Feinstein, Villaraigosa urge federal action on foreclosures

Yes some people are victims but the vast majority of people that are facing foreclosure are people who purchased more that they could afford!!! The government should not bail them out of something they got themselves into..This is just another photo-op opportunity for the Mayor to get his face in the papers that he is trying to save Los Angeles..The truth is most people should suffer the consequences for their bad judgment and greed!!!

Mayor Vilar / Raigosa also does his best to destroy the American dream.

What this story fails to mention is how much cash the Simmions took out! People who used their home as virtual ATM deserve what they get. Now home prices are sky high and have nowhere else to go but DOWN!

As an honest licensed lender, I am excited to see that a politician is finally taking action to bring some type of control to this industry. Many times in the last few years I lost clients to dishonest loan brokers who made false promises to these borrowers. Now these same borrowers are coming back to me seeking help with their awful loans and it is too late to do anything. There are way too many "loan officers" who have no business doing loans. Many have no formal training or even a California Real Estate license. I urge you to make sure you check out anyone you do loan business with and make sure they are at least licensed. Lets all hope that some serious legislation takes place so this type of Mortgage Crisis never happens again!

Jay wrote:

What this story fails to mention is how much cash the Simmions took out! People who used their home as virtual ATM deserve what they get. Now home prices are sky high and have nowhere else to go but DOWN!

There are two sides of this story, the people who thought they could either get more house than they could reasonably afford and those who thought they could get money out of an overpriced house through equity loans or refinance. When the market took a dive they were caught with mortgages much higher than the current value of their property.

It would be really nice if everyone could have their own little piece of the American Dream and own a home. The reality is that in today's economy that is just not possible for many folks.

The real culprits here are the real estate people, the mortgage brokers, and bank officers who walked away with their commissions. They should be the ones to pay for the bailout, not the taxpayers.

Truth be Told, the foreclosure chaos and real-estate collapse was caused by too many groups benefitting from writing bad business:

real estate agents/brokers
real estate appraisers
Mortgage originators and re-sellers
arbitrage / hedge funds/ REITS
land/property flippers
speculators
real-estate developers, construction firms, home-builders
Investment firms
retail and wholesale home improvement and supply
politicians

All the ingredients of a great novel or comedy .. lots of different people behaving badly ...

"There's a sucker born every minute" is a phrase often credited to P.T. Barnum (1810 – 1891), an American showman. It is generally taken to mean that there are (and always will be) a lot of gullible people in the world.

However, when Barnum's biographer tried to track down when Barnum had uttered this phrase, all of Barnum's friends and acquaintances told him it was out of character. Barnum's credo was more along the lines of "there's a customer born every minute" — he wanted to find ways to draw new customers in all the time because competition was fierce and people bored easily.

Los Angeles is one great big top with Mr. Villar / Raigosa as its ringleader. There will always be "customers" for either side.

These politician most likely received money from these lender to turn a blind eye. There could have been laws & rule in place to protect the consumer. But now everyone pays for these shady practices.

We need to bring back good ol' assassinations. Villiaragosa is a servant to Mexico. Traitor should be hung or shot. The militias should be mustering right about now.

I felt bad for you Patricia, you are not alone. There are so many people experienced the same like both of you. In related this case, when we think about American dreams to have a place to live when you retired and have pieceful of mind, enjoyed what you have been working hard for life time, but in reality, whatever and no matter how much earn is always gone with the wind. I do not know who's fault is this? Talking about the mortgage, in the begining, people are feeling happy, but only in short time, mostly after they refinance the home that increase the value at that time. Unfortunately, in very short time all the money from refinance, from saving, retirement plan as well are gone or dry out just for paying mortgage interest. At the same time price for almost all commodity such as basic needs: milk, groceries, gas etc increased almost double up while money what you earn increased only very little. So what now, everything were gone, nothing left. Is this the American dream?
In related about refinance, when you are already dry out, of course your payment for anything becoming behind, then you have to pay late charge, fee and bank fee daa...fee etc. The more you run out of money, the more fee you will be getting. In this situation of course will effect your FICO score. When your credit rating downgrading, you cannot go anywhere another word you are in dead or broke getting poor and poorest. The lender or financial institution does not care, because they always see someone credit rating as standard measurement maybe? This condition make some people lost hope and lost participation, no spirit, of course will effect the job and everyday life becoming miserable and lost appetite of everything. We understand that whoever authority in charge is working so hard to help solving this problem. But when this problem can be solve? we need the greenlight as soon as possible.

In related mortgage refinance, some friends has an idea, would that be nice if all homeowner could get chance to refinance in order to safe the home for the family without seeing the Fico score. Let say, combine everything and make one low monthly payment. Who can help us?

As a licensed lender for the past 4 and 1/2 yrs, I have to respond.

1) Regulation of the industry should be mandatory across the board. This includes banks -BofA, Wells Fargo, etc-as well as mortgage brokers. Many people seem to forget that the major bank players also sold people bad loans!
Currently, to be licensed in the state of California you need to pass the R.E. exam. Not an easy test to pass, but has very liitle to do with mortgage financing.

2) I do NOT feel sorry for a great deal of the people in trouble, for many of the reasons already stated here-using the home as an ATM, taking money out to "invest" in properties during the height of the market, these were not necessarily the best ideas were they?
In addition, I had clients that I turned down for loans because they simply couldn't afford to buy, and they went down the street to the "crooked" mortgage originator who would approve them.

Where is the personal responsibility??? Granted there were and still is crooked loan originators, but where does personal accountability for reading what you are signing, and asking questions before moving forward step in???

This whole mess is a cumulative cluster with plenty of blame to go around:

Wall street investors who wanted more return on their investment and agreed to buy new Mortgage Backed Security instruments.

Lenders/Banks who came up with these god awful-no holds barred- loan programs that any one with a pulse could qualify for, all so they could reap bigger returns when they sold them to the greed wall street investors.

Mortgage Originators with no training or ethics who were told "go get loans" and "don't sweat the details" and were encouraged to make as much money as possible
A true professional loan originator takes the time to go over all available options with their clients, looks at their overall financial goals and works with the client to decide which loan program makes the most sense. Problem is, most people are only concerned with the lowest rate, so don't take the time to listen to what a professional is suggesting.

Unrealistic home buyers who thought they really could buy or refinance a house with a 1% interest rate when if they took the time to read the business section of the paper, would know what actual rates were going for. Who truly believed that they could afford to purchase a 1/2 million dolar hom3 while working at Mcdonalds.

Stop rewarding bad behavior and get this mess cleaned up!!!!

Please consider these facts:
The so-called Fair Credit Reporting Act is one, if
not the only, law in America that DIRECTLY EFFECTS
EACH AND EVERY CITIZEN as well as EVERY BANK,
RETAILER, GAS COMPANY, MORTGAGE UNDERWRITER, etc who issues credit.
Please consider the seriously detrimental effects of the way this law is written.

If someone defaults on a debt for any reason
including unemployment, death in the family, unexpected illness, accident, etc then this is what happens and what the choices are:

CHOICE #1: Don't pay anything on a bad debt and
it will simply go away in 7 years
5) CHOICE #2: Start making payments, it could
easily take 4 years to pay off the debt and cost
thousands of dollars (granted this was their debt)
6) THE REWARD: 4 years payments and negative
credit penalty
7) THE BIG BUNUS REWARD: 7 more years of negative
credit!! Yes, for being responsible and paying off
your debt you are now rewarded with an additional 7 years of negative credit reporting. A total of 10 years of penalty versus 7 if you do nothing.

Why? Because the FCRA is seriously flawed
and needs to be amended, that's why.

Remember what started this could have been involuntary unemployment, a sudden illness, the death of a spouse or possibly a car accident. Yes this law punishes people with no regard for the situation or the seriousness of the offense.

The FCRA has a seriously detrimental effect on our society. Why is there a blanket minimum 7
years for every credit infraction regardless of its seriousness? The FCRA removes all incentive for people to accept responsibility.

I have some suggestions for positive changes to this un-fair law.

1) Give people incentive/motivation to accept
responsibility for bad debt by removing any reference to "collections", if 12 months of consistent payments are made.

2) 30-day late payments should be removed in 2
years, if the account otherwise remains in good standing.

3) 60, 90, and even 120-day late references should
be removed in 4 years, if the account is brought
current and kept current.

4) If a bad debt is paid in full with a one time
payment, then report the account as paid, leave the late reference, but remove the "collection"
reference. Remove it completely in 3 years.

I believe there is a provision in the FCRA for
military service, however, it should go further to
include...
5) If a person has 2 forms of proof that they were
unemployed or a spouse died, then they should be
given a clean credit report in one year if they can make 12 months of regular payments.

I'm sure the overall language is not quite this
simple but you have to start with the basics and Senator, time is of the essence. Every citizen, and all America, needs your action.