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One would think so... but one would also think that nobody in their right mind would have a mortgage loan "eight or more points above prevailing rates"...!
Seems to me that IF there's nothing fishy to a loan, adhering to standards and guidelines shouldn't be an issue now, should it?
It also seems to me that the mortgage brokers and issuers fighting against this are fighting because it's more work for the same loan... or more work for a less-profitable loan... so of course they would fight it. Besides which, those few who are taking advantage of the desperate & uninformed and therefore are making the most profit would shout the loudest, as they have the most to lose.
imho, it's a case of the few bad apples in the industry tarnishing the industry as a whole... so like you say, they made the mess, and therefore yes, they need some additional oversight, unfortunately. Not for Joe Average consumer, but to protect those who have proven they obviously cannot protect themselves. How sad.
As usual, regulators are likely to over-react and react too late. They will no doubt enact restrictive laws for political points that will further tighten the already tight residential loan market.
I would want them to leave it alone and let the market work it out. No bail-outs, no special regulation to allgedly protect any one. Just get back to the fundamentals of loaining money to people who can afford to pay it back.
Would much rather the time and effort be spent on the plight of well-paying, secure American jobs. That would facilitate a return to equalibrium faster than anything, IMHO.
I agree. The market has to work itself through. Already passed legislation is making it harder for the market to do it's work. The Home Equity Theft Protection Act, passed last year has many legitimate investors shying away from buying homes where the homeowner is facing foreclosure. The net result of this legislation, while well intentioned, is that many people who might have avoided foreclosure through a sale have no real option except to let the bank take the home and have their credit ruined in the process.
I disagree with the let the market work it out theory. As much as I don't think people should get bailed out, something needs to be done in order to stabilize the market. LI isn't all that bad for the most part, but there are sections of the country where there are a huge amount of homes that are on the brink of forecolosure.
This will
A) kick people out of there homes. - OK fine
B) cost the bank and the homeowner a lot of money. OK fine
C) tank the market in those areas - eehhh OK
D) create sections consisting of boarded up bank owned properties with uncut grass, theft and vandelism. This is bad for everyone
The last reason is why we need to have some sort of workout. Also, the industry had its chance to regulate themselves. They failed. I don't think the legislative proposals seem all that extreme. Yes regulation doesn't stimulate loans, but frankly do we really want to have more of that worthless paper out there?
So because a lot of americans were responsible in buying what they could afford, or not buying, they should bear the burden of bailing out those who were not?
Stop with the American handouts, teach people responsibility.
D can be fixed with a active community. Use my tax dollars to build those instead, instead of bailing out whoever bought those 50 inch LCD TV's, stainless steel appliances, brand new BMW's to go with their unaffordable house.
Edit: Am I Bitter? We try to teach our kids to be responsible for their actions, and yet we'll let those who are not off? That is a bad message, I could start a whole post on that subject alone.
Edit: Those who could afford their homes at 6% rates, their loans should be modified... Those who got those teaser 2% interest rates should be reset to 6% if they cant afford it, start looking for some place else to live.
Do you hear some of these stories?? .... "I'm going to get foreclosed on anyway might as well steal everything in the house, not pay my mortgage for 6 months then get kicked out...." "Can I not pay my mortgage buy a second house, then just lose the first house.." Some of these people bought their homes with 0% down, so they lose NOTHING.
And they should be Bailedout?
Last edited by JustBored; 04-29-2008 at 12:57 PM..
Still about jobs and unemployment for me. Extend unemployment insurance past the current term, Bush nixed that one on the last bail out plan. Says he doesn't want to create an air of dependence. Bail out the big boys in big ways, but let's not give some guy making $80 grand a year a few extra weeks of unemployment in a job market that can take a year to year and half to find a job. Brilliant.
Give people a means to pay for the decisions they made. For some caught up in the housing crisis, there would have been a personal financial crisis of some sort for them any way.
It's the all American do-right families who bought during the bubble, put a huge chunk of their money down on a home and got a loan fair and square and smart that I'm concerned about supporting. Many are finding themselves upsidedown on their mortgage and fearing unemployment due to layoffs a la Bear Stearns.
Let's make sure they don't lose their income and that they are able to stay above water and ride this thing out long enough so they can realize some semblance of equity -- enough so they are no longer underwater at least. By default, those who spun the wheel of RE chance will also have more opportunity to dig themselves out if they are able to stay employed.
On the one hand, they made this mess, so they may need more oversight.
The mess is. at least partially, due to Congressional Democrat interference by regulation (for the moment, I forget the name of the gov't program) that forced many mortgage issuers to issue mortgages to "minorities" that had less than stellar credit ratings.
So, please no more gov't regulation.
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