Your Questions About Foreclosures |

Your Questions About Foreclosures

Your Questions About Foreclosures

William asks…

Please Help Me With My Homework, i dont understand ;(?

Historical Context:
Following the economic boom of the 1920s, the United States entered a period of prolonged economic depression. Known as the Great Depression, many citizens of the United States were greatly affected by it. During the Hoover and Roosevelt Administrations, several economic initiatives were developed to limit the effects of the Great Depression and allow the American economy to prosper once again.
Using information from the documents and your knowledge of United States history and government, answer the questions that follow each document. Your answers to the questions will help you write the essay, in which you will be asked to:

1. Describe the economic problems that existed during the Great Depression.
2. Discuss the strategies used by Herbert Hoover and Franklin Roosevelt to deal with these economic problems.
3. Evaluate the overall effectiveness of the economic programs initiated by Hoover and Roosevelt
Document 1:
New York Times: Stocks collapse 16,410,030 share a day but rally close cheers brokers;
bankers optimistic to continue aid. 240 issues lose $15,894,818,894 in month; slump in full exchange list vastly larger. (October 30, 1929. Page 1, columns 6-8.)

1. According to the New York Times, what happened to the value of the American stock market in October 1929?

Document 2:
“…Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means
of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone… Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely … It can be accomplished in part by direct recruiting by the
government itself … but at the same time, through this employment, accomplishing greatly needed projects to stimulate and reorganize the use of our natural resources.
Hand in hand with this, we must … endeavor to provide a better use of the land for those best fitted for the land. The task can be helped by definite efforts to raise the
values of agricultural products and with this the power to purchase the output of our cities. It can be helped by preventing realistically the tragedy of the growing loss through foreclosure of our small homes and our farms. Finally, in our progress toward a resumption of work we require two safeguards against a return of the evils of the old order; there must be a strict supervision of all banking and credits and investments; there must be an end to speculation with other people’s money, and there must be provision for an adequate but sound currency.”
-Franklin D. Roosevelt, First Inaugural Address, March 4, 1933

2a. According to Roosevelt, what problems did the United States face in 1933?
2b. What solutions does Roosevelt propose to end these problems?

Document 3.
“… Republicans followed a trickle-down theory… They reasoned that, if government legislation protected the wealth of big corporations and the well-to-do, their continued investments would expand the economy and a better life would ‘trickle down’ to workers and consumers in general. FDR and his advisors viewed things differently. They felt that government would use pump-primingthat government should take actions that would make the consuming public secure and optimistic… By increasing government programs, business activity would increase, thereby fostering consumer confidence and investment keeping the economy growing…”
-United States History & Government: Constitutional & Geopolitical Patterns, 2001

3. Why did President Herbert Hoover follow a trickle-down theory in order to combat the Great Depression?

Document 4.
Tennessee Valley Authority (TVA) (May 1933): The TVA helped farmers and created jobs in one of America s least modernized areas. Reactivating a hydroelectric power plant provided cheap electric power, flood control, and recreational opportunities to the entire Tennessee River valley. Works Progress Administration (WPA) 1935-1943: This agency provided work for 8 million Americans. The WPA constructed or repaired schools, hospitals, airfields, etc. Decreased unemployment. Farm Security Administration (FSA): The FSA loaned more than $1 billion to farmers and set up camps for migrant workers.

4.How did the above New Deal programs attempt to solve the economic problems of the Great Depression?

Your Questions About Foreclosures

The Expert answers:

Wow . . . Someone has being doing alot of homework.Interesting what you have wrote there im defo gonna look into this further.

Your Questions About Foreclosures

Chris asks…

Why is no politician noting the CASINO connection to the struggles in the economy?

I know two families, before the current slump, that lost their homes because it was mortgaged due to a gambling. I have heard of three other neighborhood families in the same boat with the tanking of the stock market but they also mortgaged their home due to gambling.

For those of you who are knee-jerk judgmental, that is not the issue. I will get it out of the way for you – gambling, like drug addition and smoking, is not smart to start and becomes an addiction that is horrible to break, if at all p ossible.

Buidling casinos is like putting kiosks on the corner for heroin. The fact is that more people will try it and become addicted. Studies have shown that foreclosure and bankrupty rates increase by ten fold within ten miles of where a casino is built.

There are few studies because people want to simply judge and not address the problem. ( As a social scientist, I see this often. I have places and programs for drug addicts and even sex addicts. But for some reason, everyone wants to tell a gambler that it is their fault and not give help.)

It is my theory that it is ruining the economy. The USA is becoming one big Las vegas.

But the states and cities continue to force upon unsuspecting citizenry and “easy” means of raising state funds (that never go to where the politicians orginally say that they are going) and creating a society with a lot of of gambling addicts that is having a terrible effect upon society.

And no, it is not just poor and black people.
I am glad to see that there are so few answers. It means that most people get it. Only the few holier than thou showed up, who usually have a lot worsethings in theoir closets.

Judging, they are not lookimg at the economic and societal picture. That is why the USA sucks.

Your Questions About Foreclosures

The Expert answers:

Well, if they talked about the problems middle class people have had with gambling and how they had ruined their lives, it would only draw attention to the fact the real casino was in NY and Washington. Lack of regulation which encouraged greed on a major scale went on for years. These manipulators and gamers got filthy rich and then when the bubble burst and fraud began to be revealed, they got to keep their bonuses and life styles courtesy of the taxpayer funded bailouts.

Your Questions About Foreclosures

Carol asks…

Why do people Blame Bush on the Economy when…?

The Community Reinvestment Act (CRA) started this entire mess. If you did not know already, the fall of our banks, housing markets, and the oil crisis in the summer of 2008 lead us to our demise. The Community Reinvestment Act started it all. This Act was passed in 1977 by Congress to address the so-called discrimination by banks, which would not lend money to most minorities. The act provided that banks have “an affirmative obligation to meet the community’s needs.”

The banks were not giving the loans out to minorities because most of them just didn’t have the money to pay them back-but the liberal congress under President Carter thought differently. But this Act was not enough to force the banks to give loans out to everyone. So in 1989, Congress amended the Home Mortgage Disclosure Act which required banks to collect racial data on mortgage applications.

This data all came together in great use when in 1995 the Clinton Administration’s Treasury Department issued regulations tracking loans by neighborhoods, income groups, and races to rate the performance of banks. The ratings were used by regulators to determine whether the government would approve bank mergers, acquisitions, and new branches. The regulations also encouraged liberal-aligned groups, such as the Association of Community Organizations for Reform Now (ACORN) and the Neighborhood Assistance Corporation of America (NACA), to file petitions with regulators, or threaten to, to slow down or even prevent banks from doing their business by challenging the extent to which banks were issuing these loans.

With such great leverage over the banks, many of the liberal groups were able to legally extort banks and make huge pools of money available to them. Then with such power over the banks, the government and groups were able to force the banks to give out loans to individuals who had bad credit or insufficient income. These loans are known as “sub-prime” loans. Most estimates put the figure of CRA-eligible loans at $4.5 trillion dollars lost to the banks…

In 1992 the Department of Housing and Urban Development pressured two government chartered corporations, known as Fanny Mae and Freddie Mac, to buy large bundles of those sub-prime loans for the conflicting purposes of diversifying the risk and making even more money available to banks to make further risky, sub-prime loans. Congress also passed the Federal Housing Enterprises Financial Safety and Soundness Act, which mandated that those companies buy 45% of all loans from people of low or moderate income…

In 1995 the Treasury Department under the Clinton Administration established the Community Development Financial Institutions Fund, which provided banks with taxpayer money to allow the banks to give out more risky, sub-prime loans.

All of these actions turned the sub-prime mortgage market into a huge ticking time bomb that would magnify the housing bust by orders of magnitude… These policies lead to the housing boom which was seen in the 1990’s and early 2000’s. But it all eventually back fired when loans weren’t being paid back. The banks ended up losing more money than they were making – that lead to the collapse of our banks. This also led to the housing market’s demise or BIG bust…

How did this affect the housing market? Well there were no more loans being given out, since the banks finally began to collapse. With no money being given out and thousands of houses going into foreclosure it is easy to see how the housing market went to hell…

As you can see, the liberals caused us the major reason for our demise. All because they believed people had the right to houses. All because they believed high spending and expansion of government would help the poor… It didn’t…

But that was not the only reason for our fall. The high spending from congress led to higher debt and almost no money, which forced us to borrow from China… This debt left us with almost no money and that is why taxes were raised on most middle class families. This spending came from republicans and democrats who believed more government programs would reduce poverty or fix any other problems. It mainly came from the war over seas.

Then came the gas crisis in the summer of 2008. This crisis happened due to the supply of oil being lower than the demand. It was also due to the speculation at home and the raising of prices by the Saudi Arabians. This all could’ve been avoided if President Clinton allowed the oil companies to drill in Alaska. In the 1990’s the companies went to congress for approval, but they were shot down…

Many liberals say we have almost no oil here, but the REAL experts from the oil companies say we have more oil than the Middle East. Who would you trust? Oil company experts or politicians? My point is th
I’d like to see people actually read this answer instead of acting like ignorant idiots.

Your Questions About Foreclosures

The Expert answers:

Because the propaganda you copied and pasted into here is basically untrue.

There was never any sort of legislation to force banks or any other lenders to make loans to unqualified borrowers. The push to do that came from the banks themselves, who were looking for an easy way to defraud people who were inexperienced at home-buying. ∠°)

Your Questions About Foreclosures

Jenny asks…

How about this for a stimulus bill?

I have an idea for a new stimulus plan.. It may be stupid, but I’m just a guy with a high school education so there are undoubtedly things I didn’t think about.

1. Reclaim 100% (With interest) of the money that was paid during the bailout from the banks and automotive manufacturers.

-Based on the census numbers from 1996 (it was as current as I could find), it was estimated there would be 114 million households in 2010. So, in the interest of estimating high, I’ll say there are 120 million now.

2. Take the money reclaimed and create a one-time credit of $100,000 per HOUSEHOLD of taxpayers and dependents. Yes, I understand that this would equal $12 Trillion.

-Each household would mean that even though there may be 3 or more actual taxpayers in the household, the credit would be for that single residence.
-The determination would be based on current physical address that must be verified by proof of recent bank accounts and bills…. we all know the drill.
-This credit would not be issued as a tax credit or cash. It would have to be filed as a claim to a state office where all of the documentation is reviewed and processed. (This could create temp jobs too.)
The credit would be used only to pay off EXISTING credit accounts, car loans, mortgage payments, and other outstanding debt held by members of the household.
-The credit would be equally divided among members of the household or however the members of the household agree. Only ONE claim package will be accepted per household and if multiple are found, then it will be set aside for assessment.
-Should the household not need all $100k, the remaining may be applied to the purchase of a home or split equally among the members of the household and put in their social security fund. Members of the household will not be required to use the full $100k.
-Claims for credit used to purchase a new home must be spent on a home that is on a foreclosure listing and must be used as a primary residence of at least one member of the household for no less than 5 years. Member must be 18 years of age or older and a taxpayer.

3. Members of a household submit a claim for this credit must agree to forfeit any Federal Tax Refunds for the term of 10 years, or until the amount of cummulitive refunds forfeited excedes the amount credited. Whichever happens first.
-Members of a household that make a claim will not be entitled to Earned Income Credit during any year that a refund is forfeited.
-Members that move from one household to another will still be required to fulfill the tax liability agreed to at the time the credit is issued.
-Itemized deductions, and standard tax credits will still be allowed when filing taxes to determine whether or not taxes are due.

There’s a lot more that can be included as this is just the basic idea. The details could be hashed out later.

I believe that even though there will be fraud with a program like this, it will still accomplish the following:
1. Taxpayers will be able to free themselves of excessive debts.
2. Financial institutions will not falter as they will receive the money used to pay off the debts without significant government regulation, but will have to understand that they will be allowed to fail later.
3. The national debt will be reduced in a more timely manner without significant hardships placed on taxpayers. Furthermore, there will be less need for tax increases once the number of refunds has been reduced to a smaller percentage.

I’m not sure that this idea is great, but it was just an idea and I’d like to see what people really think about. So, how about it???
Thank you all so far for your inputs. Like I said, I’m a guy with a high school education, not a master in finance or anything and this was just a thought.

To be more detailed about the tax repayment part, as an example, my family received approximately $5k last year in tax refunds that was OVER what we actually paid. (Not that I minded Uncle Sam handing us the money) I actually had to ask our tax preparer to get a supervisor to recheck the numbers because our refund equalled just over $10k between state and federal. My wife and I had total income of just over $36k the year before. So, that being the case, how many other families received just as much in refunds last year? With my idea, NOBODY will get refunded more than paid into taxes even if they don’t take the $100k.
Part II

So, subtract 50% from the total population of the US,, Multiply that by $100 and then Multiply that again by 10 years…
Dividing the population by 50% is just by uneducated estimate of non-tax paying persons that include children, illegal immigrants, and persons that would get nearly everything back in taxes.

The purpose of a program like this would be 1. Clear consumer debt without killing the companies that own the debt. 2. Give conusmers the ability to spend more on things that they need. And 3. Create a handful a jobs.

Yes, there will be fraud. But no worse than there is right now.

If the banks and everyone have paid off the loans we gave them… well, then this idea is completely dead anyway.

Again, thanks for the input. I’m definately not an economist so I was sure there was going to be a lot of “holes” in this idea.

Your Questions About Foreclosures

The Expert answers:

1. The government already got back “100% (With interest) of the money that was paid during the bailout from the banks”. The banks did not keep any of the money and repaid it all, with interest.

The auto manufacturers do not have enough money for the government to reclaim 100%, or anywhere close to that, with or without interest, from automotive manufacturers.

2. Since the banks already repaid everything, and the auto makers do not have $12 trillion, or anything close to that, there would be no way to get the amount that you suggest.

3. There would be fraud. Many of the applications would have lies. It would take many years to determine how much, if anything, any particular household qualified to receive. The money would not be paid in time to accomplish what you want.

4. Anyone who already has excessive debts would not be freed in time to do any good. They would need to pay the debts before the “credit” was received.

5. Financial institutions would falter, because they would not receive the money for many years, see point 3 about it taking years to determine how much to pay each household.

6. Both taxes and the national debt would increase, because the money paid to banks and auto makers that has not been reclaimed already and can still be reclaimed is not nearly $12 trillion, and is essentially $0 (since the money paid to the banks was already reclaimed and most of the money paid to the auto makers cannot be reclaimed).

7. There would be a greater need for tax increases because of the interest payments on the additional $12 trillion added to the national debt.

Your Questions About Foreclosures

Joseph asks…

Help Me! Want to buy a preforeclosure but not sure if I should!?

My husband is a licensed in every handyman job there is. This would be our first home or flip or rental. I have found a house that has 2 mortgages. And I know the approx value: about $100K, plus $32K in Federal Tax, and $10 K in other tax. With lots of liens on it (the mowing of the yard, etc). I pass by and I see one light turned on it the house and a big lock in the front. It has a basement because it has a door to go to it. I know this area well, because I rent here. The houses are going for about $300K at least. I have the address of the wife, and the loan co. told me by spring, it should be in foreclosure. I’d like to talk to the lady first, but I don’t know if it is recomended and I don’t know what I’d say. I’d like advice on what I can tell her and if there is a specific type of loan I can get.

Thanks for all and any advice and help.

Your Questions About Foreclosures

The Expert answers:

I have a few questions for you…

Approximate value 100k? Or do you mean approximate lien

I work with lots of F.C. Clients so here is a quick run down of the process…this varies state to state to double check everything i say.

Borrower goes 60-120 days late. Lender files for F.C.
Add 5-6k to thier loan balence-legal fees and an drive by appraisal (to see if whether if they forclose will they get thier money.)

owners will get notice of sherrif sale. This is usually done by auction, this is where you can check the house out and place bid.
***check and get an estimated idea on value for the house.

BEWARE OF ACTS OF VANDALISM!!! Many burnt owners will deface the property or pour cement down the pipes. See what your getting yourself into it.

–many lenders will not lend on a property with functional or structual damage. You may inquire into certain goverment loans that will help you get the financing to do the repairs and get the loans on the house. Try contacting HUD.
Some lenders will escrow the money to you to fix it as well but it is rare and limited..maybe a few thousand dollars. You can get away with cosmetics but if there are holes in the wall, toilets or sinks missing your going to have a problem.

Once they accpet your bid the orignal borrower will have a REDEMPTION period. 3-12 months to either refiance or sell the house. SInce the home is in foreclosure status, they still usually go much lower than what market price would be.

You mentioned homes in the area go for 300k…are the houses comparable? Are they with in .5 mile and 6 months form the sale date? Just because the appraisal says its worth more doesnt always mean you can sell it for that. Michigan for instance is going thorugh a hard time right now. I work many loans there and values drop every month constantly.

So becareful and check the market. Look for good economic signs like a starbucks or a home depot opening up. (signs a neighborhood is on the up and up.) hopefull this foreclosure isn’t one of many!

Its a gamble on whether you will get the lowest price with her or with the auction. Dealing with her may be a safer bet in getitgn though. The banks only care about getting thier money back no matter where it comes from.

You could even buy it from her and put her on a rent to own or landcontract so you could make a small profit and save her house. (this could be risky if you don’t know what your doing)

its sounds like she is still living in it and hasn’t quite burned the house to the ground yet so financing options are wide open.

When you first buy the house, no matter how much it appraises for, what you pay for it was what the bank views as it’s worth. So say the home is worth 300k but you buy it for 100k. You have no money down. Its a investment property so you option for a 50 year mortgage or a interest only loan. This is all doable.
But it not like you get an automatic 66% down cause you got it at a great price. You will still need 100% financing. Sit on the property for 6 months to a year before you can utilize the equity for a lower rate or cash out. Of course you can always sell the bugger for a profit.

Just make sure you leave yourself plenty of space in carring all your debt plus this investment. Include taxes and insurace with your money payment and see if you can afford it..even if a renter “forgets” to pay the rent. Have back up in money researve.

You don’t want to get in over your head and be the next sherrif sale ;P

Good luck!

Powered by Yahoo! Answers

Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures

Your Questions About Foreclosures

Your Questions About Foreclosures