

I’m a taxpayer, Terrence… isn’t that enough of a loss for me to take on your behalf?  You want me to contribute my tax dollars and probably my child’s future tax dollars to your $1.5 trillion bailout.  And on top of that, you also want me to eat the loss of a couple hundred grand on my house?

Geeze… when are you guys planning to kick in on this?  Your CEO gets a $6 million a year salary, I looked it up, and best I can tell he gets paid to say “yes” to just about everything.  I don’t know, Terrence, but I’m pretty sure that I could have bankrupted Fannie Mae for a lot less than $1.5 trillion.

Walking away from a $500,000 mortgage on a house that’s now worth $250,000 isn’t bad for the borrower, it’s good for the borrower… it makes all the financial sense in the world, for the borrower.  I mean, would you recommend that someone hold onto a stock that’s lost half its value.

Then you say it’s bad for communities, Terrence, why do you think that’s the case?  I mean… bad is a relative term, wouldn’t you agree.  And, in terms of doing bad things to communities, aren’t you guys at Fannie Mae pretty much the poster children?  Like if the Olympic Games had a “Damaging Communities” event, wouldn’t you guys at Fannie be like the Michael Phelps of gold medalists, at the very least?

Yes, I’m afraid you would at that, Terry my boy.  You guys are responsible for wiping out more communities than say… I don’t know… Joseph Stalin comes to mind.  So does the bubonic plague.  So, now you’re all of a sudden so concerned about my community, are you?

Terry, my home appraised at the peak of the insanity at $925,000.  Last week, we heard there was a short sale about eight homes down from us.  Any guesses, Terry?  Well, I doubt you’d come close to $360,000 Mr. Fannie Mae spokesperson and executive VP.  I bought this house in 1990 for $340,000 you insensitive jackass.  Your incompetence has cost me a fortune.

You and your peers owe me money… or at the very least an apology… or something else, but how dare you attempt to “punish me” should I decide to become a productive member of society sooner by choosing not to take $300,000 and set it on fire.  And what would you like me to do, Terrance, if I spend the next twenty or thirty years paying for this house only to find out that I’m still under water by some amount at that time?  Any thoughts on that, you housing genius?  Maybe, try to do better in my next lifetime, Terrence?

How exactly will my strategic default harm my community?  How exactly, Mr. Edwards?  Because I’m thinking two things here:

One… If I let the home go into foreclosure, it’ll be an REO and the bank will resell it at the market price, or maybe a little below.  But, no one is going to give it away for free, right Terry?  The market price is the market price, right you mumbling mathlete?

If I’m allowed to short sale it, maybe it will sell for a little bit more, but then again, it might not sell at all, in which case I’ll still end up in foreclosure, but I won’t be able to stay in the house, saving money as a result of not making payments, while I pay a lawyer to prolong my free stay for as long as possible.  By the time I walk away, I’ll have maybe $100,000 saved up, which will make moving and renting an absolute breeze… to say nothing of my mental state, much improved as a result of controlling my destiny and screwing you.

Two… a strategic default only creates a foreclosure, and if you were so concerned about the impact of foreclosures on communities, we wouldn’t be in the situation we’re in today.  I hope you’ll forgive me if I laugh at you feigning concern about how foreclosures affect our communities.  I’ve been watching quite a few loan modifications up close and personal, and I haven’t seen Fannie Mae lift a finger to help a single homeowner.  Banks are abusing homeowners left and right, every single day of the year, with the exception of a few who take Christmas off, and where has Fannie Mae been?

Now that I finally decide to take matters into my own hands, in the best interests of me and my family, now you’re going to try to punish me, you worthless piece of trash, how dare you?  Go to hell, Terrence Edwards.  You’re an insolent punk for saying what you said, for trying to scare homeowners who are trying to survive this inconceivable catastrophe that you and yours created.  You’re an empty suit hiding behind some overpaid government job, nothing more.

You, of all people, claiming that strategic defaults are harming communities is absolutely hysterical.  Like cautioning people to take an umbrella when going for a walk into the eye of Hurricane Katrina.  Don’t forget your umbrella… you wouldn’t want to get wet.  Yeah, thanks for that advice.

Your approach is to “deter the disturbing trend” towards strategic defaulting?  Is that what you said?  Well, that’s the best damn news I’ve had in at least three years.  You and the rest of the self-important louts at Fannie Mae are actually disturbed by something.  Well, thank the good Lord, I am glad to know that.  Because you certainly haven’t seemed very disturbed at the carnage that’s been destroying the housing markets to-date, Mr. Terrence Edwards.

If strategic defaulting is disturbing you and Fannie Mae in general, well then that’s just about the best reason I could possibly think of for doing it.  You talked me into it, Terrence, and God willing quite a few others in this country whose lives have been ruined because of Fannie’s ruinous policies and incompetent management.

And then, as if Mr. Terrence Edwards hadn’t said more than enough, he went on to say:

“On the flip side, borrowers facing hardship who make a good faith effort to resolve their situation with their servicer will preserve the option to be considered for a future Fannie Mae loan in a shorter period of time.”

On the flip side?  The flip side?  I swear, someone needs to give you such a slap.  On the flip side, you actually have no idea what you’re talking about, do you?  You think people are walking away because they didn’t talk to their servicers?  You think, in that distorted little brain of yours, that it’s homeowners who need to act in “good faith” more often?

Well, that’s it for me.  I don’t know what to say in response to that, except to say that I can’t believe Terrence Edwards has a management job anywhere, let alone at the world’s largest source of lending.  After a statement like that, this guy should be asking women if they’d like to see something in a pump or a loafer.

Homeowners aren’t the ones failing to act in good faith, Mr. Ed.  Homeowners would all try to work with their servicers to resolve something in good faith.  Homeowners, and I’ve personally talked at length with thousands of them, have “good faith” written all over them.  They exude it from their pores.  That’s why they didn’t storm the castle when you and the other banksters needed to be bailed out after you guys decimated the global financial system.  But… on the flip side… their servicers consistently, and by that I do mean all the damn time and every damn day… continually lie, intimidate, bully, flagrantly break promises, and exhibit a lack of caring that would make Mary Poppins look like Dr. Mengele.

Are you unaware of this, Mr. Ed, you horse’s ass?  Has this somehow escaped your attention?  Missed it?  Busy watching the World Cup or something?  Come on, no way… you know exactly what’s going on between servicers and homeowners out there, and if you really don’t, well then you most certainly should.

In the spirit of leaving nothing to chance, allow me to explain how this whole mess happened.  We, the taxpayers, sat by and watched our elected representatives bail out Fannie Mae, and every other bankster in the country, we sucked it up and then watched Goldman et al, pay out $120 billion in bonuses last December.

Our President said he had a plan, and that banks would modify loans… there was hope.  But there wasn’t, was there, because the banks and servicers proceeded to treat homeowners like something stuck to the bottom of their custom made shoes.  They lied all the time, like constantly.  They bullied and made people feel badly, and in general they proved beyond any doubt that they could not be trusted.

No one is walking away from their home because they weren’t willing to make a good faith effort to find an alternative resolution by working with their servicer.  Never happens, or happened.  And if it has started to happen, which I still don’t believe, it’s only in response to the treatment of homeowners by their servicers. And true to form, the Wall Street Journal writes a story about homeowners happy about their decision to strategically default, some other news program interviews someone going to Hawaii as a result of not having to pay a mortgage payment, and you… you don’t bother to find out what’s really going on… you start with the threats.

Here’s what you said on Fannie’s Website:

Fannie Mae will also take legal action to recoup the outstanding mortgage debt from borrowers who strategically default on their loans in jurisdictions that allow for deficiency judgments. In an announcement next month, the company will be instructing its servicers to monitor delinquent loans facing foreclosure and put forth recommendations for cases that warrant the pursuit of deficiency judgments.

 

Troubled borrowers who work with their servicers, and provide information to help the servicer assess their situation, can be considered for foreclosure alternatives, such as a loan modification, a short sale, or a deed-in-lieu of foreclosure. A borrower with extenuating circumstances who works out one of these options with their servicer could be eligible for a new mortgage loan in three years and in as little as two years depending on the circumstances.

 

Oh, so let me get this straight… a Deed in Lieu, a short sale… those are just fine in your mind, but a strategic default is bad for borrowers and bad for communities.  Do you hear yourself?  How would a Deed in Lieu be better for the community, Mr. Edwards?  Never mind… you don’t know.

However, in your top paragraph above, you are saying that you’re going to go after deficiency judgments in states that allow deficiency judgments?  Well, goodie for you.  But, does that mean that you won’t go after deficiency judgments in states that allow them if the borrower simply attempts, in good faith, to work it out with his or her servicer, but fails?  I doubt it, don’t you Terrence?

And you’re going to ask the servicers to “put forth recommendations” as to who should be pursued for a deficiency judgment?  The servicers?  The group of companies and individuals that have, perhaps more than any group in history, proven that they cannot be trusted to follow rules, keep promises, or tell the truth.  I suppose they will also be the final arbiters of whether the homeowners attempted to work it out in “good faith,” as well.  Yeah, that’s about right actually.  Par for the friggin’ course.

Well, I’ll tell you what, Mr. Terrence Edwards.  You think you can threaten millions of American homeowners?  Why you would presume to have such authority is beyond me, but I’ll promise you this… you’ve certainly motivated me in a big way.  How many homeowners do you suppose I can reach through my 300,000 readers if I try really hard?  Because that’s precisely what I now am more committed than ever to doing.  Just because of you and your threats.

What was the threat anyway?  Oh yeah, those that you or the servicers deem strategic defaulters won’t be allowed to get a Fannie loan for 7 years, but the “good faith” people… which I would guess are those who agree to whatever their servicer demands, might get one in two or three years.

First of all, who cares about getting another loan in 2-3 years?  No one I know.  But even more to the point, what in the world makes you guys at Fannie Mae think you’ll be around in seven?

Mandelman out.

Comments

  1. kindandgentlejd says

    Well done! Lets not bs ourselves on this. Homeowners are in control. Just double the numbers of strategic defaulters or just people not paying their mortgage and watch the financial system collapse before your very eyes. What I find offensive is that most homeowners SHOULD NOT be talking to their servicers. If they took out stated income loans, if they work with their servicer they may be giving financial information that they can use against them to circumvent anti-deficiency laws (i.e. fraud) or bankruptcy. It is not just a strategic default, each time a consumer talks to a servicer or their lender they are giving information to be used against them. We have seen servicers demand consumers cash in their 401k's, IRA's to make their loan payments all at great tax risk and even in a bankruptcy the court could not order that and they would be protected.

    Great job on this article. THEY (FNMA, FHLMC and the banks) need us. You have shown the power. THEY will not recover if they do not have borrowers and locking them out only shoots them in the foot and we are left with plenty of housing inventory to rent for less than a payment. Their brilliance makes me yawn.

  2. lotzahomes says

    Telling someone if they strategically default they won't get a home loan for seven years, is like telling someone that files bankruptcy that they won't be extended credit for 10 years. And we all know how that works, right?
    What a friggin joke! When the dust settles, they'll be begging anyone with a job to take out a loan for a house. THEY NEED US! Personally, after what these banksters have perpetrated on the American homeowner...renting for the rest of my days looks a lot more appealing, and certainly much more prudent.

  3. ChrisSorensen says

    I'm not sure we are doing our Country any good by all of us who are upside down are encouraged to walk away. After all, Fannie and Freddie are dead. It is America and its tax payers who are going to be left paying for the loss incurred.
    We're in a war; it’s a financial war, but a war nonetheless. We need to vote out any elected official, regardless of party affiliation who received and accepted donations from the Banks/Wall Street Investment Firms in the last three years at a minimum. Then we need to put back in place the protection we had prior to the late 90's. Then, slowly dismantle the biggest banks and put the smaller, better managed banks in charge of their portfolios.
    Martin, you know I love ya, but I encourage those who are simply postponing the inevitable to get out and encourage those of us who can still afford our homes to keep paying. I know that most understood that the loan they took out was made to them regardless of whether or not the value went up or down. It was a loan for ones shelter and we agreed to pay it back. True, we all have been screwed. So what’s the answer? Take down the free markets financial system so you can get even?

  4. marianne says

    If every homeowner walked away from their home now as opposed to later (when they find out the house they bought 25 years ago is underwater too), it would be as if the town bully all of a sudden got a beating from all the town's people. Mom then would be too scared to bail out her son and they'd have to disappear from town for good.

  5. mandelman says

    Chris, you're just wrong about this. Simple as that.

    First of all, I don't know which planet you live on, but in this country you couldn't find three elected officials who didn't accept donations from the financial sector even if you went back 30 years and I let you include dead people.

    Secondly, there is no proposal, movement or discussion with even the slightest potential to put back any protections that were in place prior to the late 1990s. I understand this is a fantasy of yours, and Lord knows I love a person with imagination, but the only way what you describe will happen is if Harry graduates from Hogwarts, runs for office, gets elected and puts a spell on Congress. I suppose that could happen... at least it's a lot more likely than what you're proposing.

    Thirdly... Okay, are you seriously thinking that it's even remotely possible that we will in any way "dismantle the biggest banks and put the smaller better managed banks in charge of their portfolios?" Oh my God...

    Chris, you need to lie down, avoid loud noises and bright colors. Don't drive yourself home. Stay where you are and I'll come pick you up and take you home, if need be. Try small sips of room temperature water. It's okay, I'm sorry I made the joke about Harry Potter... I didn't realize. You're right, buddy... you're absolutely right... and I'm sure we will do just that... dismantle the biggest banks and let the smaller and better managed ones take over their portfolios. Just like you said... relax buddy, everything is going to be fine. I'm calling your wife now... It's okay, just close your eyes... don't give it another thought... everything is fine... shhhh... shhhh...

    Fourth... We did NOT agree to pay anything back when we signed our mortgages. We agreed to make monthly payments OR give back the house. It has nothing to do with whether the value went up or down. Even if the value went up, we'd still be allowed to give back the house and stop making the payments. Corporations make decisions to walk away from such contracts all the time, and there's nothing wrong with them doing it either. Those are the terms of the mortgage contract. Stay and pay, or leave and don't pay.

    Morgan Stanley walked away from several billion in mortgages this year, as did the Mortgage Bankers Association... and many, many others. There is absolutely nothing wrong with walking away from a mortgage... ever... assuming your give back the house and the land on which it sits.

    Remember, as long as I have a mortgage... I own the equity... the bank owns the property.

    Fifth... Walk me through your thought process of how my walking away from my mortgage has the potential to "take down the free markets financial system." Start with pointing out the "free markets financial system," would you please? I know a lot about the financial system in this country and what you're describing certainly isn't here, so where is this "free markets financial system," of which you speak?

    It sounds marvelous, and I would probably like it and not want to ever take it down. I just don't know where it is... but show me and maybe I'll move. Is the weather nice there... do they breathe oxygen like we do?

    Now, if you were trying to describe this country's federally supported, central banking led, and taxpayer subsidized financial system that is unencumbered by pesky accounting regulations, how in the world would people walking away from their mortgages take anything down? Haven't you been paying attention to what's been going on around here... there's nothing that can take our financial system down... period. If we've learned anything since 2009, I'd say that would have to be it.

    That's what TBTF... too big to fail... is all about. Heck, our entire financial system is completely insolvent and has been for two years and it not only didn't come down, but it gave out more in bonuses, almost $200 billion in total... more than any year prior! More than during the peak of the bubble. The top five gave out $120 billion in bonuses all by themselves.

    So, nothings coming down because we decide to walk away from our underwater mortgages... you can relax if that's what you were concerned about, 'cause there's no possibility there.

    In terms of impact, there's no difference between a strategic default and a foreclosure, and since no one in banking or government is too concerned about the 7 million foreclosures we've had to-date, or the 14 million that Goldman Sachs forecasts are still to come, why are you all worked up worried about strategic defaults? In fact, USA Today just published a list of the 8 factors that could lead to a "double dip" recession... and foreclosures didn't even make the list.

    Now, you said at the beginning of your comment that you were "not sure what good we would do for our country by walking away from underwater mortgages or upside down mortgages." And I commend you for raising your hand and admitting it when you don't know the answer to something. Allow me to explain... and feel free to take notes if you wish...

    By walking away from our underwater mortgages we stop paying for air... evaporated equity, and that way our hard earned dollars can start being spent in ways that adds value to the broader economy and delivers value to our families. Paying hundreds of thousands of dollars for AIR is doing our families a tremendous disservice, in fact it's no different than you cashing your paycheck every two weeks, and then taking half of it and setting it on fire. Would that be fair to your family, your children, your wife? Would that be the right thing to do to protect and ensure their secure futures?

    It's also no different than bankruptcy, which is one of the key things that makes our country great. When you find yourself buried in debt, should you sacrifice your family's quality of life and future potential to work around the clock for a decade or more to pay off your debts? Or should you file bankruptcy and have those debts discharged, so you can get a clean start and start working for your family's needs again as soon as possible?

    Bankruptcy is what makes America great. Our Founding Fathers came here to escape lands with debtor's prisons. They had seen how wrong that system was, and how it harmed society to treat debt as unforgivable.

    Our bankruptcy laws are what allowed our nation to be forged by people willing to take risks... entrepreneurs... that, because of bankruptcy, could take the risks that gave the world the greatest country in history in terms of innovation and economic might, without which we would all be living under tyranny today.

    Your misplaced ideas of morality that would "encourage" someone to remain in a mortgage so far underwater that paying it would only line the pockets of a handful of rich and powerful bankers, instead of moving on and returning to a life of productive contribution to society as a whole, are un-American, inconsistent with the law and language of the mortgage contract, and ultimately harmful to the children whose future depends on parents that act in the best interests of the family.

    I hope that cleared things up for you on the issue of strategic default, and don't feel badly about having been wrong. The important thing is that now you know, and you can stop "encouraging" people do things that are harmful to themselves and their families.

    Your welcome...

    Mandelman

  6. beachgo says

    Great article. Homeowners look out for yourselves, Washington and lenders have nothing to offer you except B--S---.How many of these trial modifications have been based on unemployment benefits? Now you want to take those away from homeowners? That only spells one word to me DEFAULT.Many here in my state who were cut off don't even have money to put food on the table never mind make those TPP payments. You lazy homeowners get out there to work. All that time you spent sending your documentation over and over and over again to your lender and on hold waiting for someone in their office to pick up, you could have found employment. JOBS????????????????????? You IDIOTS in WASHINGTON. If even half the money that you have spent to bail out lenders had gone into the pockets of citizens across this country things would have been different. Mortgages would have been brought current,along with any other bills. The economy would have turned around because spending would have improved. What's your next plan Washington?? Yes the HOMEOWNERS across this Nation want to hear from YOU, NOT THE LIES THAT CONTINUE TO FLOW FROM THE MOUTHS OF LENDERS.MR.PRESIDENT the American people have played the game.The cards are on the table now, so it is hard for any of them to BELIEVE a word from WASHINGTON at this point.

  7. marianne says

    Do your homework and you'll l find out what you got was not a loan , but money that already belonged to you. The banks took you for a ride and then dumbed you for dead. You know what's wrong with our country or any other for that matter? the sheeple are not informed and can't see the real story beyond the length of their noses, and think that be just getting rid of some of the people in office it will fix the problem. There is no such thing as Democratic and Republican party. They don't exist! They all work for the same master and it's not you and me. Don't get back to me just go online and start researching. The secret of Oz on youtube may open your eyes a little from there jump to other eye openers until you get the truth,"and the truth shall set you free'.

  8. ChrisSorensen says

    Martin, I guess I'll change my approach now and tell everyone I meet to walk away from their home regardless of the circumstances. After all, we are all victims.

    You have never once spoken to me on our countless phone calls or face to face meeting this way, so why do it here? I was under the mistake of thinking we had become friends, or at least friendly. I'll avoid offering input or opinion unless it echoes yours 100%.

    Disagreeing with you or having a unique opinion on some of the subtleties of what individuals should do or not do is not worth being attacked so that you can charm your audience with your wit.

    Being clever and intelligent doesn't automatically make you correct. In some circles, it just makes you a bully and this is why those who you could have at one time actually impacted now simply dismiss you as one who enjoys hearing himself rant.

    Why should anyone pay on their mortgage? In what case should someone honor their written agreement? I'm sure you'll make more fun of me, but I won't know it since I'm not allowing this site to send my anymore updates. If you care to call or e-mail me, that's fine.

    God bless and good luck in your endeavors.

  9. Steevo says

    Oh for god's sake.

    The problem is *Fannie Mae*!

    With them involved there has been a fundamental change in the way the banking and financial system works.

    It used to be grandpa would put his money in the bank. When you went to get a loan to buy a home or whatnot the bank would loan you grandpa's money.

    The bank had to loan out grandpa's money because if they didn't they wouldn't make anything. They made money on the margin and the float, it's how banks worked.

    It was no accident the owner of the local bank was usually the wealthiest man in town!

    This was all highly profitable and there was little risk to the bank because you had to pay a down payment and hopefully your house was always worth more than the loan.

    The banker was careful to loan to credit worthy people since he would have to pay the money back to grandpa if he screwed up. But this almost never happened.

    Nowadays, the bank doesn't loan you depositors money at all.

    Loans have to be made to meet Fannie Mae standards, a Fannie Mae appraisal, etc. They sell them all off packaged to Fannie Mae, and they get their money back right away. They presumably keep a fee for making and packaging the loan but this is all kept in the shadows. You are not supposed to know about it.

    So banks aren't really banks anymore. They don't loan you their money or even their depositors money. They don't make money off the float and margin, they make it from fees. The banks are essentially money changers, not banks. They take money from here and put it over there. Over time they put it back but if something happens they have no real liability at all.

    Witness the guy from Fannie Mae wants to blackball people who don't pay back their loans. Fannie Mae must have to stand up for that money at some level. You don't see the bank saying that, do you? They don't really care. They already got paid and passed the liability off to Fannie Mae.

    No wonder there was all those reckless loans being made. Remember all the ads on the radio? "We'll loan you 125% of your home's value". The banker couldn't do that, it was too risky with his money or grandpa's that he was responsible for.

    But with other people's money? Why not!

    So the mortgage salesman works on commission, the mortgage company gets commission, The managers and the owners are all on bonus programs. everyone gets theirs up front.

    No wonder they wanted to loan more than the property was worth, they had no liability at all, they got paid up front for making the loan even if there was a first payment default.

    If the banks were forced back into the banking business there would be an immediate straightening out of the whole economy. You wouldn't be able to get a loan unless they were pretty sure it was either covered or you would be able to pay it back. Loans would be based on real money that someone is responsible for.

    Somehow that makes sense to me.

    What do you think?

  10. EGalindo says

    Loved your post, Martin, I laughed 'til I cried. I like your answer to Chris, also. Although I do understand his thinking...it's old school...like it should be. We should honor our commitments and do the "right thing." Problem is, the banks have ceased doing the right thing.

    In our case, our contract was not honored and they have the financial clout to tie us up in court for years. They promised us a modification, because our government forced them to. Then they proceeded to lure us into default by giving us a "temporary modification" that they then turned into a default...(we all know how that story goes).

    In the old world we would have taken on another job or two to meet our obligation, but then, the bankers would have worked with us...in the old world. Let's face it, all it takes for evil to prevail is for good men to do nothing....

  11. Bruce Broyles says

    Every time I am in front of a Magistrate. one of the rote messages provided to the Homeowner is that there is nothing evil or wrong about the Bank enforcing its contractual rights. In Law School. the "contracts" professor stated that contracts are simply so the people know their rights when deciding whether to breach the contract. If every contract is fulfilled their would be no reason to have it written down.

    Homeowners are not doing anything that is ethically, morally or legally wrong. Homeowners are simply weighing the benefits of the contract versus the harm that could occur if the breach the contract.

    Fannie Mae can make new rules for the extension of credit. But haven't we already seen that Fannie Mae is really there for the protection of the Banks, and the Banks have taken advantage of Governmental guarantees. If banks will only loan to those who are able to obtain a Fannie Mae guaranteed loan, and the number of those Homeowners decreases significantly, then the banks will eventually pressure Fannie Mae into changing the criteria.

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