Monday, December 1, 2008

Investor Sues to Block Mortgage Modifications

A lawsuit against Bank of America claims states and banks will short bondholders $8.4 billion and damage the market by cutting home payments. This is big.

(Read earlier posts about mortgage mod programs here and here.)

5 comments:

Anonymous said...

isn't this like trying to get blood from a stone?

if the bank is going to lose the "asset" w/out the modification, does investor money come from?

Mark said...

Ah, but the bank will get the asset if they foreclose! I hope this lawsuit succeeds and millions follow it. As a taxpayer and shareholder, it is not my fault people bought more house than they could afford. Foreclose on them and work out a deal with the city/county to rent the place out to firemen, cops, and teachers.

Montpellier said...

Let them foreclose, and then let the bank eat the rest of the loss when they are forced to bring pricing down to the point where firemen, cops and teachers can afford to really buy it (ie, pay off the mortgage one day).

Wages aren't going up, so prices have to come down. You can't sell things to people with no money.

Anonymous said...

Amen Montpellier.

go dog go said...

Banks SHOULD eat the losses. But in the process, a number of them are going to go under. What was that number Peter Schiff was throwing around? 1000 banks going under?