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Old 01-03-2009, 01:39 PM
 
19,123 posts, read 20,697,215 times
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Quote:
Originally Posted by bls5555 View Post
No you wouldn't get the money. The govt. would pay the difference on your mortgage to the bank.

You would walk away with zilch, but you wouldn't be upside down. The bank gets the money owed, the price of the house has now been corrected with zero pain for everyone.

Your sister would now have a 200k mortage on the house. Your original mortgage of 500,000 or whatever it was would be paid off. You wouldn't get any cash on the deal. It just pays off the upside down part of the mortgage.

That's what I got from the original post. I would think this would be much more helpful than the current bailout going on.
So how is this any different than PMI? Instead of transferring risk to private industry, you want to transfer risk to the taxpayers? You want the US government to bankrupt taxpayers instead of a private company? This is better? If the government WAS holding the mortgage insurance instead of private industry, we will be trillions down the hole...
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Old 01-03-2009, 01:56 PM
 
Location: Orlando, Florida
43,857 posts, read 45,554,548 times
Reputation: 58647
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?
I think it would probably be better for Americans to become better home shopping consumers. So many people buy on impulse or think they have to live in something comparable with homes they see on television instead of making choices based on actual need, instead of greed, and their income. Young couples used to buy starter homes...now they feel pressured to buy into newly built neighborhoods with more space than they need and for a price they can't afford.
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Old 01-03-2009, 02:36 PM
 
3,722 posts, read 4,721,353 times
Reputation: 4751
So the government is now an entity for the purpose of protecting people from themeselves? To bail out people for making bad decisions?
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Old 01-03-2009, 03:20 PM
 
19,123 posts, read 20,697,215 times
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In that case, I like to gamble my entire fortune away and demand compensation in full from the government...
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Old 01-03-2009, 03:31 PM
 
2,153 posts, read 5,089,481 times
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Quote:
Originally Posted by evilnewbie View Post
So how is this any different than PMI? Instead of transferring risk to private industry, you want to transfer risk to the taxpayers? You want the US government to bankrupt taxpayers instead of a private company? This is better? If the government WAS holding the mortgage insurance instead of private industry, we will be trillions down the hole...
I didn't say I wanted to do this. I was just stating what I thought the OP was talking about and asked how it is any worse than all the bailouts going on right now.
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Old 01-03-2009, 03:36 PM
 
16,308 posts, read 25,590,611 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?
Short answer
NO

People cannot and should not be protected from their own stupidity.

Next you'll want guarantees that you won't loose money in the stock market, and that the groceries you buy at the store won't go bad before you eat them.

Waaaaa I want my nanny
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Old 01-03-2009, 03:44 PM
 
Location: Where the sun likes to shine!!
20,522 posts, read 27,069,568 times
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Quote:
Originally Posted by CosmicWizard View Post
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 government 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.
I don't believe in "any" bailouts for people or businesses. If you are responsible, save your money, and live within your means you will be OK. If you are a business and you produce a good product or service and charge a fair price you will have a good business.

So no I don't believe anyone should be bailed out. Especially when it was our government telling the American people that we should all have a house. Spend spend spend. What a bunch of morons. I'm sorry but if you can't afford something then you shouldn't have it.
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Old 01-03-2009, 05:53 PM
 
Location: Wherabouts Unknown!
7,771 posts, read 17,241,742 times
Reputation: 9352
younglisa7 wrote:
I'm sorry but if you can't afford something then you shouldn't have it.
IMO, this is not something to feel sorry about. If someone cannot afford to buy something, that's just the way it is. Your sorrow, or the sorrow of anyone else will not put even an extra nickle into their pocket. All your sorrow is doing is upsetting yourself over something that you can't even control. Let it go and move on.
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Old 01-06-2009, 06:46 AM
 
Location: Hope, AR
1,505 posts, read 2,856,735 times
Reputation: 248
maybe they can insure stock prices too

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?
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Old 01-06-2009, 08:48 AM
 
Location: Wherabouts Unknown!
7,771 posts, read 17,241,742 times
Reputation: 9352
While we're at it, let's insure grocery prices, clothing prices, oil prices etc. I'm only half joking. If the prices of EVERYTHING stayed the same it would eliminate the speculators and market manipulators, and they'd all have to get real jobs and do something productive.
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