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Old 02-19-2009, 08:22 PM
Location: West, Southwest, East & Northeast
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YouTube - Rick Santelli pissed off about the bailout
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Old 02-19-2009, 08:55 PM
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The part abpout lenders and borrowers that did anyhtign wrong at take to mean missated their income on their original loan application. The the laon can not be highewr tahn 38% of their income. I thnik thsi is aimed to avoid fannie and mac's finding that 53 and 58% of refianced homes in the last two quarters of 08 are facing foreclosure again.It emans basically that if you couldn't afford a converntional loans youyr out but we will have to see if tehy stick to it. But I see real problems with teh bankruspy part getting passed as this could really effect risk and future loans . That would make lenders require even tougher stanmdards than we see now developing. besides all thsi is only forced on banks that took TARP monmey and they may endup being very badly hurt by this compared to the others.
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Old 02-19-2009, 10:43 PM
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Originally Posted by Snafu View Post

It's the credit card factor. I know there are the "miracle restrictions/regulations" that are set to come into play in - what? June 2010??? But how many people could possibly squeak by if their credit card interest rates were not pegged at... I forget... was it 29% or 39%? Let me see, I can charge 5% on a home loan, I can get 3% on a CD investment... but we are still allowing credit card interest rates to peg out at those outrageous amounts? Even if the rates were lowered to 18% ... that sure looks like a good profit/return to me. How many families would be able to afford to live in their homes if they hadn't fallen on hard times and then the credit card double and triple whammy had not hit them... One of the "poster" families shown on some of the news programs recently was barely making it on $90.00 month in credit card payments... so they had a bad month and their payments went to over $200.00 per month immediately... and the safeguards to keep OTHER debtors from piling on is not in place for a while yet.

Perhaps something as simple as putting an immediate limit and freeze on credit card rates could help - this would keep just a little more money in people's wallets, so they themselves can contribute more towards the mortgage payments...

The taxpayer is taking a major hit on these bailouts, we are now looking at the banks to take some modifications... but if we still allow the credit card sector to sit back and get their profits unscathed, it seems odd. We're telling the mortgage lending banks that they need to realize that a lower, "guaranteed" payment is a good thing... why isn't the same rationale being shown to the credit card sector. (In my opinion, they are even less discriminating in their lending practices than any of the mortgage banks).
The banks are the ones who aren't letting go of the money the feds are giving them for a darned good reason. They know how much money is owed to them in credit card debt. And it if they start freeing up money they won't have any when all those credit cards go into bankruptcy.

They know who's delinquent on their payments. They know what's coming down the line and it looks like a train wreck. The feds won't have enough money to cover the 14 trillion in total credit card debt that Americans owe. That's the total owed by everyone, not just the bad debt. We don't really know how much the bad debt is.

While I'm ranting here, I might as well say this also. I know people who's credit card rates have been increased 14% for no reason. No late payments, no over the limit, no cash withdrawals, nothing but a notice saying that they reserve the right to raise the limit when they deem necessary. Out of the three people I know who this happened to, two of them can't afford the new minimums. And as of this month, are now up to 39% interest because they didn't pay on time. They'll be filing for bankruptcy in the future.

The people at the top have absolutely no idea what it's like to live hand to mouth, none. That's what most of Americans do now. See, if the companies cut peoples pay 10% and increase their portion of the health insurance, this will have disastrous effects on the economy. More and more people won't be able to afford their credit card payments and may pay one or two late. Bad news next month, all of their credit cards (even the ones they paid on time) will go up to the maximum. Now they can't afford to pay any. So they don't. This consumer economy we were in was great while it lasted, but push came to shove and now people that were living on he edge got pushed over. People that were in the middle are on the teetering on the edge. And it won't take much more to push them over too. The banks don't get their money on time and they don't loan any out either. Like I said, they know what's coming and are trying to prepare for it as best they can.

And that's how it's going right now. It may get worse, it may get better, who knows.

The whole thing is just spiraling down, feeding on itself and there's nothing that anyone can do. There just isn't enough money to go around. You can try to create jobs, but the joblessness is growing faster than Obama's plans can accommodate.

Oh yeah, the banks I mentioned as they in my post, you may know them, you know, the ones with theirs hands out for the government bailout money? Chase (Washington Mutual), Citigroup, Bank of America, Wells Fargo etc...
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Old 02-19-2009, 10:50 PM
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The folks in the example who took the no money down, 3 year interest only ARM and paid nothing toward principle are actually NOT typical... most of these loans were down right predatory and took advantage of ignorant buyers (mostyl lower incomes). Another good share belongs to house flippers and investors - who figured on easy gains (personally witnessed this in Northern Virginia) only to suddenly be stuck without a chair when the music stopped. Many more were folks who had bought new homes, having yet to sell their old home - and unable to sell it when prices started falling were eventually forced into foreclosure on both! (this happened to a neighbor in NoVA). The latest wave will be coming from those who were doing fine until they lost their jobs. To ease your fear of foolish people being helped, the plan does not rescue everyone. Some people are simply too far underwater to be saved and there is no delusion about that. The plan is aimed at those on the margins.

I agree with Tex's concerns on overall mortgage lending/banking/market. A worst case scenario would see mortgage rates rise on the perceived added risk of government induced mortgage adjustments (but I wonder how this is worse than the risk of an outright foreclosure?), or that lenders continue raising lending standards causing prices to fall further and lengthening the recession or inducing more foreclosures when folks finally say "s c r e w this".

I don't really worry about the banks that took the TARP money though. They were SOL without it so they can't very well be worse off. The biggest banks are probably zombie banks anyway as I understand it. IMO, it would be most efficient for them to be socialized (especially considering they are the walking dead anyhow - limping along on their institutional mass), and re-privatized down the road when healthy. I definitely prefer this to pretending its a free market when the government buys up all your poor investments at above market rates.
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Old 02-21-2009, 09:07 AM
Location: SC
1,141 posts, read 3,086,872 times
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Originally Posted by NatasNJ View Post
Yep. This plan helps all the people that are currently about to be foreclosed on.
It does not help future buyers. (maybe by keeping mortgage rates low)

Who it helps with foreclosures? Obama says not the people who bought above their means with exotic loan, etc... We will see.
Are you sure about that? Everything I've seen on the news states that the owners had to stay CURRENT on their mortgage payments, and still have the means to pay the mortgage even at the 31% of their income figure.

So how could one be CURRENT on their mortgage payments, yet be in foreclosure?

I thought the plan was to also help people who's payments are above their 31% of income, but yet still managed to be current and have good credit as well. For example, Jack bought a house when he made 100,000.00 a year, then he lost his job, but found another making 50,000.00 a year. Jack needs a bit of help reducing the % of interest down to 31% of his now reduced income. Jack has made his payments all along, but he's struggling. If the %
of interest can be reduced to relieve him with his reduced income, then he will stay out of foreclosure hopefully down the road, give him more of his income to spend on other things (ie: hopefully stimulating the economy).

Or am I totally understanding the news wrong?

Mrs. P.
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