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Old 05-19-2008, 08:01 PM
 
Location: Pennsylvania, USA
5,224 posts, read 4,996,465 times
Reputation: 908

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[quote=baystater;3817607]
Quote:

And who said I was a fan of any handouts? Best check my past posts about the Bear Sterns issue.

Didn't say you or anyone really was a fan.. simply saying it already happened whether there were fans or not... and how hypocritical is it for them to help out big corporate should haev known better banks (because arent THEY the ones that are supposed to be the financial genuises..)




As with oil. Look we as a society have had since the last gas shock in 1973 to push for other energy sources. We didn't now we have to pay the piper on this one. The only thing that may come from this is that maybe....Just maybe...we may serious work toward some other sources of energy.

Yeah. you're 100% right.. and guess what.. i wasn't even born in 73!! Sol..I guess I'm paying for YOUR generations mistakes.. (and the mistakes YOUR generation has made that now leaves me paying for YOUR retirements..which will be gone by the time I need it). Oh.. and you know who you can blame for stiffling alternate energy don't you.. those damned lobbyist that have politicians in their pocket supressing all of it so they can continue to reap tehir huge profits.



Some? Dude alot of people made stupid decision. Not only in buying homes with questionable financial instruments but also refinancing at for more than there homes were worth at records rates. Sorry but big middle finger to all of those who did. But I do understand that there are some that get caught in bad situation and need help but I personally believe these people are in the minority.

Yea.. a lot of people made bad decisions.. I agree with that.. BUT.. UM SO DID THE BANKS.. actually THEY are supposed to be the "financial authorities" and the financial genuises that offered these products and purchased them in the first place.. While the homeonwers aren't blameless.. it's a little like a parent putting a huge plate of cookies on the table in a room full of children and expecting no one to touch it.. come on man!! THEY created these products and offered it out to the public who look to THEM as the authority and financial "geniuses" who told them it would all be alright (as an example). SO THEY Are just as culpable.. yet THEY are getting bailed out left and right and the average American is suffering while they walk away with the gov't hep on one side and the homes on the other.


How about all US taxpaying citizens that didn't get hooked in and saved our money and did the right thing. Why should we pay for it. Heck I already know that I'm pretty screwed when the bill comes due for the WAR and when china comes looking for there pay off for all the money we borrowed from them. So why would I want to add more debt on to this? We are going to have to make some real hard decision in the next couple of year so we can clear our balance sheet. And one of those decisions is not give money away for failed loans.
Good for you.. you didn't get caught up.. again. yeah. some people made greedy decisions.. but you can't assume you know why people bought a house. I highly doubt anyone was being greedy. I know I simply wante dahome for my family.. nothing elaborate or big.. as a matter of fact.. my jome is very small.. AND i make a good living. AND i work hard.. heck.. I pay double SS and my own health insurance to boot. My ONLY "crime" was working for myself instead of the "man" and having NO open lines of credit!

Just allowing all these foreclosures are certainly hurting you and everyone else more than these proposed helping hand bills would.. by far. I think you'd rather have your neighbor in their home paying their mortgage and property taxes than having their homes boarded up and pulling down your home value.

The hit to the stocks of "investors" would be far less with a write downt han with a foreclosure.. and if that weren't true.. this bill wouldn't even be a discussion at all.
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Old 05-19-2008, 08:13 PM
 
69,368 posts, read 63,955,691 times
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Quote:
Originally Posted by TristansMommy View Post
First the bill being proposed does NOT use governement money for ANYTHIGN.. it is a GUARANTEE.. YES.. if the mortgage defaults.. then governement money is used to pay the balance of the loan to the lender!! (in otherword.s. the $200000 home is written down to $150000 home and if it forecloses and sells for %$10000 the gov't would pay the remainging $50K.. it's a GUARANTEE made by the government TO the lender that VOLUNTEERS to write down the mortgage to 85% of the current market value. The BANKS take the write down on principal (as oppsoed to an even BIGGER hit should the home be foreclosed on when the current existing mortgage forecloses) AND the homeowner gets to stay in the home.. BUT.. there is something int he bill that states that the government would recover 10% of the equity at closing for guaranteeing the loan.. So in other words if the homeowner gets the mortgage written down to $150,000 but then sells the hosue within 5 years for $200K and has 50K and equity 10% of that 50K would go to the government at closing.. the rest to the homeowner. (okay.. these numbers are silly...but I kept it simple for illustration purposes).

So.. how is guaranteeing mortgage any different than guaranteeing the loan on Bear Stearns?? Oh.. and does not 100% of the home revert to the investors when the primary homeowner defaults on the loan.. it most absolutey does.. so again. no realy difference.

Oh.. accept that a family won't be thrown out on the street as opposed to a business being ..well shut down!

Secondly. this is being proposed for a current criss.. and stps are being taken so that this crisis never occurs again!

Yeah.. I agree.. banks are getting a bail out for making bad loans with good money.. that's why you should be angry!! Because.. guess what.. even if this bill doesn't get past President dimwit.. the banks are STILL going to get their "bailouts" and be rescued.. while families will find themselves in financial ruins and possibly homeless!!

Again.. goverment money is NOT being given here to either the homeonwer or the lender.. their are still reprocussions for BOTH parties. The governement is guaranteeing a loan as incentive for the write down to prevent a foreclosure situation . IF the homeowner DOES default.. the homeownere walks away with nothing.. bank take posession of the home and gets their full principal back.. from a combination of the sale of the home in foreclosure with the remainder from the FHA backing. BUT.. if the homeowner is serious about staying in the home and can prove they can afford to pay the new payment at the write down and fixed rate..then teh chances of defaulting are nill. If someone is likely to default the criteria will disqualify them from this program.

As an investor.. do you not think it's smarter to allow someone to stay in their home and write down teh principal adn fix the rate.. and yes, lose some money.. but it certainly is less than what you would loose if the hosue went to foreclosure. If that wasn't the case, this wouldn't even be on the table at all!
Then you fail to understand the mortgage process. While banks may lose money on a foreclosure, rarely does that happen. I just closed on a bank repo a few weeks ago that appraised for $200K, I paid $132K.. bank loaned $140K on it, and got payments for years. By time banks get around to repo, the properties normally have equity in them. If the property does not have equity, then the banks made a really bad loan.. and the banks should pay the loss. Whats to keep a bank from making 1,000 bad loans, and getting the government to give them "guarantees" on all 1,000 loans?

Banks need to manage risks, and stock holders need to hold them accountable to make sure they are profitable. If banks can simply get a bail out then there is no risk to stock holders, and no one to hold blame if the banks make poor choices.

Steps are not being taken so that this does not happen again, and if they are, they shouldnt be. Banks should be creating their own risk/rewards, not the government.

In addition, stop using Bear Stearns as an excuse for you getting a bail out. Again.. I DID NOT SUPPORT BEAR STEARNS Guarantee... If they were in the hole, they should have gone out of business... (which would have caused a major economic collapse btw, unlike if you lose your home)
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Old 05-19-2008, 08:16 PM
 
69,368 posts, read 63,955,691 times
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Quote:
Originally Posted by TristansMommy View Post
The hit to the stocks of "investors" would be far less with a write downt han with a foreclosure.. and if that weren't true.. this bill wouldn't even be a discussion at all.
Wrong.. in the event you havent noticed, banks have been writing off bad loans since the day banks started loaning money.
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Old 05-19-2008, 08:19 PM
 
Location: Pennsylvania, USA
5,224 posts, read 4,996,465 times
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Quote:
Originally Posted by pghquest View Post
Wrong.. in the event you havent noticed, banks have been writing off bad loans since the day banks started loaning money.

Duh.. of course they are writing down bad loans since their inception.. the problem is that it has NOT EVER been at this alarming rates.. and as property values go down they stand to loose more and more per home that gets foreclosed.

If that weren't the case..this wouldn't be a discussion..but obviously these are write downs on scales of mortgages not seen before and is causing a really ..well mess
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Old 05-19-2008, 08:24 PM
 
Location: Pinal County, Arizona
25,100 posts, read 39,184,796 times
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Quote:
Originally Posted by TristansMommy View Post
the problem is that it has NOT EVER been at this alarming rates..
Not true TM.

In the 80's, we went through the VERY SAME THING - only that time, it was with the Savings and Loans - that resulted in the creation of the RTC (Resolution Trust Corp).

VERY SAME DECLINE -
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Old 05-19-2008, 08:24 PM
 
69,368 posts, read 63,955,691 times
Reputation: 9383
Quote:
Originally Posted by TristansMommy View Post
Duh.. of course they are writing down bad loans since their inception.. the problem is that it has NOT EVER been at this alarming rates.. and as property values go down they stand to loose more and more per home that gets foreclosed.

If that weren't the case..this wouldn't be a discussion..but obviously these are write downs on scales of mortgages not seen before and is causing a really ..well mess
While they are foreclosing properties more then before, banks are not losing money from these. I believe you yourself stated you had $80,000 in equity in your property, how will the bank lose by foreclosing?
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Old 05-19-2008, 08:25 PM
 
69,368 posts, read 63,955,691 times
Reputation: 9383
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Originally Posted by Greatday View Post
Not true TM.

In the 80's, we went through the VERY SAME THING - only that time, it was with the Savings and Loans - that resulted in the creation of the RTC (Resolution Trust Corp).

VERY SAME DECLINE -
Right, and the government went around selling off the banks and the debts, they didnt propose bailing out the investors who invested in bad deals.
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Old 05-19-2008, 08:30 PM
 
Location: Sacramento
14,044 posts, read 27,153,802 times
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Quote:
Originally Posted by pghquest View Post
For gods sake.. the government did NOT bail out Bear Stearns (or any other bank).. They provided a loan GUARANTEE, not the money needed. While I disagree with the government getting involved with the guarantee, its not a loan.

In addition, I dont recall ANYONE here supporting a "bail out" of Bear Stearns.. I for one am consistant.. Government shouldnt bail out businesses.. or home owners that made stupid choices.
The part above in bold is correct, and I have posted this same distinction too.

I'm surprised how few folks seem to understand this, and how it is different from a subsidy.
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Old 05-19-2008, 08:33 PM
 
Location: Sacramento
14,044 posts, read 27,153,802 times
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Folks, the Senate and the House have both prepared homeowner assistance bills. Bush objects to the bill proposed by the House because it includes these specific provisions:


- It would give first-time homebuyers a $7,500 tax credit to deplete existing inventories

- It creates a new property tax deduction of $350 to $700 for those who don't itemize on their federal tax returns


I completely agree with President Bush.
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Old 05-19-2008, 08:33 PM
 
Location: Pennsylvania, USA
5,224 posts, read 4,996,465 times
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Quote:
Originally Posted by pghquest View Post
Then you fail to understand the mortgage process. While banks may lose money on a foreclosure, rarely does that happen. I just closed on a bank repo a few weeks ago that appraised for $200K, I paid $132K.. bank loaned $140K on it, and got payments for years. By time banks get around to repo, the properties normally have equity in them. If the property does not have equity, then the banks made a really bad loan.. and the banks should pay the loss. Whats to keep a bank from making 1,000 bad loans, and getting the government to give them "guarantees" on all 1,000 loans?

With this statemetn it is clear then that you do not understand the current situation. Because the problem is that property values have taken such a nose dive that banks are taking LOSSES on these foreclosures... they are foreclosing after only 2 or 3 years of being "paid down" etc. Where I live, Foreclosures cost significantly more than it would in other states ..AND the proccess is quite long..adding to that cost. Traditionally.. your statement would be correct.. BUT in the current situation and market conditions it is not true.. maybe in the area YOUR situation addressed was.. but again.. certainly not the norm. If that were the case we wouldnt' even be having a discussion becasue the banks would be MAKING money....not writing down huge losses on the mortgage side and spinning the economy into a tailspin.

Banks need to manage risks, and stock holders need to hold them accountable to make sure they are profitable. If banks can simply get a bail out then there is no risk to stock holders, and no one to hold blame if the banks make poor choices.

I agree with this statement. BUT.. thanks to the lobbyist and the politicians in the pocket of these "banks" the banks are getting the bail out .. while the homeowners are getting screwed. Why shoudl the banks get help but not the citizens of this country? That's my point.. why should I watch Bear Stearns and others get help but watch the family across the street loose their home! Banks are the first lines here..they didnt' manage risk .. the made crappy products and sold them to homeowners and shareholders. Now all parties are hurting.

Steps are not being taken so that this does not happen again, and if they are, they shouldnt be. Banks should be creating their own risk/rewards, not the government.

I would say that stronger legislation is being drawn to regulate the mortgage industry and to stop predatory lending. Tighter restrictions obviously needs to be implemented, becasue if they didn't we wouldn't be in this crisis. The banks/mortgage industry created these products in the first place and offered them .. and a lot of people got stinkin rich on it too! So.. if the industry was able to police itself.. we wouldn't be in this pickle AT ALL because the products to sell never would have existed. This, does not at allmean I do not feel that blame also falls on homeowners.. but I'm simply saying that obviously the mortgage industry needs to be policed so that this doesn't happen again. There are certainly discussions going on about tighter restrictions and bills being drawn up , proposed..etc.
In addition, stop using Bear Stearns as an excuse for you getting a bail out. Again.. I DID NOT SUPPORT BEAR STEARNS Guarantee... If they were in the hole, they should have gone out of business... (which would have caused a major economic collapse btw, unlike if you lose your home)
Bear Stearns is NOT an excuse.. and by no means is this a BAIL OUT for me. ARe you going to be making my monthly mortgage payments... I dont' think so.. I will be. ARe YOU going to give up 10% of your "equity" and write a check to the gov't at the closing table when you sell your house.. no you won't.. because if I do get help from this bill. .I will. NOT ONE PENNY of money will come to me from teh government for ANYTHING.. the ONLY party thatw ill be monetarily affected are the homeowners and the banks that VOLUNTARILY take the write down.. and they'll decide that by figuring out which softens the blow.. if it is financially more beneficial for them to foreclose.. then they will. . but if it is more financially beneficial for them to write downt he principal and fix the rate..then that is what they will do!

Bear Stearns is just one example I am using to make a point.. a point about how corporations are CONSTANLTY getting help for their mistakes. but the average American doesn't. I just think it's disgusting that something like that makes it through..but this could be vetoed. Just doesn't make any kind of sense to me.
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