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Old 05-02-2013, 08:17 PM
 
Location: San Antonio Texas
11,435 posts, read 15,036,457 times
Reputation: 5224

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The talking heads on the liberal MSNBC show now are discussing how the gov't intervention helps the taxpayer, but they don't say "HOW"? They are even proposing reducing principal owed in situations where the property is "upside down". Why does the bank or gov't have to prop up everybody's failure in this country? You bought a home, it's worth less, why not take your lumps? Why must gov't throw $$ on these people and the banks? Again, those that pay their bills and are by and large "responsible" are the ones who get taken for a ride.
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Old 05-02-2013, 08:38 PM
 
3,193 posts, read 6,676,423 times
Reputation: 3738
Let's see if we can hack through that, and find an actual question.....

Principal reductions for people who are "upside down," let's start there. EVERYONE who owned a home experienced loss in value, some more than others. Most due to things out of their control. Yes, even the precious "responsible ones" fell victim to rampant foreclosures drastically reducing their property value.

So, your premise seems to be eating your intended point.

Please elaborate as to how this might be a vehicle that will take the Responsible Ones for a ride, as this is one of the first measures that addresses the plight of the Responsible Ones.
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Old 05-02-2013, 09:10 PM
 
Location: Home of the Braves
1,164 posts, read 842,305 times
Reputation: 1148
Assuming this is a genuine question and not a rant, the CBO just released a housing policy analysis, which prompted this sort of coverage in the media.

"The Congressional Budget Office's (CBO) analysis shows that providing loan reductions for borrowers underwater on their mortgages through the Home Affordable Modification Program (HAMP) could save taxpayers billions of dollars, avoid thousands of unnecessary defaults and provide a boost to the economy."

CBO report: Principal reductions could save billions - The Hill's On The Money

So I guess there are three reasons I might want the government to pursue a policy such as this:

1. It saves me money as a taxpayer.
2. It keeps people in their homes and avoids unnecessary foreclosures.
3. It strengthens the economy.

On the other hand, the market never fails and the gubmint never succeeds, so...FREEDOM!!!
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Old 05-02-2013, 10:17 PM
 
7,482 posts, read 6,260,638 times
Reputation: 7069
Quote:
Originally Posted by Pfhtex View Post
Let's see if we can hack through that, and find an actual question.....

Principal reductions for people who are "upside down," let's start there. EVERYONE who owned a home experienced loss in value, some more than others. Most due to things out of their control. Yes, even the precious "responsible ones" fell victim to rampant foreclosures drastically reducing their property value.
Those who owned before the bubble only lost the inflated value. When the bubble burst and home prices started to normalize, they really lost nothing.

Quote:
Please elaborate as to how this might be a vehicle that will take the Responsible Ones for a ride, as this is one of the first measures that addresses the plight of the Responsible Ones.
Who is going to end up paying for it?

Responsible people didn't take out loans they could never afford/qualify for BEFORE they magically could.
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Old 05-02-2013, 10:23 PM
 
Location: Home of the Braves
1,164 posts, read 842,305 times
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Quote:
Originally Posted by Sawdustmaker View Post
Who is going to end up paying for it?
We're talking about GSE loans. As taxpayers, we're on the hook for them. The only question is, do you want to save a few billion and avoid some unnecessary foreclosures, or do you want to stand on principle and let taxpayers eat the losses?
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Old 05-02-2013, 10:29 PM
 
7,482 posts, read 6,260,638 times
Reputation: 7069
Quote:
Originally Posted by Cameron H View Post
Assuming this is a genuine question and not a rant, the CBO just released a housing policy analysis, which prompted this sort of coverage in the media.

"The Congressional Budget Office's (CBO) analysis shows that providing loan reductions for borrowers underwater on their mortgages through the Home Affordable Modification Program (HAMP) could save taxpayers billions of dollars, avoid thousands of unnecessary defaults and provide a boost to the economy."

CBO report: Principal reductions could save billions - The Hill's On The Money

So I guess there are three reasons I might want the government to pursue a policy such as this:

1. It saves me money as a taxpayer.
2. It keeps people in their homes and avoids unnecessary foreclosures.
3. It strengthens the economy.

On the other hand, the market never fails and the gubmint never succeeds, so...FREEDOM!!!
You left out:

Quote:
When compared with the approximately 3 million borrowers who are at least three months delinquent on their mortgages, the optionsí expected positive effects on the housing market nationally and on the economy as a whole would be small," the report said.
Where is the debt going to go?
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Old 05-02-2013, 10:32 PM
 
7,482 posts, read 6,260,638 times
Reputation: 7069
Quote:
Originally Posted by Cameron H View Post
We're talking about GSE loans. As taxpayers, we're on the hook for them. The only question is, do you want to save a few billion and avoid some unnecessary foreclosures, or do you want to stand on principle and let taxpayers eat the losses?
Where is the debt slated to go?

Just disappear?
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Old 05-02-2013, 10:34 PM
 
Location: Home of the Braves
1,164 posts, read 842,305 times
Reputation: 1148
We're only talking about loans held by Fannie/Freddie and using HAMP eligibility rules. So it's very true that this is just a subset of all potential foreclosures nationally. But...

Quote:
Where is the debt going to go?
We're only talking about loans held by Fannie/Freddie. You and I already own "the debt." We can either let all these homes go into foreclosure and write it off (i.e. what we've been doing), or we can reduce principal and save a few billion.

ETA: By the way, I think it blows that taxpayers are on the book for these loans. I don't think the federal government needs to be underwriting mortgages the way we've been doing. So if you want to couple the cram-down with a winding down of Fannie/Freddie, that seems like a perfectly reasonable approach to me.
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Old 05-02-2013, 10:45 PM
 
7,482 posts, read 6,260,638 times
Reputation: 7069
Quote:
Originally Posted by Cameron H View Post
We're only talking about loans held by Fannie/Freddie and using HAMP eligibility rules. So it's very true that this is just a subset of all potential foreclosures nationally. But...



We're only talking about loans held by Fannie/Freddie. You and I already own "the debt." We can either let all these homes go into foreclosure and write it off (i.e. what we've been doing), or we can reduce principal and save a few billion.
Don't forget about Ginnie Mae.

Let's hope so. If this initiative actually saves a few billion, great.

I just see creative accounting coming ....


Quote:
ETA: By the way, I think it blows that taxpayers are on the book for these loans. I don't think the federal government needs to be underwriting mortgages the way we've been doing. So if you want to couple the cram-down with a winding down of Fannie/Freddie, that seems like a perfectly reasonable approach to me.
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Old 05-02-2013, 10:46 PM
 
Location: San Antonio Texas
11,435 posts, read 15,036,457 times
Reputation: 5224
Quote:
Originally Posted by Pfhtex View Post
Let's see if we can hack through that, and find an actual question.....

Principal reductions for people who are "upside down," let's start there. EVERYONE who owned a home experienced loss in value, some more than others. Most due to things out of their control. Yes, even the precious "responsible ones" fell victim to rampant foreclosures drastically reducing their property value.

So, your premise seems to be eating your intended point.

Please elaborate as to how this might be a vehicle that will take the Responsible Ones for a ride, as this is one of the first measures that addresses the plight of the Responsible Ones.
By artificially preventing irresponsible borrowers from being foreclosed on, housing prices remain stubbornly high and prevent potential homebuyers from affording a home, espec in places like so california and other major cities.
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