What about those who pay the bills?

I read with interest William W. Moreland’s recent letter regarding foreclosures and lawyers. I would like to add my comment:

Real estate agents and their brokers tell the buyer he can buy a house with little or no money down and no closing costs. They tell the buyers the sellers will pick up the cost in escrow by raising the price of the house to cover it.

A lending officer with some very creative loan ideas gets involved. He’s busy shopping around for a lender to approve the whole mess. Oh yes, don’t forget the underwriter with their seal of approval on it and off it goes to escrow. Deal done. Buyer moves in.

This is a creative loan in action. First year and second year the payment is low. In a year or two, payments are finally where they should have been in the first place. No more free ride.

The buyer knew there was nothing to lose. Buyer figured I can live in this big, beautiful house for less than rent on an apartment. Buyer stops making payments. Bank in turn begins foreclosing. The process takes three months to a year. Whoopee! Free rent! Using the system paid off for them. This was all legal because the government said so.

Who got hurt? All those who try to live with honor and diligently pay their bills on time.

SHIRLEY AXELROD

LAS VEGAS

Home values

To the editor:

Zero interest adjustable rate mortgages, zero down payments, greedy people, lax lending standards and poor regulatory oversight were the catalysts for the housing debacle. I can remember clearly when Bush 43 announced that home ownership had reached an all time high of 70 percent. Did he ever stop to ask how this happened?

Soon Barack Obama will, without fanfare, announce that home ownership and/or valuations have reached an all time low.

The sad part of this is those with great wealth were hardly affected while those who relied upon rising valuations to supplement their retirement were greatly impacted. As a result they will become ever more dependent upon government for their well-being — and remember, for those who are strict constitutionalists, these people get to vote.

Richard Rychtarik

Las Vegas

Bad loans

To the editor:

Nevada Attorney General Catherine Cortez Masto may be Nevada’s only savior in the mortgage crisis.

Every week or two an article appears about housing foreclosures and the overall process. And after every article someone writes in to dispute the process. The latest critics being Les Altman and William W. Moreland, who are a part of the group that doesn’t not understand the entire problem and thinks it will be solved with a simple, “Just pay your mortgage.”

Five years after this mortgage crisis began, we are just now finding out how we got in this mess and what it is going to take to clear it up.

What Mr. Moreland and Mr. Altman — and all the other “pay your mortgage” proponents — forget is this mess was created by banks and Wall Street brokerage firms and not mortgage companies and homeowners. The banks and Wall Street, with the assistance of mortgage companies, created homeowner loan and refinance mortgage programs that from the beginning were designed so that the homeowner would never be able to repay the loan.

All of this was designed so the banks, Wall Street brokerages and individuals who were invested in these programs would make billions and billions of dollars. And they did. And the loans did fail.

So fraudulent were these mortgage programs that shell companies were established to hold and transfer what is now called “toxic paper.”

The mortgage companies solicited these loans to homeowners based on easy qualifying, little or no explanation of the terms or possible downsides of the loan/mortgage program. Vegas was awash in money, prosperity and a positive outlook about the housing market. Thousands of jobs were going to be created based on the number of new casinos that were being built or to be built. There was no where to go but up.

Yes, hundreds of thousands of homeowners bit and re-financed, bought second homes and invested in rental homes at the encouragement of real estate and mortgage agents and yes hundreds of thousands of Nevadans overextended themselves in the mortgage world.

The banks and mortgage companies in an attempt to put a Band-aid on the problem created Loan Modification Programs with the backing of the federal government which was going to financially compensate the Banks for this task. With the assistance of these federally backed programs it actually became more profitable for the Banks and Wall Street backed Mortgage companies to foreclose on homeowners. Knowing this, the banks pursued homeowners in distress to seek assistance. This caused millions of Americas to fall into a position where walking away and losing their home to foreclosure was the only final outcome.

Rick Byrd

Las Vegas