02-09-2010, 12:27 PM
Short version
1) IndyMac, loans bought by OneWest at 70% of original value,
2) OneWest getting a bailout agreement for 80% of losses on foreclosures and short sales from FDIC
3) Math - I'll make up some numbers as I forget the ones on the video.
Say bank short sales home for 300K when original note was 400. Bank lost 100K, right? No. FDIC hands them 80% of the "loss" = 80K. Added to Short sale amount they got 380K. The bought loan at 70% value so paid 280K for it. One West just profited 100K AND they make homeowner sign promissory note for 100K as condition of short sale.
FDIC is now out of funds and looking to the Treasury for help.
ETA oh, and the players involved are various big names of Goldman Sachs etc. and former Secretary of the Treasury. In other words, people in high places helping themselves and their friends, same old same old.
Meanwhile, bank has zero incentive to make loan mods because they make money on foreclosures and short sales.
1) IndyMac, loans bought by OneWest at 70% of original value,
2) OneWest getting a bailout agreement for 80% of losses on foreclosures and short sales from FDIC
3) Math - I'll make up some numbers as I forget the ones on the video.
Say bank short sales home for 300K when original note was 400. Bank lost 100K, right? No. FDIC hands them 80% of the "loss" = 80K. Added to Short sale amount they got 380K. The bought loan at 70% value so paid 280K for it. One West just profited 100K AND they make homeowner sign promissory note for 100K as condition of short sale.
FDIC is now out of funds and looking to the Treasury for help.
ETA oh, and the players involved are various big names of Goldman Sachs etc. and former Secretary of the Treasury. In other words, people in high places helping themselves and their friends, same old same old.
Meanwhile, bank has zero incentive to make loan mods because they make money on foreclosures and short sales.