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Seeking opinions on government plan to bailout mortgage lenders, banks, struggling homeowners, bailout good for economy or negative, big brother intervention
Location: Sitting on a bar stool. Guinness in hand.
4,428 posts, read 6,510,291 times
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Quote:
Originally Posted by Evey
My understanding of the big bailout is that it is not going to help that many people. You have to be many months behind on your mortgage and have a minimum amount of equity to qualify. Not many of the folks around here have anything that resembles equity.
"Still, even with reforms, some borrowers could be left out in the cold, according to Alec Crawford, mortgage-backed securities strategist at RBS Greenwich Capital. In a note, he wrote that apparently the FHA is only considering breaks for borrowers with so-called "5/1" and "7/1" adjustable-rate mortgages, not "2/28" subprime loans.
"Any change of the type we expect would probably have a small impact on the subprime market," Crawford said. "
One of the "recommendations" that is being made is to NOT raise that interest on an ARM and/or bring it down - along with the corresponding payment. For those who are NOT in default, this may save them from GETTING into a default.
Another will be, for those in arrears, let the lender issue a "forbearance" - tack the arrearage to the backside of the loan - extend the loan life. Additionally, and where appropriate, forebear a period of time -
Many loans are "insured" by PMI or MIP - this will also help keep the Mtg Insurance programs in decent shape -
On your china comment: agreed. But why make it worse.
On the Depression comment: If it did happen (which is very unlikely because of globalization) I don't have a problem because I know in the short run it will really suck. But in the long run it will teach America not to become heavily debt dependent.
But like I said don't think a depression is coming. Maybe a recession. Maybe a deep recession. But as usual America will survive it and move on.
Btw I've worked blue collar and White collar jobs, I've worked for peanuts and good money. I will so do what ever it takes to survive if thing get lean. So I'm not scared of a depression. Why are you?
Hmmm, I'm guessing your too young (as am I) to have lived through the last depression to be so cavalier about it. From what I've read,studied and been told by the old folks in the family it was no picnic and not something to take lightly. There isn't the ability in todays world to grow food at most peoples houses like there was back then or have ones own milk cow and forget buying much because your money (if you have any) won't be good for much. I'm happy you're willing to work but that won't help if most companies go belly up. Not to mention all the seniors who's life savings and everything they've worked for goes "poof" and they are pennyless. Why would anyone want to wish food lines,people pretty much starving to death and many losing everything if it can be avoided? I sure don't.
Location: Sitting on a bar stool. Guinness in hand.
4,428 posts, read 6,510,291 times
Reputation: 1721
Take it to heart.
Quote:
Originally Posted by jimj
Hmmm, I'm guessing your too young (as am I) to have lived through the last depression to be so cavalier about it. From what I've read,studied and been told by the old folks in the family it was no picnic and not something to take lightly. There isn't the ability in todays world to grow food at most peoples houses like there was back then or have ones own milk cow and forget buying much because your money (if you have any) won't be good for much. I'm happy you're willing to work but that won't help if most companies go belly up. Not to mention all the seniors who's life savings and everything they've worked for goes "poof" and they are pennyless. Why would anyone want to wish food lines,people pretty much starving to death and many losing everything if it can be avoided? I sure don't.
I can be avoided if we take a recession now. And learn the lesson early enough to save our selves. Putting more money out there is going to drag on this credit addiction we have and devalue the dollar. We need to stop now! And start saving again and make the dollar strong.
As for the depression. I sure was not alive back then and by what you say you were not either. We can only hear the stories of and older generation and take there warnings to heart. They didn't get themselves in to heavy credit because they learn the real hard way that is not a good thing. What your suggesting in lowering the interest rate is the wrong path and it will lead to a depression in the end. How much can you cut before our money is completely useless? How much can we barrow before the debts come due? We need to keep the dollar strong and we need to kick the debt. You can only barrow so much before you have to pay the piper and the piper is playing the last song.
As for what a 21 depression if it did happen. We both don't know what it will look like. I don't believe it going to look like the last depression. All I know is that as a nation we would survive it and probably be a better nation for it. I am not afraid to face hardship if it makes us strong in the end.
In part that article states:
"Under the plan, the Federal Housing Administration's mortgage insurance program will be changed to allow more people to refinance with FHA insurance if they fall behind on adjustable-rate mortgages.
People who have missed mortgage payments are now ineligible for FHA insurance."
I'm sorry, but if a critical criteria for receiving help is that a person MUST fall behind on their mortgage payments, isn't that just going to encourage people not to tighten their belt to pay their mortgage, but rather to start missing payments so that they can take advantage of the program? Or am I missing something here?
I can be avoided if we take a recession now. And learn the lesson early enough to save our selves. Putting more money out there is going to drag on this credit addiction we have and devalue the dollar. We need to stop now! And start saving again and make the dollar strong.
As for the depression. I sure was not alive back then and by what you say you were not either. We can only hear the stories of and older generation and take there warnings to heart. They didn't get themselves in to heavy credit because they learn the real hard way that is not a good thing. What your suggesting in lowering the interest rate is the wrong path and it will lead to a depression in the end. How much can you cut before our money is completely useless? How much can we barrow before the debts come due? We need to keep the dollar strong and we need to kick the debt. You can only barrow so much before you have to pay the piper and the piper is playing the last song.
As for what a 21 depression if it did happen. We both don't know what it will look like. I don't believe it going to look like the last depression. All I know is that as a nation we would survive it and probably be a better nation for it. I am not afraid to face hardship if it makes us strong in the end.
I guess what I'm missing is how shafting the average person will lower our debt? It's not PERSONAL debt that is killing us as a whole, it's national debt and the only way to fix that is to cut back on government spending. Lowering rates will not cause the government to borrow more (or less) but will stimulate consumer growth and tax payments. Now if we could get the government to stop shoveling it out the door faster than it comes in......
Location: Sitting on a bar stool. Guinness in hand.
4,428 posts, read 6,510,291 times
Reputation: 1721
What are you talking about?
Quote:
Originally Posted by jimj
I guess what I'm missing is how shafting the average person will lower our debt? It's not PERSONAL debt that is killing us as a whole, it's national debt and the only way to fix that is to cut back on government spending. Lowering rates will not cause the government to borrow more (or less) but will stimulate consumer growth and tax payments. Now if we could get the government to stop shoveling it out the door faster than it comes in......
American's personal saving rates have been negative since 2005. People have been financing themselves through credit cards, refinancing on homes, and other types of loans and saving nothing. We are a debtor nation. Both personally and as a country. If we lower rates, people, the government, and corporations will barrow. And will barrow as much as they can, where ever they can get it. And we will get further into debt. Do you not see this! lowering rate just keeps our house of cards standing a little long. But when it collapses. It going to crash to the ground with a giant THUD.
Let take a moderate recession now rather than a possible depression later.
As for shafting people that barrow irresponsibly . Look. The people who borrowed shafted themselves. They gamble and lost. It should be on their heads not mind or other responsible Americans. Do you really think most of the irresponsible borrowers are going to learn their lesson if we bail them out?Sorry I don't. They will have to learn how to SAVE, BUDGET and NOT HOLD CREDIT BALANCES UNLESS IT ABSOLUTELY NECESSARY before they can barrow again. If fact that is what alot of this country has to learn how to do. SAVE, BUDGET and NOT HOLD CREDIT BALANCES UNLESS IT ABSOLUTELY NECESSARY. This is how we as people and as a nation get out of debt.
Let's calm down now..... What is being missed is that these are 2 seperate problems, low savings rates don't necessarily affect you and me directly and has nothing to do with the government borrowing money.
What's causing the government to borrow is that they've never seen a useless project they don't like and won't spend our money on. Getting the government healthy has NOTHING to do with rates and everything to do with pork spending, useless project spending,duplicate departments and general waste. THAT is what's causing the debt to be bought by China and others.
As for the general public being overloaded with debt, true to a point and the only way that will end is by lenders making it harder to borrow at some point, not with rates but with qualifying. Why should people who are responsible have to pay higher rates? As for a recession being a good thing... I'd like to see a few economists rational for that one.
My understanding of the big bailout is that it is not going to help that many people. You have to be many months behind on your mortgage and have a minimum amount of equity to qualify. Not many of the folks around here have anything that resembles equity.
Agreed. Most of those in trouble put nothing down and took out teaser rates because they could never afford a fixed rate. Remember, rates were at rock bottom levels a couple of years ago.
Don't think lowering rates will make a big difference. The "buyers on the sidelines" thing is a bit of an urban legend, I haven't seen any evidence of this pent up demand some are talking about. Plus the real big market drivers of the past couple of years have been 0% down, no doc, teaser rates - Liar loans and the like. They have gone and aren't coming back. Most FTB's don't have 10% down plus savings in the bank and without first timers, the market isn't going anywhere.
Agreed. Most of those in trouble put nothing down and took out teaser rates because they could never afford a fixed rate. Remember, rates were at rock bottom levels a couple of years ago.
Don't think lowering rates will make a big difference. The "buyers on the sidelines" thing is a bit of an urban legend, I haven't seen any evidence of this pent up demand some are talking about. Plus the real big market drivers of the past couple of years have been 0% down, no doc, teaser rates - Liar loans and the like. They have gone and aren't coming back. Most FTB's don't have 10% down plus savings in the bank and without first timers, the market isn't going anywhere.
Thanks for throwing this in the mix. Its true, and gives me hope.
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Take it to heart.
