Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Gov't to unveil plan to shrink some home loans - Yahoo! Finance (http://finance.yahoo.com/news/Govt-to-unveil-plan-to-shrink-apf-1951043207.html?x=0&sec=topStories&pos=5&asset=&cc ode= - broken link)
Just read this. I knew Obama would pull this trick in an election year. If he really wanted to help homeowners out, he would have pulled the stop out last year. With the November 2010 elections coming up, Obama is trying to get more votes for his Democratic friends facing election (since the public has a short term memory; it's a what have you done for me lately).
I smelled a rat when BOA announced plans for mortgage principal reduction a couple of days ago. I knew the government was in on the action and going to kick back more taxpayer money to the lenders (especially the secondary lien holders).
So let's see here. Someone's who's responsible like me loses $137K on my first home. I lost all my downpayment plus my principal payment plus I had to wire $37K at closing. I was responsible enough to bail myself out.
But he's basically "giving" yes the word today is "give away" "free money" to these distressed homeowners.
1. They get 2% interest rate. Compared to a 5-6% interest rate, the government is essentially giving these homeowners $5K-10K in interest payment forgiveness.
2. Principal reduction after 3 years. Again the government is giving away the equivalent of a 15% downpayment normal people should have made in the first place.
How many distressed homeowners would there really be if people would have put at least 10% down plus paid into the principal. After 5 years, most homeowners would have eaten almost 20% into their home's initial purchase price. They wouldn't be distressed.
This program just encourages irresponsible behavior. Responsible homeowners get screwed.
Is this not another wealth redistribution game by Obama? He wasn't going to help people like me. Maybe I am one of the few suckers who saves for downpayments. Who has a 24 month hard cash emergency reserve always (since I'm self employed). I also feel W2 wage earners should have a 8 month cash fund.
There are very few homeowners who are in any distress (even with the decrease in home prices nationwide) who put real downpayments and paid into the principal. The majority of homeowner in distress put zero down/no interest, negative amortization loans or did cash out refinance to pay down other credit card debt or just spend it wastefully on vacation or big ticket items like cars.
the lies continue, sanctioned by the Administration, Congress and bank regulators from the OCC to The FDIC and Fed.
Let me be clear: These lies are outrageous and pernicious acts of FRAUD. That the Administration and Congress effectively forced FASB to make these frauds LEGAL does not change what they are - it only changes whether people will be punished for them.
So long as these FRAUDS continue, the market will not clear and true economic recovery WILL NOT OCCUR.
The proper way to fix this mess is to demand mark-to-market be restored. That's the red-headed stepchild, of course - such a move would force the truth into the open, probably force huge restatements of prior period "earnings" (which were false), and has a good probability of forcing some big banks under the FDIC in receivership. It would also force the market to clear. Odds of this happening? About the same as an asteroid hitting the Capitol this morning at 9:03 AM.
“As long as the administration continues to sidestep the larger issues such as job creation and how they intend to deal with Fannie and Freddie, subsequent misadventures into the mortgage market will continue to be an exercise in futility,” said Representative Darrell Issa of California.
So long as the administration keeps trying to prop up home values in YOUR DISTRICT Darrell, along with others, intervention into the mortgage market will be an exercise in futility.
Even today homes are priced well above common metrics of affordability. Yes, it's better than it was - by a considerable amount. No, it's not "good", by any measurement you care to use, and so long as the Administration (and Congress) continue to attempt to prevent prices from contracting to the point where ordinary Americans can afford to buy a home while putting forward a reasonable, 10% or greater, down payment and contracting for no more than a 30 year fixed mortgage, preferably a 15 year one, we will find no solution to the problem.
ABSOLUTELY NONE OF THE ATTEMPTS MADE THUS FAR HAVE HAD A DAMN THING TO DO WITH HELPING AMERICANS, AND THIS NEW PROGRAM IS NO EXCEPTION. They have all - each and every one - been aimed at one and only one thing - allowing banks and the GSEs to LIE about the "value" of the home loans they hold.
http://market-ticker.denninger.net/archives/2125-Housing-Obama-Still-Has-Not-Grown-Up.html (broken link)
Gov't to unveil plan to shrink some home loans - Yahoo! Finance (http://finance.yahoo.com/news/Govt-to-unveil-plan-to-shrink-apf-1951043207.html?x=0&sec=topStories&pos=5&asset=&cc ode= - broken link)
Just read this. I knew Obama would pull this trick in an election year. If he really wanted to help homeowners out, he would have pulled the stop out last year. With the November 2010 elections coming up, Obama is trying to get more votes for his Democratic friends facing election (since the public has a short term memory; it's a what have you done for me lately).
I smelled a rat when BOA announced plans for mortgage principal reduction a couple of days ago. I knew the government was in on the action and going to kick back more taxpayer money to the lenders (especially the secondary lien holders).
So let's see here. Someone's who's responsible like me loses $137K on my first home. I lost all my downpayment plus my principal payment plus I had to wire $37K at closing. I was responsible enough to bail myself out.
But he's basically "giving" yes the word today is "give away" "free money" to these distressed homeowners.
1. They get 2% interest rate. Compared to a 5-6% interest rate, the government is essentially giving these homeowners $5K-10K in interest payment forgiveness.
2. Principal reduction after 3 years. Again the government is giving away the equivalent of a 15% downpayment normal people should have made in the first place.
How many distressed homeowners would there really be if people would have put at least 10% down plus paid into the principal. After 5 years, most homeowners would have eaten almost 20% into their home's initial purchase price. They wouldn't be distressed.
This program just encourages irresponsible behavior. Responsible homeowners get screwed.
Is this not another wealth redistribution game by Obama? He wasn't going to help people like me. Maybe I am one of the few suckers who saves for downpayments. Who has a 24 month hard cash emergency reserve always (since I'm self employed). I also feel W2 wage earners should have a 8 month cash fund.
There are very few homeowners who are in any distress (even with the decrease in home prices nationwide) who put real downpayments and paid into the principal. The majority of homeowner in distress put zero down/no interest, negative amortization loans or did cash out refinance to pay down other credit card debt or just spend it wastefully on vacation or big ticket items like cars.
It's the new "Amerikan" way. Encourage irresponsibility and punish the citizens who are responsible.
The govt has for years redistributed wealth towards the rich and corporations. The income tax has become basically a salary tax and corporate welfare through not charging the fair market value on leasing govt land, tax write offs and tax shelters have left this nation broke. The nation cannot afford a nation ill housed and without govt. intervention that is what we will have. Every school district in this nation struggles to deal with homeless children; this is something that the nation cannot afford.
In the last ten years the top 5% have tripled their welth, walking off with 40% of the economy so rather than redistribusion I'd go with restoring balance. You and I bought those mortgages with the TARP and agin with the AIG bailout. Why do the banks still hold title?
Yeah...I guess that whole Berlin Wall - Tienanmen Square - Soviet Collapse were all staged...
Americans are apathetic. Just look at Greece, Portugal and the other European nations. National strikes from the bank bailouts and now more because of cutbacks.
That isn't happening here. Best we did was tie up the WH email and phone lines.
Instead of reducing the principal, why don't they just extend the loan to 40 years? That way the owner gets a lower payment, the bank gets paid eventually, and the public (AKA taxpayers) don't have to participate in subsidizing loans.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
