no_vaseline_IHB
New member
To B.O.
It won't work. But thanks for trying.
It won't work. But thanks for trying.
What do you think about Obamas Plan to stop foreclosures?
- Thread starter theBigD_IHB
- Start date
NEW -> Contingent Buyer Assistance Program
wendyinoc_IHB
New member
The only way to solve this problem is to let it fall. Politicians are going to try to give people hope. The news is all gloom and doom. A small credit on your taxes will not save your home. I just wish it would fall faster to solve the problem. What I don't understand even if unemployment is at 10% we still have 90% with jobs. Why is the glass not half full??
usctrojanman29_IHB
New member
[quote author="wendyinoc" date=1234614344]The only way to solve this problem is to let it fall. Politicians are going to try to give people hope. The news is all gloom and doom. A small credit on your taxes will not save your home. I just wish it would fall faster to solve the problem. What I don't understand even if unemployment is at 10% we still have 90% with jobs. Why is the glass not half full??</blockquote>
You are right that it is sentiment that drives a lot of people's decisions, including financial ones. But when people are worried that they might be next to lose their job they slow down spending which in terms slows down the economy more and the cycle keeps going. It's not so much the percentage that is unemployment, it's the high of that percentage that scares the hell out of people. The unemployment rate may be 7.6% but last I saw was that 14% of people were "underemployment" and rising quickly (underemployed = unemployed + those working part-time because they can't get full-time work).
You are right that it is sentiment that drives a lot of people's decisions, including financial ones. But when people are worried that they might be next to lose their job they slow down spending which in terms slows down the economy more and the cycle keeps going. It's not so much the percentage that is unemployment, it's the high of that percentage that scares the hell out of people. The unemployment rate may be 7.6% but last I saw was that 14% of people were "underemployment" and rising quickly (underemployed = unemployed + those working part-time because they can't get full-time work).
usctrojanman29_IHB
New member
[quote author="Oscar" date=1234606645][quote author="Anonymous" date=1234590209]Actually, in my initial example awgee objected to, they saved money. Also, what makes you think if the govt does nothing, it will be cheaper? Both Roubini & Geithner argue otherwise. And it makes sense. Govt income = taxrevenue and a messed up economy makes for a lot less revenue. And if the whole economy gets really messed up - ie. do nothing and let all the banks fail and unemployment shoot up to 25% like in the Great Depression, then the govt still has to fork out for unemployment insurance, welfare, food stamps, more police to control all the increased crime, covering all the bank depositors of the failed banks, medicare for people who get hurt or sick from living in their car or a tent, etc etc).
The intervention isn't just the humane thing to do - it's the smart thing to do as well, and will be cheaper in the end.</blockquote>
Try to follow this: Politicians are being told that there will be no end to this recession/depression until house prices bottom out, so their kneejerk reaction is to try to artificially put a floor under housing. What they aren't being told is that the reason a housing bottom will end the crisis is because the lousy MBS (and derivitives based on them) will stop losing value and the banks holding them will finally be able to stop writing losses against them. This specific politicial solution takes money out of the pockets of *those* people over there and gives it to *these* people over here who can't pay back loans that <strong>they never should have taken in the first place</strong> in the idiotic hope that this will somehow magically turn the housing market around and allow the MBS to suddenly become worth enough to make the banks solvent, and thereby saving the economy. The problem is that setting an artificial bottom by subsidizing underwater homeowners only prolongs the conditions that created the crisis, with no way to resolve them. Sure, it keeps people in their house but it also prevents them from leaving it, and prevents housing from being affordable again. Additionally, as long as the banks are able to hide their losses, they have no incentive to get off the government payroll, sucking even more tax dollars away from other, more beneficial, uses.
As for the cost of doing nothing... I'll wager that we could cover the cost of unemployment benfits, food stamps, welfare for children, FDIC payouts, Medicare, and extra police until the dust settles and the economy recovers for far less than we will pay for this program, the stimulus bill, and both halves of the TARP combined. We'd avoid becoming an economically retarded nation as well.</blockquote>
US Gov't trying to intervene with the real estate market = Japanese lost decade 2.0 in the US
Citibank should have been taken over last Fall and I'd bet that BofA was on the brink before the gov't stepped in. Watch, the next one where the gov't will have to help is Wells followed by the golden child (Jamie Dimon and JP Morgan/Chase).
The intervention isn't just the humane thing to do - it's the smart thing to do as well, and will be cheaper in the end.</blockquote>
Try to follow this: Politicians are being told that there will be no end to this recession/depression until house prices bottom out, so their kneejerk reaction is to try to artificially put a floor under housing. What they aren't being told is that the reason a housing bottom will end the crisis is because the lousy MBS (and derivitives based on them) will stop losing value and the banks holding them will finally be able to stop writing losses against them. This specific politicial solution takes money out of the pockets of *those* people over there and gives it to *these* people over here who can't pay back loans that <strong>they never should have taken in the first place</strong> in the idiotic hope that this will somehow magically turn the housing market around and allow the MBS to suddenly become worth enough to make the banks solvent, and thereby saving the economy. The problem is that setting an artificial bottom by subsidizing underwater homeowners only prolongs the conditions that created the crisis, with no way to resolve them. Sure, it keeps people in their house but it also prevents them from leaving it, and prevents housing from being affordable again. Additionally, as long as the banks are able to hide their losses, they have no incentive to get off the government payroll, sucking even more tax dollars away from other, more beneficial, uses.
As for the cost of doing nothing... I'll wager that we could cover the cost of unemployment benfits, food stamps, welfare for children, FDIC payouts, Medicare, and extra police until the dust settles and the economy recovers for far less than we will pay for this program, the stimulus bill, and both halves of the TARP combined. We'd avoid becoming an economically retarded nation as well.</blockquote>
US Gov't trying to intervene with the real estate market = Japanese lost decade 2.0 in the US
Citibank should have been taken over last Fall and I'd bet that BofA was on the brink before the gov't stepped in. Watch, the next one where the gov't will have to help is Wells followed by the golden child (Jamie Dimon and JP Morgan/Chase).
usctrojanman29_IHB
New member
[quote author="Oscar" date=1234588879]Heartless bastards, the lot of you.</blockquote>
Damn right, and proud of it!
Damn right, and proud of it!
No_Such_Reality_IHB
New member
[quote author="Oscar" date=1234588879]Heartless bastards, the lot of you.</blockquote>
I'm okay with that.
An addict will sit at an intervention and scream how can you do this to me. It must be done.
The denial is strong and it's like watching the Octuplet Mom interview where she's obviously convinced herself that she isn't on welfare and doesn't get any Government assistance even though she's taking food stamps, has disability payments for three of her existing children and has the hospital that delivered her current 8 kids asking for a handout.
The gaming of the system just stop.
I'm okay with that.
An addict will sit at an intervention and scream how can you do this to me. It must be done.
The denial is strong and it's like watching the Octuplet Mom interview where she's obviously convinced herself that she isn't on welfare and doesn't get any Government assistance even though she's taking food stamps, has disability payments for three of her existing children and has the hospital that delivered her current 8 kids asking for a handout.
The gaming of the system just stop.
[quote author="theBigD" date=1234542346]<a href="http://money.cnn.com/2009/02/12/news/economy/foreclosures/index.htm?postversion=2009021219">Obama to Stop Foreclosures</a>
"This will help put a floor on home values," said one person familiar with the negotiations.</blockquote>
The number being floated around is $50 billion.
The total amount of existing mortgages in the United States is approximately <a href="http://www.plunkettresearch.com/Industries/BankingMortgagesCredit/BankingMortgagesCreditStatistics/tabid/233/Default.aspx">$14.8 trillion</a>.
Applied equally, this will mean that the "water level" is reduced by .34%. Even if the problem with foreclosures was related to people being underwater in their homes, and not to one of people being in homes they simply can't afford, how is such a small shift in the water level going to change anything? (IOW, do people really say that I'll leave a house that I can afford if it's 20% underwater, but if it's only 19.66% underwater then I'm staying?)
"This will help put a floor on home values," said one person familiar with the negotiations.</blockquote>
The number being floated around is $50 billion.
The total amount of existing mortgages in the United States is approximately <a href="http://www.plunkettresearch.com/Industries/BankingMortgagesCredit/BankingMortgagesCreditStatistics/tabid/233/Default.aspx">$14.8 trillion</a>.
Applied equally, this will mean that the "water level" is reduced by .34%. Even if the problem with foreclosures was related to people being underwater in their homes, and not to one of people being in homes they simply can't afford, how is such a small shift in the water level going to change anything? (IOW, do people really say that I'll leave a house that I can afford if it's 20% underwater, but if it's only 19.66% underwater then I'm staying?)
No_Such_Reality_IHB
New member
[quote author="Anonymous" date=1234608207]
Wow. Well then, I hope you live by your creed then and leave behind more created wealth (and by that, I mean actual physical or intellectual things than you consumed in your lifetime), rather than just shuffling money around, which creates nothing and benefits no one.</blockquote>
Not to just nitpick but... the entire recession and global crisis is the result of a credit crunch being caused by insolvency.
That credit crunch is quite simply caused by people no longer "the just shuffling money around"...
Wow. Well then, I hope you live by your creed then and leave behind more created wealth (and by that, I mean actual physical or intellectual things than you consumed in your lifetime), rather than just shuffling money around, which creates nothing and benefits no one.</blockquote>
Not to just nitpick but... the entire recession and global crisis is the result of a credit crunch being caused by insolvency.
That credit crunch is quite simply caused by people no longer "the just shuffling money around"...
O
Oscar_IHB
Guest
Becky Quick, when a guest suggested that CNBC could help convince people that Obama's plan was a good idea, said on live television "I'm not carrying the water for that".
Kudos Becky, you've earned my respect.
Kudos Becky, you've earned my respect.
Trooper_IHB
New member
<em>A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine. - Thomas Jefferson</em>
Tell me about it....
Tell me about it....
trrenter_IHB
New member
Obama's Plan?
<blockquote>Remove restrictions on Fannie Mae and Freddie Mac that prohibit the institutions, both taken over by the government last year, from refinancing mortgages they own or have guaranteed when more is owed on a home than it is worth. The White House says this could reduce monthly payments for up to 5 million homeowners. </blockquote>
Who would lend someone money when the collateral is worth less then the loan? If you are marginally underwater this may make sense but wouldn't you need a reduction in principle? Oh that is taken care of in the next part of the plan...
<blockquote>Create incentives for lenders to modify subprime loans at risk of default or foreclosure. For lenders that agree to reduce rates to levels borrowers can afford, the government will make up part of the difference between the old monthly payment and the new payment. Participating lenders also will be required to cut payments to no more than 31 percent of a borrower?s income. Up to 4 million homeowners could benefit</blockquote>.
So lets not say the govermnet will make up the difference lets say the American Tax payer will make up the difference. All the stupid renters get to help somoene else stay in a home they can't afford.
<blockquote>Keep mortgage rates low for millions of middle-class families seeking new mortgages. Using money already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to buy Fannie and Freddie mortgage-backed securities to maintain stability and liquidity in the marketplace. The department, through its existing authority, will provide up to $200 billion in capital for this purpose.</blockquote>
Great the interest rate is low but if the interest rate were to go up housing prices will go down because after all it is the monthly payment that people look at. So I get to pay more for my home because of artificially low interest rates.
<blockquote>Pursue reforms to help families avoid foreclosure. The administration will continue to support changing bankruptcy rules so judges can reduce mortgages on primary homes to their fair market value, as long as the borrower sticks to a court-ordered repayment plan. As part of the $787 billion stimulus package that Obama signed into law on Tuesday, the administration will award $2 billion in competitive grants to communities experimenting with innovative ways to prevent foreclosures.</blockquote>
If judges can reduce mortgages who would want to make mortgage loans? Wouldn't this make those loans very risky. Raising interest rates and limiting the amount of companies willing to make these loans.
<blockquote>Remove restrictions on Fannie Mae and Freddie Mac that prohibit the institutions, both taken over by the government last year, from refinancing mortgages they own or have guaranteed when more is owed on a home than it is worth. The White House says this could reduce monthly payments for up to 5 million homeowners. </blockquote>
Who would lend someone money when the collateral is worth less then the loan? If you are marginally underwater this may make sense but wouldn't you need a reduction in principle? Oh that is taken care of in the next part of the plan...
<blockquote>Create incentives for lenders to modify subprime loans at risk of default or foreclosure. For lenders that agree to reduce rates to levels borrowers can afford, the government will make up part of the difference between the old monthly payment and the new payment. Participating lenders also will be required to cut payments to no more than 31 percent of a borrower?s income. Up to 4 million homeowners could benefit</blockquote>.
So lets not say the govermnet will make up the difference lets say the American Tax payer will make up the difference. All the stupid renters get to help somoene else stay in a home they can't afford.
<blockquote>Keep mortgage rates low for millions of middle-class families seeking new mortgages. Using money already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to buy Fannie and Freddie mortgage-backed securities to maintain stability and liquidity in the marketplace. The department, through its existing authority, will provide up to $200 billion in capital for this purpose.</blockquote>
Great the interest rate is low but if the interest rate were to go up housing prices will go down because after all it is the monthly payment that people look at. So I get to pay more for my home because of artificially low interest rates.
<blockquote>Pursue reforms to help families avoid foreclosure. The administration will continue to support changing bankruptcy rules so judges can reduce mortgages on primary homes to their fair market value, as long as the borrower sticks to a court-ordered repayment plan. As part of the $787 billion stimulus package that Obama signed into law on Tuesday, the administration will award $2 billion in competitive grants to communities experimenting with innovative ways to prevent foreclosures.</blockquote>
If judges can reduce mortgages who would want to make mortgage loans? Wouldn't this make those loans very risky. Raising interest rates and limiting the amount of companies willing to make these loans.
[quote author="trrenter" date=1235015864]
If judges can reduce mortgages who would want to make mortgage loans? Wouldn't this make those loans very risky. Raising interest rates and limiting the amount of companies willing to make these loans.</blockquote>
Not only that, but I'm sure that down payment requirements will go up dramatically as well. People have problems with 20% right now, imagine that becoming 50% or higher...
If judges can reduce mortgages who would want to make mortgage loans? Wouldn't this make those loans very risky. Raising interest rates and limiting the amount of companies willing to make these loans.</blockquote>
Not only that, but I'm sure that down payment requirements will go up dramatically as well. People have problems with 20% right now, imagine that becoming 50% or higher...
trrenter_IHB
New member
Jumbos will not be included.
However I don't know how this will effect that.
<blockquote>Apparently Barney Frank wants to increase the conforming jumbo limit:
US Representative Barney Frank, Democrat of Massachusetts, said Friday that he wants jumbo limits to be raised again - to the previous level, if not higher.
Frank, chairman of the House Committee on Financial Services, pledged to include a provision for this in the economic stimulus bill Congress is expected to take up with President-elect Barack Obama. He also wants to change the way the loan limits are calculated to reflect real market conditions.
"Even if you accept the principal we shouldn't be financing luxury housing; what's a luxury house in Nebraska is an average house in Quincy," Frank said. "I'm lobbying hard to get at least last year's level to be put back where it was."</blockquote>
However I don't know how this will effect that.
<blockquote>Apparently Barney Frank wants to increase the conforming jumbo limit:
US Representative Barney Frank, Democrat of Massachusetts, said Friday that he wants jumbo limits to be raised again - to the previous level, if not higher.
Frank, chairman of the House Committee on Financial Services, pledged to include a provision for this in the economic stimulus bill Congress is expected to take up with President-elect Barack Obama. He also wants to change the way the loan limits are calculated to reflect real market conditions.
"Even if you accept the principal we shouldn't be financing luxury housing; what's a luxury house in Nebraska is an average house in Quincy," Frank said. "I'm lobbying hard to get at least last year's level to be put back where it was."</blockquote>
SoCal78_IHB
New member
[quote author="No_Such_Reality" date=1234659573][quote author="Oscar" date=1234588879]Heartless bastards, the lot of you.</blockquote>
I'm okay with that.
An addict will sit at an intervention and scream how can you do this to me. It must be done.
The denial is strong and it's like watching the Octuplet Mom interview where she's obviously convinced herself that she isn't on welfare and doesn't get any Government assistance even though she's taking food stamps, has disability payments for three of her existing children and has the hospital that delivered her current 8 kids asking for a handout.
The gaming of the system just stop.</blockquote>
Speaking of OctoMom... in case anyone cares... looks like Indymac is <a href="http://www.tmz.com/">foreclosing on them too. </a>No payments made for 9 months. Wonder how long they will squat there with the 14 children.
I'm okay with that.
An addict will sit at an intervention and scream how can you do this to me. It must be done.
The denial is strong and it's like watching the Octuplet Mom interview where she's obviously convinced herself that she isn't on welfare and doesn't get any Government assistance even though she's taking food stamps, has disability payments for three of her existing children and has the hospital that delivered her current 8 kids asking for a handout.
The gaming of the system just stop.</blockquote>
Speaking of OctoMom... in case anyone cares... looks like Indymac is <a href="http://www.tmz.com/">foreclosing on them too. </a>No payments made for 9 months. Wonder how long they will squat there with the 14 children.
no_vaseline_IHB
New member
[quote author="skek" date=1235017292]I haven't reviewed the plan, so forgive the open question, but in Obama's press conference he seemed to be referencing conforming loans. How much of this plan applies to the jumbo market? To the extent it doesn't, I doubt Southern California sees much benefit. For example, I think the refi option only applies to loans that Fannie and Freddie are already guaranteeing. That would exlude jumbos, no?</blockquote>
From what I understand, this is correct.
This might help somebody in Kansas or Oklahoma or Nebraska, but it won't do squat for costal California or Florida or any other bubble hotspots.
From what I understand, this is correct.
This might help somebody in Kansas or Oklahoma or Nebraska, but it won't do squat for costal California or Florida or any other bubble hotspots.
O
Oscar_IHB
Guest
Becky Quick... is a little pissed off:
<a href="http://www.cnbc.com/id/15840232?video=1038555470">Interview with John Taylor, National Community Reinvestment Coalition president/CEO</a>
The whole clip is awesome.
And from the NCRC's website:
<blockquote>NCRC?s National Training Academy provides training and technical assistance on topics such as understanding how to use the Community Reinvestment Act (CRA), fair lending laws, Home Mortgage Disclosure Act (HMDA), Truth in Lending Act (TILA), Real Estate Settlement Procedures Act (RESPA), Homeownership and Equity Protection Act (HOEPA), fair housing and foreclosure prevention. Our Economic Justice Campaign sites pilot innovative community partnerships to enhance the delivery of financial, technical, and social services to individual consumers, homeowners, and small business. </blockquote>
<a href="http://www.cnbc.com/id/15840232?video=1038555470">Interview with John Taylor, National Community Reinvestment Coalition president/CEO</a>
The whole clip is awesome.
And from the NCRC's website:
<blockquote>NCRC?s National Training Academy provides training and technical assistance on topics such as understanding how to use the Community Reinvestment Act (CRA), fair lending laws, Home Mortgage Disclosure Act (HMDA), Truth in Lending Act (TILA), Real Estate Settlement Procedures Act (RESPA), Homeownership and Equity Protection Act (HOEPA), fair housing and foreclosure prevention. Our Economic Justice Campaign sites pilot innovative community partnerships to enhance the delivery of financial, technical, and social services to individual consumers, homeowners, and small business. </blockquote>
xsocal land merchant_IHB
New member
I have a question relating to the reduction of payments or principle and who should receive benifits of those reductions.
<strong>If one had paid cash for a property in 2006 near the top of the market and according to comps it has lost value then should the government give a cash refund to the owner? If not then explain why not since the owner has lost "value" due to the falling market. </strong>
Why should the people who made bad decisions be rewarded and those who made what was at the time a prudent choice be penalized?
This is not hypothetical since I own 3 properties free of mortgages and certainly could have leveraged up to multi million dollar properties during the run up rather than be frugal and buy several smaller homes for cash.
Needless to say I have little empathy for those who overextended themselves or refied cash out of home that they have owned for a long period.
I really hope to see someone defend the government bailing out some people who according to Darwin really shouldn't have bought in the first place.
Have a warm and fuzzy day!
<strong>If one had paid cash for a property in 2006 near the top of the market and according to comps it has lost value then should the government give a cash refund to the owner? If not then explain why not since the owner has lost "value" due to the falling market. </strong>
Why should the people who made bad decisions be rewarded and those who made what was at the time a prudent choice be penalized?
This is not hypothetical since I own 3 properties free of mortgages and certainly could have leveraged up to multi million dollar properties during the run up rather than be frugal and buy several smaller homes for cash.
Needless to say I have little empathy for those who overextended themselves or refied cash out of home that they have owned for a long period.
I really hope to see someone defend the government bailing out some people who according to Darwin really shouldn't have bought in the first place.
Have a warm and fuzzy day!
irvine_home_owner_IHB
New member
[quote author="SoCal78" date=1235021100]Speaking of OctoMom... in case anyone cares... looks like Indymac is <a href="http://www.tmz.com/">foreclosing on them too. </a>No payments made for 9 months. Wonder how long they will squat there with the 14 children.</blockquote>
Bonkers.
I read in the paper that OctoGranny was living retirement to retirement check just taking care of the other 7 and that she'll have to move to a bigger place when the 8 come home.
Octo-Bailout!!
Bonkers.
I read in the paper that OctoGranny was living retirement to retirement check just taking care of the other 7 and that she'll have to move to a bigger place when the 8 come home.
Octo-Bailout!!
stepping_up_IHB
New member
We are still debating our refi deal with B of A, which would require us to pay down ~$7,500 in principal on top of paying for the loan fees. Our loan is owned by FM, so I'm hoping this means we can do the refi to a lower rate without having to pay down the principal and that the cost of the loan might be less?