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What was already part of the bailout? What EXACTLY PRECISELY is McCain's plan. Apparently no one knows. Is he going to pay banks the difference between the payment on the old value vs. the new value? Is he going to give homeowners money to refinance and force the banks to lower to the new value? Is he going to pay banks to move homeowners from ARMs and other exotic loans to fixed-rate? Is he going to actually have the Federal Reserve purchase homes that are in foreclosure?
These are all legitimate questions for BOTH parties NOT just McCain's. There needs to be more pressure on both of them about these issues. I would love to hear more details from both parties and not what the other thinks of the others plan.
I also believe that if you are voting FOR a certain party...you would want MORE pressure on THAT party, so YOU KNOW you are making the right choice come Nov. 4th.
No, no, I'm implying the fault of "whoever" convinced them that their house doubled in value in such a short time. You see, they live in a very less desirable area...northeastern Colorado!? The house is old and I can't believe that anyone in their right mind would put a double the value on that house after them being in it for only a couple years? It makes no sense and I feel it goes along the line of the "convincing people to buy/refinance at higher prices than what the homes are worth".
I know you're not trying to be harsh. I'm trying to understand, too and I think I had a "got it moment" at the debate last night.
Last night's debate, McCain talked about stabalizing home values. I feel he is on the right track and with over sight to buying up the homes and reselling, people won't get over their heads with values going insanely up or down. I believe McCain has a plan to "bring reality back into home values". It's insane to double a value on a home that isn't worth it. I think too much of that has gone on.
I know home values are not the only problem our economy is having concerning mortgages. I feel, too, that "the signers" are to be at fault as well. My daughter and her husband aren't "blaming" anyone but themselves, why don't others?
I think the two bolded parts have to both be considered, but to different degrees. There's some blame to be placed on a company valuing the house high, and thereby giving the owners the ability to refi and get into the situation your daughter is in- if it wasn't for that valuation, they wouldn't be able to get access to the $$, and therefore couldn't get in this situation in the first place. It's like getting that pre-approved credit card in the mail- if the offer never came in the mail, you wouldn't have the ability to access the $$ so you can't get into debt.
To a greater degree it's the fault of the borrowers- if the bank told them the house was worth $1 million and told them they could "swing the payment", who's the knucklehead- the bank, or the borrower who says "ya know- they're right- even though I only bring home $5,000/month, I can swing a $4,000 payment!"
In certain cases the mortgage company and bank policies are truly "predatory", while in other cases they're simply throwing offers out there hoping someone will bite. While the predatory practices definitely have to be eliminated, it'd be nice to do a little in the way of consumer protection as well by restricting the kinds of non-predatory offers that get thrown out there. While I know this sounds like a nanny-state idea, it's obviously something that's needed- just look where we got without it. I'm talking about things like credit card companies offering free umbrellas to college kids if they sign up on campus for a credit card- they always seem to have those tables set up on rainy days, and they'll give a $1,000, $2,000, $5,000 limit to a kid who doesn't have a job and may have huge student loans to repay. While it's not "predatory", it's "irresponsible"- especially when we're talking about 18 y/o kids who are just being set up into the "I can buy it on credit" mode of thinking that got us in this mess in the first place.
What a Slap in the Face to all the homeowners who have scrimped and scraped to pay their mortgages. The big companies have the attitude that if they fail, the Govt. will bail them out. McCain is now saying to homeowners, if you fail the Govt. will bail you out. Isn't that socialism? Isn't that the system a lot of people are detesting if used for Health Care? I thought the failed mortgages were already going to be bought up in the Bailout. Is McCain now saying that the bailout will now move to people having problems paying their mortgages? Everyone who has a tough time paying the mortgage should now stand in the queue to get their mortgages paid or restructured. That means nearly everyone who has a mortgage. It is tough for millions to meet their mortgage payments every month but they do and will now be penalised by McCain for being upstanding citizens who have kept their part of the agreement to pay for their homes.
Home values appreciated because of high demand. No one “convinced” anyone that their house was worth more than it was. The reason for the high demand was because lenders were FORCED and COERCED by groups such as ACORN into lending money to people without the means to repay. Suddenly everyone was buying a house. People seeking a mortgage or refinance had to have the property assessed by a licensed appraiser who can use a number of ways to determine the value of the property. One such way, the most used for residential property is past history of nearby like properties. There was no shifty eyed banker lurking behind the bushes trying to “convince” anyone of the worth of their property.
Once the demand dried up, homes became difficult to sell. Sellers who had to sell because of moving or even loss of a job, lowered their price to get a sale. As more and more homes came on the market and less and less demand for them became the norm, prices came down even further. Now the same technique used to appraise the home on the way up was used on the way down. The supply of homes for sale and the low demand now has made the house depreciate. In many cases because of 0% down loans, homeowners are upside down, they own more than it’s CURRENT appraised value and can’t sell it unless they come to the closing with a check for the difference.
Step in our gubmint with a $700 billion of your money.
If your house is no longer worth what you owe on it, the banks are now being encouraged to refinance to 95% of it’s current assessed value leaving the taxpayers to pick up what the bank is out. This is not good for the 96% of us that put down a sizable deposit and are paying our loans as agreed. This will further decrease the value of your property.
Now, did the gubmint solve the cause of this situation? NO, they still expect banks to make these loans for houses, cars, furniture, big screen TV’s or anything else that can be bought on credit. We are continuing to make loans to people who do not have the means or intention to pay it back and many of these people are not even citizens of this country and come and go as they please.
And the first one that says this is Bush’s fault is a total idiot.
To a greater degree it's the fault of the borrowers- if the bank told them the house was worth $1 million and told them they could "swing the payment", who's the knucklehead...
That's how I feel, even though Im talking about my own daughter, who for 99% is pretty responsible financially.
In certain cases the mortgage company and bank policies are truly "predatory", while in other cases they're simply throwing offers out there hoping someone will bite. While the predatory practices definitely have to be eliminated, it'd be nice to do a little in the way of consumer protection as well by restricting the kinds of non-predatory offers that get thrown out there. While I know this sounds like a nanny-state idea, it's obviously something that's needed- just look where we got without it. I'm talking about things like credit card companies offering free umbrellas to college kids if they sign up on campus for a credit card- they always seem to have those tables set up on rainy days, and they'll give a $1,000, $2,000, $5,000 limit to a kid who doesn't have a job and may have huge student loans to repay. While it's not "predatory", it's "irresponsible"- especially when we're talking about 18 y/o kids who are just being set up into the "I can buy it on credit" mode of thinking that got us in this mess in the first place.
Again, I agree. And this, too, falls into "who is the knucklehead". People, including politicians want to blame each other and everyone else.
I always remember someone saying, "when you are pointing a finger out, there is 3 pointing back at ya." It's a tough one to swallow, hitting home with family, but you're right...the borrowers are not blameless at all.
Last I heard from her, now, the bank is going to buy their home and their credit is not going to be tarnished, I guess because of stellar credit to begin with. It'll go from like excellent to good. I feel a bit better now. I know they'll get back up there in no time at all. They'll have to move, but they been wanting to anyway. So, good for them! That part of Colorado is a dead end.
Thanks for the chat!
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