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Adminstrations new FHFA "affordable loan program" as debt peonage

Thu, 07/02/2009 - 9:06pm — lambert

Go read Edward Harrison at Yves place. Just awful.

Honestly, I think it might just be better if I worked the land and sent a percentage of the harvest up the Lord in the castle for protection. Simpler. Cleaner.

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Recourse vs. Non-Recourse

By BDBlue on Thu, 07/02/2009 - 10:06pm

God, I hope people don't fall for this shit. People under water should think long and hard before they refinance. As Harrison notes the result is that you will have a recourse loan. So not only will you not be above water for almost 20 years (or 1/3 of most people's adult lives), but if you default on the loan, they won't just take your house. They will go after every other asset you have, garnish your wages, etc., for the rest of your fucking life unless you're lucky enough to eventually earn enough money to pay them back.*

Basically they're trying to "help" people by giving them the same treatment that got them into this mess in the first place. Only worse because they'll end up with a recourse loan.

Truly awful.

* For those not familiar with recourse and non-recourse loans. One of the reasons why you see so many foreclosures is because first mortgages are non-recourse loans in most states. Which means if you default, the bank takes you're house and your done. (It's not always quite that simple, but it usually is). Refis are recourse loans, which means if the foreclosed home sale doesn't make the bank whole, they can still chase after you.

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"Do what you feel in your heart to be right -- for you'll be criticized anyway. You'll be damned if you do, and damned if you don't. " - Eleanor Roosevelt

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