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Old 02-19-2009, 11:20 AM
 
Location: Montana
2,203 posts, read 9,298,593 times
Reputation: 1130

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So . . . what did you think of the proposed Housing Plan presented yesterday?
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Old 02-19-2009, 12:34 PM
 
4,145 posts, read 10,400,769 times
Reputation: 3338
It's really a bait and switch. They went through all the trouble to make everyone think they're getting assistance, but when you look at it, banks don't have to do anything they don't want and the criteria are almost impossible to meet for someone that's already having financial issues.

Ladies and gentlemen....welcome to the next four years! Say one thing, do another.
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Old 02-19-2009, 01:40 PM
 
Location: Salem, OR
15,513 posts, read 40,257,352 times
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I'm with Kev. The fact that it is voluntary on the part of banks isn't a good plan.
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Old 02-19-2009, 02:21 PM
 
Location: Montana
2,203 posts, read 9,298,593 times
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I thought there were a few bright spots in the plan. However, one thing that I think is a Catch-22 is that the re-fi's to lower interest rates are only available if the amount owed on the home is less than 105% of it's market value. That means that homes purchased with 90% to 100% financing (which was typical in 2005/2006 could not have lost more than 5-15% of their market value. Sorry, but most markets have seen drops of much more than that from their peak in 2006.

Ex. Homebuyer purchase home at peak in 2006 for $300,000.
Put 5% down (pretty typical) <$15,000>
Loan balance $285,000.
Market value for refi must be no less than $271,000. (If they went 100% financing at the outset, then the market value would have to be at least $285,000 in order for them to re-fi.)
Current market value in many areas will probably be anywhere from $270,000 (10% drop in home prices from peak) to $180,000 (40% drop in home prices - such as Las Vegas, Phx, and So. Cal.)

In other words, I don't see how this plan is going to help homeowners in the areas hardest hit by the downturn and high foreclosure rates).
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Old 02-19-2009, 02:57 PM
 
Location: Salem, OR
15,513 posts, read 40,257,352 times
Reputation: 17383
Quote:
Originally Posted by Gretchen B View Post
I thought there were a few bright spots in the plan. However, one thing that I think is a Catch-22 is that the re-fi's to lower interest rates are only available if the amount owed on the home is less than 105% of it's market value. That means that homes purchased with 90% to 100% financing (which was typical in 2005/2006 could not have lost more than 5-15% of their market value. Sorry, but most markets have seen drops of much more than that from their peak in 2006.

Ex. Homebuyer purchase home at peak in 2006 for $300,000.
Put 5% down (pretty typical) <$15,000>
Loan balance $285,000.
Market value for refi must be no less than $271,000. (If they went 100% financing at the outset, then the market value would have to be at least $285,000 in order for them to re-fi.)
Current market value in many areas will probably be anywhere from $270,000 (10% drop in home prices from peak) to $180,000 (40% drop in home prices - such as Las Vegas, Phx, and So. Cal.)

In other words, I don't see how this plan is going to help homeowners in the areas hardest hit by the downturn and high foreclosure rates).
I agree. It would have to be at 125% of value to help those folks and more in those really hard hit areas.
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Old 02-19-2009, 03:44 PM
 
Location: Barrington
63,919 posts, read 46,527,253 times
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Much Ado About Nothing. I think it's noise, not necessarily a bad thing.
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Old 02-19-2009, 04:17 PM
 
Location: NorthTexas
634 posts, read 1,555,104 times
Reputation: 327
Are we all talking about the same thing? I saw this on the NYT website.

The New Housing Plan - Interactive Graphic - NYTimes.com

This looks very significant to me, what am I missing?
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Old 02-19-2009, 06:21 PM
 
Location: Montana
2,203 posts, read 9,298,593 times
Reputation: 1130
Quote:
Originally Posted by EllenArlingtonPark View Post
Are we all talking about the same thing? I saw this on the NYT website.

The New Housing Plan - Interactive Graphic - NYTimes.com

This looks very significant to me, what am I missing?
That was a couple of bytes from the package. There were other things in the plan that I thought would possibly be of more benefits . . . and a couple of things that may prove pretty useless here in the trenches.
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