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But the increase in money aggregates (ie: u.s. dollars via treasuries) will increase prices
The amount of new debt that will be created from the housing bill is just a fraction of what was created when they passed the stimulus bill. The correlation to government debt and inflation is fuzzy at best, and even if there was a strong correlation the new debt created by the bill is relatively small.
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The lenders helped them get into this mess; let the lenders help them get out.
They are trying to prevent a total meltdown. The option at this point is to bail some people out or let the next depression happen. I prefer the former.
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Did the part of the bill pass that would give folks who DO NOT itemize a $1000 (500 for a single person) deduction for real estate taxes?
I believe this was added, but its possible they removed it last minute.
Location: Georgia, on the Florida line, right above Tallahassee
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Originally Posted by k374
The lenders will select their loans most likely to default and have it reinsured via this housing bill. This means that the default rates will be sky high. The borrower will lose the house anyway but the lender gets paid by Fannie/Freddie. It is another way to bail out the lenders and nobody else...it's corporate welfare.
So in my neighborhood it isn't going to affect many people although 60 homes out of 400 are in foreclosure. Many are investors or people who's job was real estate related.
What are they going to do with people who lied on their application? I read that they will refinance up to a certain amount the people can afford. If people lied and the amount was increased and the home value went down a lot, that can make the new mortgae very low and I wonder if a mortgage company will accept it, because they can refuse, if I read it the right way.
We have 3 foreclosures waiting to foreclosed in our street. I convited felon realtor not paying for over a year (mortgage) and not having a job just sitting at home and can't afford to refinance...from no income..! The other one already left the house Nov '07 and still not foreclosed on but the house is empty and they moved out of State (or are they going to try to refinance and get the people back her? lol), than another investor who has renters and is collecting the rent but stopped paying the mortgage, same around the corner....so IMO nothing will help over here. Than we have a family who bought the house for $ 325K and soon after closing got a scrupless appraiser to appraise it for $ 400 K and the refinanced soon after for that amount, of course the value went down...Are people like this going to be forgiven? There tax lien was auctioned just like the other home of the realtor...what will be done with that....than there are car loans and they make sure the cars are parked in the garage so repo can't tow them, one other owner wasn't so lucky he tried to park every where but our HOA doesn't allow street parking so options run out pretty soon for him and gone was his car....the new fitness equipment was in the garage.....so no car could fit in there...no job, just fitness and instead of putting the payments towards the car, no the fitness equipment had to be bought, not 1 fitness equipment, no the whole equipment package, .....
And others are paying and nothing is done for them! I'm glad I read they have to pay back at closing when the sell soon.
I agree that it's corporate welfare, but it's not going to solve the problem. Selectively giving 400,000 homeowners Christmas in July is a drop in the bucket. It will escalate the problem by royally hacking off everyone not getting this "bonus" and giving anyone so inclined an out clause. Those not helped will walk away even faster, those sitting on the fence will feel justified in defaulting and those not in trouble are now even more incensed that their tax dollars are being squandered to help those who got us into this mess. It will put an unmanageable burden on the taxpayers, divide the country and put the U.S. in unprecedented debt.
That depression will be averted when foreigners bail us out. It appears unlikely that we still have the power and the wherewithal to save ourselves. Other countries and foreign investors will have a bigger piece of us and we will no longer be independent.
when fannie/freddie pay 90% of the appraised value of the home to bail out the lenders and housing prices continue to decline anyway, the tax payer will once again get raped as the quasi government agencies have no choice but to realize the losses. essentially, we the tax payer get all of this toxic paper and foot the bill instead of the people who made these loans to begin with. We'll be taxed through inflation as the federal reserve will have to create more money as debt. when is this going to end?
when fannie/freddie pay 90% of the appraised value of the home to bail out the lenders and housing prices continue to decline anyway, the tax payer will once again get raped as the quasi government agencies have no choice but to realize the losses. essentially, we the tax payer get all of this toxic paper and foot the bill instead of the people who made these loans to begin with. We'll be taxed through inflation as the federal reserve will have to create more money as debt. when is this going to end?
When the government tries to close all loopholes in getting out of the dollar. Make owning some commodities illegal (the State seizing farms or forcing sales of proceeds from said farms for "the greater good", trying to confiscate gold/platinum/palladium/silver, etc)
Then proceed to convert currency. 1000 old dollars = 1 new dollar. Wipe out the middle and upper middle class.
The amount of new debt that will be created from the housing bill is just a fraction of what was created when they passed the stimulus bill. The correlation to government debt and inflation is fuzzy at best, and even if there was a strong correlation the new debt created by the bill is relatively small.
Sorry, I got to call you on this response.
Government Spending is always the cause of inflation. I don't think $300 billion dollars compared to our annual budget spending. But if you look at all the other bailouts and loans we have made it will all add up to a whole lot more of inflation coming to all of us.
Government Spending is always the cause of inflation
Increase in credit and the money supply generally cause inflation, government spending may or may not cause inflation. It depends on the nature of the spending.
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