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So lets hear your solution then. B/c we are already going to be paying for it out of the 700Billion that's about to pass. No one but the gov't is doing anything but forking over the cash. If The Banks lowered the principle they'd lose far less and ultimately we the tax payer would have to fork over far less.
If you feel that lowering the principle puts people in a bigger home than yours then the banks can move them into a less affordable home. A modified 1031 exchange if you will. This will put people in homes that they should have had to begin with and not McMansions. People in homes they could afford would save them money on utilities,taxes and mortgage payments. The glut of homes will start to diminish. This could start the housing economy up again. But these banks are just waiting to be told what to do by the gov't.
This is a possibility.
Lowering the principal and extending the loan payoff still makes money for the Bank. Stabilizing the interest rate to what is affordable for the homeowner, and reasonable based upon the risks (documentation) is fair. Until confidence in the credit market stabilizes and job creation occurs, consumer confidence will be a big problem.
i think that is why americans are so mad. they are always being asked to fix problems that they did not create.
BINGO.
And people need to think about this. Obama is backing this crap. He wants to see low income people "access the American dream of home ownership." His words, not mine! And look what these low income people did - they were totally irresponsible and now have caused the rest of us a big problem.
I am sorry. If you only make $45,000 a year, you have no business buying a $300,000 up house. But THIS IS WHAT HAPPENED. Why should we, the taxpayers, bail these people out? I DO NOT GET IT.
Lowering the principal and extending the loan payoff still makes money for the Bank. Stabilizing the interest rate to what is affordable for the homeowner, and reasonable based upon the risks (documentation) is fair. Until confidence in the credit market stabilizes and job creation occurs, consumer confidence will be a big problem.
extending loan payments could be an option, as well as housing trades, but how can you count on the banks for documentation verification when they did not do it the first time?
If a person cant pay the whole thing back, maybe they need to move to some place that they can.. No one is suggesting debtor prisons, but holding people responsible to the contracts they signed seem to be 101 in business.
You can only hold someone responsible according to their ability to pay. Moving somewhere else doesn't do anything to make them repay their original loan.
Quote:
There were several methodologies included in this regulation change that gave more power to bankruptcy judges. They could change the terms of loans - like - to 40 or 50 year loans, lower the interest rates, lower the principal, etc. However, the GOP was incensed b/c stop and think about this. Someone bought a home that cost $800,000 and they make $75,000 a year (and this IS what has happened). They got a no interest loan. The judge knocks off $400,000 . . . changes loan to 40 years . . . lowers the interest rate to 5 % . . . and suddenly this person who never should have gotten a loan to start w/ (was not qualified!!!!) is living in a house MUCH nicer than yours, and you did it the old-fashioned way - got a traditional 30 year fixed loan . . . and this dude down the street, who didn't "play fair" lives in the house 7 years, and then when the value of houses has increased, he sells it and MAKES A PROFIT!!! Do you, the taxpayer who underwrote this crap, get part of that profit! HELL NO!!!
Is it in the new one? I haven't read the new proposal yet. I agree with you that it's not fair. Those people weren't necessarily living in those homes either, some were trying to flip them and got stuck.
You can only hold someone responsible according to their ability to pay. Moving somewhere else doesn't do anything to make them repay their original loan.
Is it in the new one? I haven't read the new proposal yet. I agree with you that it's not fair. Those people weren't necessarily living in those homes either, some were trying to flip them and got stuck.
letting them live in a home they could not afford in the first place is certainly not the answer.
And people need to think about this. Obama is backing this crap. He wants to see low income people "access the American dream of home ownership." His words, not mine! And look what these low income people did - they were totally irresponsible and now have caused the rest of us a big problem.
Yeah, and McCain is supporting shoring up the wealthy and helping them out of their mess which I find wrong too. Both have their down sides but Obama is the candidate that I will support.
Lowering the principal and extending the loan payoff still makes money for the Bank. Stabilizing the interest rate to what is affordable for the homeowner, and reasonable based upon the risks (documentation) is fair. Until confidence in the credit market stabilizes and job creation occurs, consumer confidence will be a big problem.
I read a story in the newspaper the other day, with a guy complaining that his ARM was going to adjust to 13%, (he's currently at 12.5%) and the whole story was boo hoo hoo, I cant afford this. Anyone bother to tell the guy to not get an ARM to begin with, or to refinance the property right now at 6-7%? No, he'll end up in bankruptcy because he's to stupid to go lower his own costs and he'd rather complain putting the problems on my sholders. Last thing I want it to now tell the guy that if he files bankruptcy, his principle could possibly be lowered because of his own stupidity.
I don't have a solution. Thankfully, that's not my job.
I just don't like the idea of forking over more of my hard earned money to people that mismanage theirs or live above their means. I don't think that putting others' burdens on my back is an acceptable answer.
Give me another one and I can agree of disagree with it. My thought is this - I'm not part of the problem and shouldn't have to be part of the solution.
I'm not apart of the problem either and it's for damn sure not my job to think of a solution of this. I just drumbed that up as I read the the jabs at my comment. If I put more time into it i'm sure I can come up with a few others. Now if I can think of this I'm sure the banks have thought of it. The question is why aren't they trying to resolve this without the gov't and the tax payers.
Why isn't the gov't demanding that the banks come up with X number of solutions and the gov't decide on what's acceptable before they (the gov't) jump head first in with OUR money?
letting them live in a home they could not afford in the first place is certainly not the answer.
For the people who were flippers, they weren't living there in the first place. And there are a lot of these people out there right now thanks to HGTV.
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