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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.
Yes.. and the bill before the Senate now is about GUARANTEEING loans.. not making them.. but guaranteeing loans that het lenders VOLUNTARILY write down..if they write them down.. etc. Not a "bail out" either..
But a bail out in the sense that if this didn't exist the homeower would be out of a home, the bank would be out of a lot of money.
And if the gov't didn't guarantee the loan to buy Bear Stearns.. well then Bear STearns would be.. GONE.. etc.
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.
If you want to have a discussion, you need to stop screaming at me.
It is not VOLUNTARILY to take the write down.. It is black mail to the banks.. take the write down.. or we wont guarantee the loans!!!.. well that might be fine to you, being on the receiving end of this "gift".. it is not ok to me because the government has no authority to first, bail out home owners who made bad decisions, nor bail out the banks, nor bribe them.
You say that I wont be making your payments for you but what happens when you dont pay your bill? The government steps in and pays it, and taking tax dollars to do so, where does the tax dollars come from? ahh.. tax payers.. those you claim wont be paying for your poor choices..
If the banks didnt make mistakes and loan out money poorly, then your right, the guarantees would mean no tax dollars being used, but the fact that we're even having this discussion shows that they do make poor choices.
Do you understand that the banks arent even loaning out their own money on these loans? They are borrowing money from the government, (using guarantees) and loaning them out already? (Fannie Mae/Mac are such programs). When banks are no longer loaning out their own money, and get guarantees by the government, they have no reason to loan responsibly, hence the reason we're having problems we are today. The solution is to get the government out of the loaning business, not diving into it even more.
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 -
I do not pretend to know about that mess.. I was.. well I was a kid in the 80's. Perhaps I'll google it...
Yes.. and the bill before the Senate now is about GUARANTEEING loans.. not making them.. but guaranteeing loans that het lenders VOLUNTARILY write down..if they write them down.. etc. Not a "bail out" either..
But a bail out in the sense that if this didn't exist the homeower would be out of a home, the bank would be out of a lot of money.
And if the gov't didn't guarantee the loan to buy Bear Stearns.. well then Bear STearns would be.. GONE.. etc.
Bear Stears was going no where.. The building that they own alone as worth over $1.2 Billion (and paid for).. they also wrote tens of trillions of financing. They should have been allowed to file bankruptcy and then be sold off, even the stock holders would have recovered more then they did under the "guarantee" the government provided.
One thing that Bear reminded me was how glad I was to leave the dollar like Rogers and Schiff did before me.
Bear Stearns was indeed a bailout for anyone holding US dollars. It's worse than a taxpayer funded bailout and its effects won't be felt for months to come.
When (not if) Fannie and Freddie go under and the government decides to bail them out, gold is going to $5000 an ounce, easy. Then, when the government makes it illegal to own (as I'm hoping), then I'm really going to cash in at 10k to 20k an ounce in cash (obviously with no capital gains necessary).
Location: Sitting on a bar stool. Guinness in hand.
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[quote][quote=TristansMommy;3817784]
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Originally Posted by baystater
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.
Oh I think lot of people were blinded by greed. Especially the people who refinanced themselves to the hilt to either buy stupid things or to add on to there homes making them large monstrosities. As for the people who bought homes. Why didn't these people hire a independent lawyer to explain risk and benefits of the mortgage . I would have not cost that much and it would have saved them the pain they're going through now. No I think they were lazy and just wanted the mortgage company and real estate angent to handle it.
Quote:
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!
Sorry bro. life ain't fair sometime. I know. I grew up with a family living pay check to pay check. I'm still not rich but I learn from my early days how to be extremely frugal. and how to look for bargains when they come.
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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.
Well think about this. Who is to say that a lot of these people are going to get kick out of their home or neighborhoods. Look as someone who is a small time real estate investor I know the days of flipping for the most part are over. So why invest then? Well one I believe in the future real estate will recover. Not to the levels of 2003 -2005 but it not quite the end of the universe either there will be profit to be made. And two I in the meantime until the recover comes would like to have renter in the homes that I buy. This is a source of income for me and a roof over the head for the former owners or people who have lost their home elsewhere. I think a lot of bottomfeeder like myself would allow the families that used to own their homes to rent the a home at a reasonable rate. Look I'm not greedy and I know what it like to rent and all the good and bad that comes with it. So I'm not going to rape my renters but I will ask for fair compensation for use of my property. So we have a win win here. I make a little money and former owner get to stay in a home and rebuild there funds and credit.
Thats my biggest fear.. And with the government just taking on more and more liability and risk for home owners, if they go under.. this country is in the toilet.
If you want to have a discussion, you need to stop screaming at me.
It is not VOLUNTARILY to take the write down.. It is black mail to the banks.. take the write down.. or we wont guarantee the loans!!!.. well that might be fine to you, being on the receiving end of this "gift".. it is not ok to me because the government has no authority to first, bail out home owners who made bad decisions, nor bail out the banks, nor bribe them.
First.. shouting is typing in ALL CAPS.. I'm simplyusing all caps to emphasize my point.. so I'm not shouting.. so YOu need to chill a bit.
Secondly. where do you get that it's blackmail..that's just ludicrous. We're not talking about already federally secured loans here.. we're talking about loans that arent' currently FHA secured. It's incentive to get thebanks to WORK with homeowners and keep them in their homes. They banks will have to decide which move is financial prudent to them. If they stand to loose more money in the long run writing down the mortgage and not foreclosing, then they will simply not volunteer that to their borrower and continue with the foreclosure without a guarantee as would have happened if this bill did or didn't exist int eh first place. BUT.. if it is better for them to write it down, fix the interest and take the FHA secure for the write down.. then they will do exactly that. I could see your blackmail argument if we were talking about FHA secured loans that were threatening to revoke that FHA security.. but we're not.
You say that I wont be making your payments for you but what happens when you dont pay your bill? The government steps in and pays it, and taking tax dollars to do so, where does the tax dollars come from? ahh.. tax payers.. those you claim wont be paying for your poor choices..
Well.. first, the homoeonwer..under new stricter guidlines would have to prove they actually could afford the new payments. So, in my case, I as making $3300 / month payments (yes I was struggling to do that) on a $400K mortgage at a 6.95% interest rate for 2 years (that does include my property taxes). Principal is now #393K but I think the house is actually worth around $390 (It was appraised at the itme of my mortgae at $450K btw).. Im' at 100% LTV. My loan principal would become $385K and the rate fixed at a 6.95. If they gave me that same interest rates my payments with escrow would be approx $3100. If I did $3300 I certainly could do $3100. What I can't do is the $4060 it's now at because of the ARM increases .. and that will go higher! So.. I CAN afford the new mortgage AND can prove that. I would , in essence be a good candidate... and would not be likely to foreclose..or walk.. because a) I wouldn't be upside down anymore and b) my payments would be fixed and at what I have been and can be affording. If I couldn't afford the new loan.. then I simply wouldn't qualify anyway and the foreclosure would go forward.
At this point.. I'm already letting go. And if this does get past the president and moves forward, if my lender is going to volunteer and allow this in leui of a foreclosure.. i will decide wehter I want to continue to stay and if it works for me. I probably would take it and stay..but i have a feeling, based on the stonewall resistance I've gotten despite my persistance so far ( I was simply asking to FIX the loan at hte CURRENT principal and even extned maturity.. they wouldn't budge) I doubt my lender would be "volunteering" becasue I"m lumped into some wall street investment group or something.. so it probably isn't even going to help me... but i do believe it would help many others.
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