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Old 01-01-2009, 12:10 PM
 
Location: Wouldn't you like to know?
9,114 posts, read 15,971,025 times
Reputation: 3698

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Quote:
Originally Posted by 58robbo View Post
great question, i'd love the real estate cheerleading crew to answer that one. fmv, you around?
I mean, don't we already have enough to boost housing? (FHA loans, mortgage deduction, new home buyer's "credit", extremely low interest rates etc.)

Isn't that enough? Or do the lobbyists (ie NAR, NAHB, etc) keep having to push to ruin this country?

Why can't we go back to common sense where people actually they had a down payment and had to prove they were making a decent income so they can afford a home?
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Old 01-01-2009, 12:23 PM
 
2,153 posts, read 5,088,266 times
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Quote:
Originally Posted by KevK View Post
This is an idea that I thought of- instead of tossing all the billions at trying to boost home values on the mortgage side, why not instead insure home values at the purchase price for homeowners? If the government were to insure homes at the price you buy them at- much like the FDIC does with banks- and you know your home can never lose value, this would do more to boost confidence in the markets than anything else. What do you think?

Are you saying something like this?

Person A Buys a house for $350,000 and buys this insurance that you are talking about. They pay a certain amount of money each month with their mortgage.

Person B buys it 2 yrs later for $275,000. Because person A bought this insurance and paid on it for 2 years, the govt. would then pay off the difference in their mortgage.

If the price rose then it would just be free money paid by the homeowner for 2 yrs for the Govt as there would be no difference for them to pay off?

Is that what you are talking about? The Govt. becomes a state farm of sorts?
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Old 01-01-2009, 03:35 PM
 
Location: Rockland County New York
2,984 posts, read 5,341,569 times
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Let supply and demand or better yet ability for people to purchase a home decides the market value of a home. Why should the government step in and insure loss? Not a good idea since home were way, way over priced any way.
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Old 01-01-2009, 04:34 PM
 
Location: Seattle, WA
209 posts, read 549,205 times
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Quote:
Originally Posted by KevK View Post
This is an idea that I thought of- instead of tossing all the billions at trying to boost home values on the mortgage side, why not instead insure home values at the purchase price for homeowners? If the government were to insure homes at the price you buy them at- much like the FDIC does with banks- and you know your home can never lose value, this would do more to boost confidence in the markets than anything else. What do you think?
NO, markets do not work like that. Why do we as a society are starting to make anything a sure thing, there really is no such thing. Prices go up and down and that is natural.
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Old 01-01-2009, 09:28 PM
 
Location: Chesterfield, VA
1,220 posts, read 4,660,887 times
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Okay, let me play devil's advocate... doesn't the government already insure certain homes/mortgages? VA home loans for instance. If the homeowner forfeits, the VA pays the lender the amount still owed on the loan. In essence, the homeowner did "pay" for this insurance by means of the funding fee when he purchased the home, but most just roll the fee into the loan. Also, depending on the disability rating of the buyer, that fee may be waived.
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Old 01-02-2009, 03:01 PM
 
2,153 posts, read 5,088,266 times
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Can someone explain to me why this plan would be any worse than just bailing out banks?

What I posted at the top of page 2.

There would be NO artificial propping up of housing prices and people would be free and clear of a house that otherwise would just go to foreclosure.

People would have an incentive to price the house correctly and get it moved without having to even think about walking away.

I don't quite see how this would be worse than what is going on right now.
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Old 01-02-2009, 03:22 PM
 
Location: Wouldn't you like to know?
9,114 posts, read 15,971,025 times
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Quote:
Originally Posted by bls5555 View Post
Can someone explain to me why this plan would be any worse than just bailing out banks?

What I posted at the top of page 2.

There would be NO artificial propping up of housing prices and people would be free and clear of a house that otherwise would just go to foreclosure.

People would have an incentive to price the house correctly and get it moved without having to even think about walking away.

I don't quite see how this would be worse than what is going on right now.

We don't need Govco to be an insurance agent. The less they affect me, the better.

Again, what is wrong w/the housing market correcting itself where prices will stabilize when homes become more affordable? Most people do pay their mortgages every month in full.

I was for the gov't giving banks money so the credit problem could stabilize. Now, every Tom, Dick, & Harry is asking for money...its gotten way out of hand.

Again, no need for them to become an Allstate....
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Old 01-02-2009, 04:21 PM
 
3,283 posts, read 4,758,894 times
Reputation: 753
Quote:
Originally Posted by bls5555 View Post
Can someone explain to me why this plan would be any worse than just bailing out banks?

What I posted at the top of page 2.

There would be NO artificial propping up of housing prices and people would be free and clear of a house that otherwise would just go to foreclosure.

People would have an incentive to price the house correctly and get it moved without having to even think about walking away.

I don't quite see how this would be worse than what is going on right now.

i can't give you a reason as to why it would be worse tham bailing out the banks because i was vehemently opposed to that too. all bailouts create an environment where we're overly reliant on government for our livelyhoods. imo, loss of economic liberty and loss of liberty as a whole are the same thing
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Old 01-02-2009, 04:30 PM
 
Location: Wherabouts Unknown!
7,771 posts, read 17,234,879 times
Reputation: 9352
Default The lesser of two evils!

younglisa7 wrote:
Why should the gov't insure something that someone bought when it was overpriced? Should they also insure the Mac mansions that 2 people are living in? Homes should lose value if your neighborhood goes to crap, if there are no jobs there, etc. Real estate is not a guaranteed investment.
Well, that's true, but look at it this way. The guvment is throwing our money away anyway, and this would be far less costly. I'd rather see the guvment reward the idiotic behaviour of middle class idiots than rewarding the criminal behaviour of the uber wealthy criminals who run the financial system. IMO, the OPs idea is by far the lesser of two evils.


onevthoki wrote:
Okay, let me play devil's advocate... doesn't the government already insure certain homes/mortgages? VA home loans for instance. If the homeowner forfeits, the VA pays the lender the amount still owed on the loan. In essence, the homeowner did "pay" for this insurance by means of the funding fee when he purchased the home, but most just roll the fee into the loan. Also, depending on the disability rating of the buyer, that fee may be waived.
I'm not a big fan of the military, but I've been there and done that (Air Force during the VietNam era ) so I know what it's like to be government property. Being in the military SUCKS, and the people who put up with that crap earn their VA benefits. The government ought to be buying their houses outright. Charging a vet points for a VA loan is absolutely immoral IMO. Requiring a vet to pay taxes is also immorral IMO. Unless you are a high ranking officer, everyone else in the military is getting screwed wether they are willing to admit it or not. I'm all in favor of giving them a BIG break in regards to housing. They deserve it, even if they can't afford it. If the guv can bail out the criminals who run the financial system, they can easily afford to help the vets.

Last edited by CosmicWizard; 01-02-2009 at 04:52 PM..
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Old 01-02-2009, 04:57 PM
 
28,453 posts, read 73,536,850 times
Reputation: 18485
There are lots of complicated issues around what the Treasury Sec did to get the TARP thing set up -- haste seemed to be needed as the global credit markets were sorted headed off a cliff. To stop that, the decision he (and the rest of the advisors and Federal Reserve leadership) come up with was to "back stock" bad debt. If the reason that the debt was bad is looked at, it is pretty clear that is is NOT because of falling home prices, but some confidence failures on the part of big money center banks and investment houses around the world. Most of the confidence SEEMS to have been shored up, at least to the point where deals to marry off these kinds of firms actually happened (like today --http://money.cnn.com/2009/01/02/news/companies/indymac/?postversion=2009010215 Wells Fargo closes on $12.7B purchase of Wachovia - Triangle Business Journal: BofA completes $33B Merrill Lynch purchase <br> while Wells Fargo closes $12.7B Wachovia deal - Providence Business News (http://www.pbn.com/stories/37128.html - broken link) ) that looks pretty good...

The question of INDIVIDUALLY backstopping declines in home prices would be another kind of confidence building effort, targeted not at these TENS OF BILLIONS at-a-crack deals, but Joe Sixpack "closiing" on a place for 3x his salary. My gut tells me that there are PLENTY of places prices right, but still too buyers that have had the C_R_A_P scared out of 'em to pull the trigger. Restoration of confidence to mainstreat could convivably be a voluntary "opt in" thing for buyers, or with the right framework, even sellers. The cost of "home VALUE warranty" might be a pittance if the exclusions were handled properly. THink of the companies that sell "home repair warranties"...

Different problem, different solution.
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