McCain never mentioned bankruptcy, just straight to principle adjustment seemingly across the board.
Regards,
Danny
Regards,
Danny
Biden -- Wants to give away houses????
- Thread starter jond
- Start date
Yup, so everyone who refinanced their house to take huge wads of cash out will now wind up with free money when their principle is adjusted down.
That's gonna make the rest of us who lived responsibly feel really good, isn't it?
I say reduce the principle and use the 600 billion to pay off whole loans and then write new ones at the assessment or lower and tack on a 8% interest rate. Package up the loans and sell them as retirement accounts to people who have lost the 2T recently.
The fact is, it isn't right but the banks are going to get the money anyways. You night as well keep people in their houses if you can.
EDIT::: I think it's so funny that some people on Prime are getting pissed about a possible handout. I have to see free housing everyday. I see the government give away houses everyday in the form of free money to people who don't work. It's been happening way before now so don't be surprised when it continues to happen.
The fact is, it isn't right but the banks are going to get the money anyways. You night as well keep people in their houses if you can.
EDIT::: I think it's so funny that some people on Prime are getting pissed about a possible handout. I have to see free housing everyday. I see the government give away houses everyday in the form of free money to people who don't work. It's been happening way before now so don't be surprised when it continues to happen.
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It's kinda like welfare for the middle class.
I predict a shitstorm when everyone who didn't treat their home like an ATM realizes the people who did are going to walk away with the money and no repercussions.
Skippy I have been bitching about this on Prime for years. I have been at the front of that shitstorm screaming the whole time.
If they don't adjust the principles soon this whole mess is going to get much worse. Yesterday I saw a figure that said if housing falls 10% more 40% of all mortgages will be upside down. I Know of several people who are getting ready to walk away if the loans aren't adjusted. I think a lot of people are holding on by their fingernails waiting for that adjustment. If it doesn't come you guys are going to see a flood of foreclosures and the entire housing sector will be devalued so far that people who didn't put themselves in harms way will instantly be 3 feet in front of a train doing 60 mph.
Well hell, let's start reimbursing people who lose money at casinos, too.
one of you smart guys explain this to me a little better.
1: how will the government see any return on the money they use to pay off the "old value" of the house with and adjust it to the new value? thats the money the governments not going to make back right? god that pisses me off.
2: why cant they just re do the payments and make it like a flat 30yr amount?? people will owe more than their houses are worth, BUT then people will not get rewarded for being irresponsible. how great of a tax return is that when somebody gets 100,000 dollars knocked off the price of thier house by the government
1: how will the government see any return on the money they use to pay off the "old value" of the house with and adjust it to the new value? thats the money the governments not going to make back right? god that pisses me off.
2: why cant they just re do the payments and make it like a flat 30yr amount?? people will owe more than their houses are worth, BUT then people will not get rewarded for being irresponsible. how great of a tax return is that when somebody gets 100,000 dollars knocked off the price of thier house by the government
or how about they extend the program and readjust my fathers retirement money thats taken a beating lately from the economy that pisses me off more than anything right now. hes been on the edge of retiring(even got offerd early retirement a couple years ago)
that pisses me off more than anything right now. hes been on the edge of retiring(even got offerd early retirement a couple years ago)one of you smart guys explain this to me a little better.
1: how will the government see any return on the money they use to pay off the "old value" of the house with and adjust it to the new value? thats the money the governments not going to make back right? god that pisses me off.
2: why cant they just re do the payments and make it like a flat 30yr amount?? people will owe more than their houses are worth, BUT then people will not get rewarded for being irresponsible. how great of a tax return is that when somebody gets 100,000 dollars knocked off the price of thier house by the government
1. Sometimes it's just about losing as little as possible and not about making money.
2.They could put the plan in place I suggested. Charge no interest on the portion of the loan that is above the actual value of the home and only allow interest to build on the ACV of the loan. Even put in a clause that if a payment is missed 1,000 is added to the interest side of the loan.
OR
Forgive the amount between the ACV and the loan then charge 10% on a 15 year fixed loan for the ACV.
This market can't handle more foreclosures right now. The foreclosures have to stop.
3. the point in your second post. It sucks about your dads retirement. My mother is in the same position. My sisters and I met and discussed moving her money this spring. We did so because of her age, 62. she is only 10% stocks and was coming into this 60%. Thank god I moved the money before the shit storm hit. I mentioned to a Prime member on the phone in MAy that I was going to hold off in June but instead I kept in the game. I really felt something was up because of the VIX and the fact that every position I sold calls on that month swept and that had NEVER happened before that month. It made me nervous. I took a lot of risk this year and so far it hasn't paid off. I will continue to take risk as I enjoy it and it will pay off at some point. It has paid off in the past and it will in the future.
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If they are going to bail out people that made bad judgements about how much house they could afford, they need to give the SAME benefit to ALL homeowners. If they knock off $100k from their mortgage, everyone should get a similar check or reduction in Mortgage. If they give them 3% interest rates , they need to give us ALL the opportunity to buy a house at 3%.
I never hear any politician talk about fairness to those of us, who live within our means.
I never hear any politician talk about fairness to those of us, who live within our means.
Hopefully any reduction in principle will be treated as taxable income.
If they hand out food stamp and welfare then they should hand it out to everyone. Nope not happening. Get with the program. I have been bitching about hand outs for years and you guys are just now getting it. Well get ready to witness one of the biggest hand outs you will ever see.
I bet they will repeal that law too.
Currently if a short sale is granted the seller is hit with the taxes on the difference difference in the sales price and what was owed. I can't imagine that law will be in effect again until we are through this. Most people won't do a short sale because of it. it's cheaper to just be foreclosed on. After all in an environment where good credit won't get you a loan why would anyone care about their credit as a short sale can often times not damage the sellers credit.
Seriously. What about 401Ks? How are they different than houses? Both are investments. Everyone lost money in their 401's this year, why doesn't the government give us a handout for that?
It's f'ing b*llshit.
What's more, what about the morons who rolled their car payments, credit cards, etc into their mortgage when they refinanced? We're paying for that too I guess?????
Not that simple. It's a zero sum game. It's actually a little worse then that because of government inefficiency and transaction costs. Some people are going to lose, and big.
If everyone gets 3% interest, who pays the difference between the market rate? Let me give you a clue. Not only will YOU pay for it, you'll be paying multiples of your fair share as not only a tax payer, but one that's probably in a higher bracket. That's probably going to happen no matter how this works, but just thought I'd let you know.
And to add to that, stimulus checks are identical to getting a home equity loan except you can't control the interest rate and if you are a tax payer, your equity is displaced among several people instead of you.
But like steve said, there will only be losers in this game and that's all we can try to minimize at this point. You should have been raising hell when CA property values were doubling every 4-5 years (CO in some places were not much different, it's one of the worst states for foreclosures right now), but surprisingly I didn't hear a peep.. no one thought that was a little suspicous.. must be the weather!
When I discover a solution worth mentioning, I'll let you guys know. As it stands, none are worth explaining.
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I hear you. My father volunteered (attorney) to work with the Houston Center for Independent Living which is a non profit that gets people with income but disabilities a small home/decent apartment to live in. Sadly if you have disabilities (or God forbid a wheel chair) you are discriminated against, especially in areas with lower income housing because frankly no one cares what happens to some guy on the street in a wheel chair. In addition, physical handicaps are often associated with mental ones, which causes many of these people (with income, not much usually) to be taken advantage of.
Long story short, my dad saw things in that environment he couldn't believe. With a couple forms he could get just about anyone who didn't* make too much money 30-40K to put down on a house. They just GIVE it away to put more people in homes only. And you wonder why the market is a little "bloated"? Why the "free market" is failing us? It's from $hit like this. In addition, it was much cheaper to just stop working (gas $$$, car $$$, etc.) and claim disability from SS. Many disabled people are not lazy and can find jobs, which is extremely admirable, but it's much cheaper to just not work and get their SS check. Who would blame them? Imagine if they actually helped those willing to help themselves.
If you think these are isolated events, my dad has 2 years and thousands of houstonians you should talk to. By the way, almost everyone of them that went to the closing without my dad was convinced to take an ARM/etc. instead of the fixed rate they asked for. Greedy? Reckless? You've got to be kidding me. These people couldn't explain what ARM even stood for if their entire family's lives and their dog rosco's life depended on it. They were coerced most of the time. You don't even want to hear the stories, it's depressing.
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Equities in retirement accounts cannot be on margin. Everyone in the U.S. buys their house on margin and since everyone does it, it must be OK. Buying stocks on margin is lunacy though of course.. No one thinks like that (except me). Because the mortgages are debt on a banks balance sheet, as they decrease in value, the bank cannot lend that much more times the reserve ratio. So $1 on your house to the downside means they have to loan $12 less (simplistic).
Well what if they already loaned out the $12? What if your house goes down in value by $100,000. Now the bank has to find a mil. What if everyone's house goes down by $100,000? Now the bank has to find trillions. But they can't so they stop lending and call loans back.
The "dead zone" is reached when no lending and calling back everything they can still leaves them unable to lend due to balance sheet losses and a lack of trust towards the borrowers. This happened the day before the bailout was announced by the way. Still don't want the bailout right? Think again. We call this situation a depression, and when you raise taxes like an idiot or anything along those lines we call it a "Great Depression". We are currently on an extremely delicate tipping point. The first ever coordinated global rate cuts of this morning are telling you loud and clear they understand this careful balance. The fact global markets continued to fall tell you it's not good enough. The saga continues..
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NY has laws that require property owners to build wheel chair ramps if the tenant requires one. About 20% of our property is fully handicapped accessible. Many land lords won't comply and find other reasons to deny the tenant. It's really sad how selfish people can be.
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As others have mentioned, many mortgage brokers kept pushing ARMs onto home buyers because it gave them a better commission. What of these people? No penalties for them? One guy I know works with people to help them restructure their mortgages to keep them in their homes. He told me that for a lot people, it wasn't about not reading the fine print or wanting to save a few hundred with a lower rate -- at closing, the mortgage broker would give them papers for an adjustable rate mortgage instead of the fixed rate that they requested / applied for. They would give them the attitude of 'take it or leave it.' It's a tough call for a family to leave it, especially when they probably already gave notice to their landlord or sold their home, packed up their belongings, and made all arrangements to move in. What of these crooks who sought the extra dollars at the expense of everyone else?
I am against the idea of adjusting principals. Why should people who played by the rules be penalized? There was an idea passed around earlier where they would pay a mortgage based on the current valuation of their home at a reasonable fixed rate, with a lien for the difference between the original principal and current valuation tacked on should the seller ever sell.
It seems that both candidates are now passing around the idea of adjusting principals. Shame on them both.
I am against the idea of adjusting principals. Why should people who played by the rules be penalized? There was an idea passed around earlier where they would pay a mortgage based on the current valuation of their home at a reasonable fixed rate, with a lien for the difference between the original principal and current valuation tacked on should the seller ever sell.
It seems that both candidates are now passing around the idea of adjusting principals. Shame on them both.
Oh wow. I never thought about that. I knew the banks lended out 10-12x what they actually had, but I never put 2 and 2 together to think that that means their losses are magnified 10-12 times as well. WOW....
it's also the reason this needs to be corrected before more foreclosures come. I know it's not right to give something away for free but I think we have to at this point. This is system wide not just some family losing their house and as you said the losses are bigger than you imagined.
lots of very good information in this thread, thx for taking the time to fill in some of the blanks on "how things work", folks.
sahtt and steveny come to the top of my list of contributors, but i'm sure (were i to re-read the thread) many additional names could be noted.
thx to everyone who contributed.
sahtt and steveny come to the top of my list of contributors, but i'm sure (were i to re-read the thread) many additional names could be noted.
thx to everyone who contributed.
This is f'ing sickening:
http://michellemalkin.com/2008/10/07/how-acorn-got-a-piece-of-the-bailout-pie/
These scumbag democrats are STEALING your hard-earned dollars to give it away to deadbeats who don't pay mortgages they never should have received in the first place. All so the democrats can win more votes to stay in power.
All this time, I've been playing by the rules and paying my bills. What a total schmuck that makes me now. And why do you have to search for, or be pointed to such a news story? This crap SHOULD be on the first page of every g'damn newspaper and blasted across the TV screen of every news channel.
http://michellemalkin.com/2008/10/07/how-acorn-got-a-piece-of-the-bailout-pie/
These scumbag democrats are STEALING your hard-earned dollars to give it away to deadbeats who don't pay mortgages they never should have received in the first place. All so the democrats can win more votes to stay in power.
All this time, I've been playing by the rules and paying my bills. What a total schmuck that makes me now. And why do you have to search for, or be pointed to such a news story? This crap SHOULD be on the first page of every g'damn newspaper and blasted across the TV screen of every news channel.
<-------holds hands together and shakes them two times on each side of his head. :biggrin:
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