Bush Unveils Mortgage Relief

[gururu2]

Originally posted by: BoberFett

I don't understand why people in CA were supporting the outrageous market out there. If you don't already own when the market is insane like that, then continue renting. Buying at that price just fuels further increased prices. A bailout would make things just that much worse by propping up an overvalued market.

its pretty crazy, my parents bought their house in 1972 for 17k. Paid it off in the early 90s. Pretty much everyone that bought a house on their block before 1985 is still there. All others have bought, sold, or foreclosed between now and then. every 5 years half the block is filled with new people. houses on the block are 300-400k now. its almost to impossible to buy a house and keep it in this market.

 

[senseamp]

Originally posted by: FiddleDD
(This is not about myself though..I'm just throwing perspective on why the government might be thinking of ways to help)

some of you must not be home owners.

I know Northern CA is getting hit hard...but I'm sure its not isolated..and its not very complicated...its not about bad investment...

Originally posted by: Trianon

Originally posted by: FiddleDD
A lot of people that put their 20% down...and bought a home...and got a regular interest rate mortgage...are being adversely affected. And yes I understand that's the risk..and we are all adults...blah blah blah...When houses in CA are going down $150,000.00-$200,000.00 loss a year...some people don't understand the impact that it is having because that's more than some houses around the country are worth. It doesn't take a math phd to figure out that the 20% they may have put down...is gone.

That means that didn't evaluate the situation properly and made a bad investment by buying overpriced home in CA in 2002-2006, why should everyone else be responsible for their poor judgement?

Yes it is. I am in Northern CA, and I am waiting for housing prices to come down so they are affordable to normal people without having to do reckless things like ARMs. This will only delay that. Plus it is stealing money from mortgage investors who were promised a certain rate of return in exchange for taking a risk of borrower going bankrupt. Now they are being told they will be forced subsidize this buyer's interest rate for 5 years and won't be able to foreclose on him to recoup their investment.

 

[FiddleDD]

What are you waiting for if you want to buy a house in Northern CA, if you compare it to other houses around the states, its very affordable.

 

[senseamp]

Originally posted by: FiddleDD
What are you waiting for if you want to buy a house in Northern CA, if you compare it to other houses around the states, its very affordable.

By CA, I mean California, not Canada
Bay Area is not affordable by any stretch. It has to give up 20%-30% at least before it's in line with incomes.

 

[redgtxdi]

EXACTLY!!!!!!!!


This is hurting so many of the wrong people in so many wrong ways...........it just makes me wanna friggin'.....................AAAAAAAAAAAAAAAARRRRRRRRRRRGGGGGGGGHHHHHHHHHH!!!!!!!

:|

Just like immigration in this freakin' country............

#1.) Do it right ------ get punished

#2.) Do it wrong --------get rewarded!!

WTF is wrong with this Fsckin' country??????????? I swear it's getting to the point of almost being like the twilight zone. How the fvck can these tards possibly be seeing clearly??????

I swear I'm gonna explode!!!!!!!!!!!!! :| :| :| :|

 

[FiddleDD]

Oh I thought you were talking about the Sacramento area, that is noted to be amoung the hardest hit in the country.

What people are failing to see..is that when the CA market goes down...people will start migrating to CA...leaving a lot of homes for sale where they live and their housing market will go down..and thus the ripple hurts the major working class.

 

[redgtxdi]

OH and I forgot one more thing.............


If that fvckin' Bernanke cuts rates one more time..........I swear I'm gonna beat that guy purple w/ a Johnsonville Brat!!

:| :| :| :| :| :| :|

Adding "savers" to the list of folks gettin' their @$$es kicked by the gov't.

If you're someone who "saves" money?? We will punish you here in the U.S.!!!

If you're just fvckin' scantless & live by the split hair on a gnat's @$$, we'll bail you out every time & twice on SUnday!!!!!!

And YES........the market shot up today 'cuz of Bush's fvcked up plan & what does that mean?? Well ABSOLUTELY NOTHING 'cuz my increased dollars just keep getting closer & closer to the actual value of toilet paper to the point at which I might as well wipe my @$$ with Washingtons instead of Charmin!!!!!!!!

!$^@!#$^!$%~@%^%# !#$^!%~@#%$&^!~@% :| :| :| :|

 

[Fern]

Originally posted by: Vic

Originally posted by: GrGr
This isn't so much to do with helping the people with loans, they wouldn't care if people defaulted unless them doing so didn't hit the precious banks (and overall economy) so hard.

ding ding ding!


The problem for the banks and the investors is that they've put themselves between a rock and a hard place. The banks can't have high percentages of their loans default, but the investors bought these securities on the promise that the yields would go up. What do they do but run to Unca Sam?

I'm not really following - I don't see how freezing the interest rate (i.e., a lower yield) on mortgages is any real help to banks or investors. I also don't see why they (banks etc) couldn't do the exact same thing themselves (unilaterally). Is a homeowner gonna complain that his mortgage interest isn't going up fast enough?

I also don't see how the President has the authority to mandate this? For that matter, I don't see how Congress does either. I don't see how the government can unilaterally change a third -party contract that is otherwise legal.

I also don't see how this amounts to the fed gov bailing anybody out? Now I could if the fed reserve was pumping out a lot of cheap money to banks, that would be tax dollars. But that doesn't seem to be the case here.

All I see is a rather narrow pool of borrowers who won't have their ARMs adjusted in '08 (and geez, for all we know the adjustment might be downward anyway).

What am I missing here?

Fern

 

[Trianon]

Originally posted by: FiddleDD
Oh I thought you were talking about the Sacramento area, that is noted to be amoung the hardest hit in the country.

What people are failing to see..is that when the CA market goes down...people will start migrating to CA...leaving a lot of homes for sale where they live and their housing market will go down..and thus the ripple hurts the major working class.

Not necessarily, migration is primarily driven by job availability, then by affordable housing. There are many other things other than expensive housing that prevent everyone from moving to Kalifornia

 

[FiddleDD]

Lets say the government puts the mortgage rates at 5 percent...and to compensate the lenders, the lenders could charge (throw out a figure) $3,000.00 to redo a loan...most people who have higher than 5 percent loans would go refinance...and people would want to buy more houses...and it might start pumping life back into the system...(I am no economist..I'm making this up as I go along)

 

[palehorse]

Originally posted by: FiddleDD
what about the people that weren't planning on flipping it...

the ones that moved there to work..and job changed..and they have to move


Personally...I think its all the payment you make anyway..doesn't really matter what the rise and fall is...but the fall will continue and then someday people might need or want to move...but they can't...

A lot of people that put their 20% down...and bought a home...and got a regular interest rate mortgage...are being adversely affected. And yes I understand that's the risk..and we are all adults...blah blah blah...When houses in CA are going down $150,000.00-$200,000.00 loss a year...some people don't understand the impact that it is having because that's more than some houses around the country are worth. It doesn't take a math phd to figure out that the 20% they may have put down...is gone.

oh well, sucks to be them! (Or me, if I'm ever the unlucky one!)

Are you suggesting that it's perfectly acceptable for the government to help/bail out people in that specific situation?

If so, WHY is that acceptable or expected?

 

[palehorse]

Originally posted by: FiddleDD
I know Northern CA is getting hit hard...but I'm sure its not isolated..and its not very complicated...its not about bad investment...

Actually, that's exactly what it's about!

 

[FiddleDD]

I absolutely do think the government should help in certain circumstances.

Do you drink milk? Do you know it is subsidized so consumers can afford to have milk?
I have a view about what should be done to help the gas prices.

My view on the topic of the proposal that is out there..is completely different..I think its a bogus proposal that will not help anyone or anything in the economy.

Originally posted by: palehorse74

Originally posted by: FiddleDD
what about the people that weren't planning on flipping it...

the ones that moved there to work..and job changed..and they have to move


Personally...I think its all the payment you make anyway..doesn't really matter what the rise and fall is...but the fall will continue and then someday people might need or want to move...but they can't...

A lot of people that put their 20% down...and bought a home...and got a regular interest rate mortgage...are being adversely affected. And yes I understand that's the risk..and we are all adults...blah blah blah...When houses in CA are going down $150,000.00-$200,000.00 loss a year...some people don't understand the impact that it is having because that's more than some houses around the country are worth. It doesn't take a math phd to figure out that the 20% they may have put down...is gone.

oh well, sucks to be them! (Or me, if I'm ever the unlucky one!)

Are you suggesting that it's perfectly acceptable for the government to help/bail out people in that specific situation?

If so, WHY is that acceptable or expected?

 

[Fern]

Originally posted by: FiddleDD
Oh I thought you were talking about the Sacramento area, that is noted to be amoung the hardest hit in the country.

What people are failing to see..is that when the CA market goes down...people will start migrating to CA...leaving a lot of homes for sale where they live and their housing market will go down..and thus the ripple hurts the major working class.

To a pretty large extent, I disagree with you and others who think a falling housing market is bad for people.

As a CPA who prepares a lot of individual tax returns for people, I don't see a lot of people who trade houses like stocks. Most just buy and hold.

Sure, a lower market doesn't help those speculating, or those retirees who planned on downsizing and taking a profit for retirement fund purposes. As a financial planner, I don't think it prudent to tap excess home equity for consumer spending etc either - clearly that would stop in a lower market too.

A lower market would be a big help to first time buyers. It would also be a help to many others of us (particularly fixed income retirees) vis-a-vis lower real estate taxes. Though I suppose given the appetite of government they will make some efforts to recoup the shortfall.

When the market was much higher and my home more valuable, I had no motivation to sell. Why would I, all other houses were higher priced too. Same thing for a lower priced market, they are now cheaper, but my home is worth less too.

Fern

 

[senseamp]

Originally posted by: FiddleDD
Oh I thought you were talking about the Sacramento area, that is noted to be amoung the hardest hit in the country.

What people are failing to see..is that when the CA market goes down...people will start migrating to CA...leaving a lot of homes for sale where they live and their housing market will go down..and thus the ripple hurts the major working class.

Wait, more affordable housing hurts the middle class? Only the parts of the middle class who were dumb enough to buy a house during a bubble. Let's face it, if you paid more than $500K for a house in Sacramento, you deserve what's coming to you

 

[Vic]

Originally posted by: Fern

Originally posted by: Vic

Originally posted by: GrGr
This isn't so much to do with helping the people with loans, they wouldn't care if people defaulted unless them doing so didn't hit the precious banks (and overall economy) so hard.

ding ding ding!


The problem for the banks and the investors is that they've put themselves between a rock and a hard place. The banks can't have high percentages of their loans default, but the investors bought these securities on the promise that the yields would go up. What do they do but run to Unca Sam?

I'm not really following - I don't see how freezing the interest rate (i.e., a lower yield) on mortgages is any real help to banks or investors. I also don't see why they (banks etc) couldn't do the exact same thing themselves (unilaterally). Is a homeowner gonna complain that his mortgage interest isn't going up fast enough?

I also don't see how the President has the authority to mandate this? For that matter, I don't see how Congress does either. I don't see how the government can unilaterally change a third -party contract that is otherwise legal.

I also don't see how this amounts to the fed gov bailing anybody out? Now I could if the fed reserve was pumping out a lot of cheap money to banks, that would be tax dollars. But that doesn't seem to be the case here.

All I see is a rather narrow pool of borrowers who won't have their ARMs adjusted in '08 (and geez, for all we know the adjustment might be downward anyway).

What am I missing here?

Fern

Banks get less foreclosure, investors get subsidized on the yield spread.

 

[FiddleDD]

A Lot of baby boomers are going to be retiring..and want to move...

 

[senseamp]

Originally posted by: FiddleDD
A Lot of baby boomers are going to be retiring..and want to move...

Who cares? It's not the treasury department's job to social engineer where people move. People have been moving from state to state forever. Also, if more baby boomers want to move to CA, they are going to drive prices back up, and we don't need treasury to do it with these tactics.

 

[Fern]

Originally posted by: FiddleDD
A Lot of baby boomers are going to be retiring..and want to move...

But that is it's own phenomena, and has long been forseeable by those of us interested in demographics.

I used to do a lot of work with execs in the NYC city area (including CT, Westchester etc). Many of them had some very high price homes, but they would often say to me that they couldn't afford to buy them now. Thye had purchased them many years earlier.

I moved to the NYC area back in the early 90's. I met some old friends from Florida living there who were very unhappy. Why didn't they just move" Their homes were "under water" (meaning the value of the house of was less than the mortgage).

I realized that the many baby boomers selling out of that area were going to depress the market. While it may have been a slower decline then, it could only increase in velocity as we moved closer to larger chunks of the population retirering.

I decided then to leave NYC and move down to a retirement type area. Get out in front of the bomers so to speak. Let them come down after me and bost my R/E values instead of the other way around.

Fern

 

[Vic]

Originally posted by: FiddleDD
A Lot of baby boomers are going to be retiring..and want to move...

And baby boomers bought their first homes 20+ years ago, when prices were dirt cheap, and should still be sitting on a ton of equity.

 

[palehorse]

Originally posted by: FiddleDD
I absolutely do think the government should help in certain circumstances.

Do you drink milk? Do you know it is subsidized so consumers can afford to have milk?
I have a view about what should be done to help the gas prices.

My view on the topic of the proposal that is out there..is completely different..I think its a bogus proposal that will not help anyone or anything in the economy.

you didn't answer my question, and this conversation has nothing to do with milk or gasoline. I asked you if the people you described, in your specific scenario, should be bailed out by the government.

This is the specific scenario I'm referring to:

A lot of people that put their 20% down...and bought a home...and got a regular interest rate mortgage...are being adversely affected. And yes I understand that's the risk..and we are all adults...blah blah blah...When houses in CA are going down $150,000.00-$200,000.00 loss a year...some people don't understand the impact that it is having because that's more than some houses around the country are worth. It doesn't take a math phd to figure out that the 20% they may have put down...is gone.

Now, should the government bail/help out those people specifically described above?

 

[Jhhnn]

Vic's right..

 

[redgtxdi]

Yes, Vic is mostly right. (imho).

However, I know that when times are good people do what they want to do. ("Hey, got a new job offer, gonna move to the coast, grab a nice pad, buy up, up & awaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaay!!!")

No..............buy, sit & build equity to earn the American Dream. If you don't follow that scenario & decide you want more & more & more out of life (house, more specifically), then your equity is at risk every time you have to enter/exit the housing market again.

Live or die........make your choice!!

And to repeat...............

TO THOSE WHO THINK YOU'RE LOSING MONEY ON YOUR HOUSE..................YOU'RE NOT................YOU SIMPLY O-V-E-R-P-A-I-D WHEN YOU BOUGHT IT IN THE FIRST PLACE!!!

You should have rented & gotten by with much less until you could afford to buy. And, YES.......EVEN IF IT TAKES A DECADE!!!!!!!!

 

[FiddleDD]

I never agree renting is a better option than buying a house, the tax write-off is well worth the risk, especially if you plan on staying put for a long time and buy wisely. Usually housing was a pretty secure purchase up to lately.

As far as over-purchasing...take in consideration this scenario that a lot of people might be in.

DIVORCE...(ever heard of it???) Most people who want to stay in their home are faced with getting the house appraised at market value at the time and have to buy out the other person. Children are involved in school so you can't just take them out of school. Suddenly the market drops back down to where it was before the appraisal...Sure it sucks to be that person. I bet this is happening more than you would think.

 

[redgtxdi]

Renting is ALWAYS a better decision if the house a foolish purchase!!! :beer:

Divorce results in the unexpected. (Though we should all know there are no guarantees). BUT...........that's not a reason to shine wisdom & stay in a bad investment.

Your logic doesn't support the escape plan. If the house is appraised at a higher market value.........SELL IT!! Take the money & buy a condo or rent an apartment.

If not........then you can either afford to stay in it or not. (no "maybe" , aka "a little pregnant", etc.)

Here again.................sell it...............rent..........get back on your feet.........return to housing market.

If you decide to marry again.............do so at your own risk!! Risk, risk, risk, risk!! WE here in the U.S. don't get it!! THey substitute risk w/ entitlement or convenience, or I deserve, or they have so I should......and it's all bullsh!t.