Please note: the key concept in Redgtx's wonderful rants is that he doesnt suggest "whining and begging Uncle Sam to bail you out" as any part of the solution...Originally posted by: 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.
Originally posted by: LegendKiller
Originally posted by: Exterous
Originally posted by: LegendKiller
Originally posted by: gururu2
OP if you make your payments easily, stop whining. Owning a house is beginning to detach itself from the American dream as real estate skyrockets. we have more banks behind housing than individuals. the market had to correct itself sometime, and I'm all for helping more individuals keep their housing. if you blame anyone, blame Bush for making this save apply to such a small percent of homeowners.
Yeah, because the government should bail everybody out? Right?
I guess that's what capitalism is. You f-up, you take out too much debt, then the government will help you out! Wow, what ever happened to risk/reward and survival of the fittest? I guess that we should turn into a nanny state.
People like you are the ones who haven't read one lick of John Adams or Thomas Jefferson or anything else. You believe in big-government handouts and diffusion of responsibility.
It's pathetic that in this hand-holding, "best friend" bullshit country we are now resorting to being treated with kid gloves in all life's situations.
This reminds me of an article I read in a magazine this week, the title of it is "Is your kid a douschebag?", and what it describes is exactly what you want. Entitlement.
Sad.
Normally I am the first to be against anything that helps out the stupid, lazy or ignorant. Unfortunately, this situation has the potential to be big enough to impact almost everyone in the US adversely due to the very large numbers of stupid, lazy and ignorant people who were sucked in by mortgages they didn't understand and over bought.
Obviously the market needs to correct itself but its the governments job to ease that transition and prevent economic disaster. As much as it pains me to say this I believe that some sort of relief plan is necessary otherwise the smart, well prepared and contentious will suffer as well
It is not the "government's job" to do anything but govern this country's social and governmental structure. The "government" is there to govern your country, not your economy. I think people here are way too confused about what a government does. Go read a book by any of the founding fathers, then decide what a government's job is.
A market economy *must* be free of any government manipulations to any large extent.
What we have here is the creation of a moral hazard. That means that since the government is bailing out these people, in the future, those same people will know they will get bailed out, thus, they take more risk in the future. People who weren't bailed out or sat on the sidelines are taught a lesson, take risk and have no risk of failure, reap the same rewards of a riskless venture.
It's a ridiculous situation and one that will lead us downward.
What we really need is a massive market correction. Yes, banks will fail, people will lose their jobs, people will lose their homes. However, we won't have this half-assed economy limping along through government intervention. We will have a set of new laws governing this whole thing.
When you are a kid, did you learn to not repeat your mistakes by never getting hurt? Or did you get burned by the stove and learn that hot = hurt?
This is nothing more than the current response by parents. They want to be "best friends" with their kid, allowing them to grow up in a "loving environment" where they are not told "no" or that they don't get an F for "failure" but a fluffy bullshit grade. It's the environment where your kids need knee pads so they don't skin their knees while trying to ride a bike, or that plastic toys are better than metal Tonka Trucks because you don't want your kids to get scraped. It's the kid-glove pussified country where all of our kids are pampered, fat, unfit, stupid, and sassy. It's where they think they are entitled to own a home, despite not being able to pay for it.
Now, the government is the parent and parents are the kids.
Originally posted by: Exterous
Regardless of any books the founding fathers have written, our government does take on the job of guiding the economy. (Outright control always leads to disastrous consequences). And there are constant manipulations of it by the federal reserve chairman. I am not saying that no banks should fail, no one will lose their jobs or housing, only that these drastic slides can be mitigated. And to note that massive market corrections benefit no one.
After doing some additional research I find my original desire to see people helped out was more of a knee jerk reaction based on a distorted perception of the country's economy. This most likely stems from the fact that I live in the state with the highest unemployment rate, highest foreclosure percentage and one of the weakest economies in the country (not to mention the 1st and 3rd deadliest cities)
Originally posted by: 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.
It wouldn't be in the bank's best interest to do this themselves because they would obviously take on a tremendous loss, substantially more than their already high default rates. Vic already touched on how the government's intervention will actually assist the banks.Originally posted by: Fern
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?
The government is able to do this because the banks will embrace this with open arms. The homeowners that qualify will also embrace this because the government is going to pay the increase in their mortgage payment for them. The existing mortgage contracts that are already in place will remain in place. I'm over-simplifying things here but, The banks will get their payments based on the original contract with rate increases almost as if nothing has happened and the homeowners will make their original payments with no rate/payment increases over the next 5 years. The difference in payment will be paid to the bank by the government.Originally posted by: Fern
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.
That is exactly the case here.Originally posted by: Fern
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.
What is missing is that we're not talking about adjustable rates aimed at A paper borrowers where rate have the possibility of actually going down dependant on the market. We're talking about subprime adjustable rates. The most common loans are referred to as 2/28 or 3/27 loans where the first 2 or 3 years of the loan are fixed rates and the remaining years are adjustable rates tied to the LIBOR index. Each adjustment is a guaranteed increase in rate. The first adjustment will increase the rate by 3 percent with the following adjustments occurring every 6 months, typically 1 or 1.5 percent in rate each adjustment. This equates to a pretty substantial payment increase for a lot of homeowners.Originally posted by: Fern
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?
Originally posted by: cliftonite
Will the taxpayers have to foot the bill in the difference of the interest rate? And what will this cost us?
Originally posted by: Capitalizt
Originally posted by: cliftonite
Will the taxpayers have to foot the bill in the difference of the interest rate? And what will this cost us?
Of course.
And you don't need to know. Government knows what's best for all of us.
Originally posted by: Satchel
It wouldn't be in the bank's best interest to do this themselves because they would obviously take on a tremendous loss, substantially more than their already high default rates. Vic already touched on how the government's intervention will actually assist the banks.
The government is able to do this because the banks will embrace this with open arms. The homeowners that qualify will also embrace this because the government is going to pay the increase in their mortgage payment for them. The existing mortgage contracts that are already in place will remain in place. I'm over-simplifying things here but, The banks will get their payments based on the original contract with rate increases almost as if nothing has happened and the homeowners will make their original payments with no rate/payment increases over the next 5 years. The difference in payment will be paid to the bank by the government.
That is exactly the case here.Originally posted by: Fern
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.
What is missing is that we're not talking about adjustable rates aimed at A paper borrowers where rate have the possibility of actually going down dependant on the market. We're talking about subprime adjustable rates. The most common loans are referred to as 2/28 or 3/27 loans where the first 2 or 3 years of the loan are fixed rates and the remaining years are adjustable rates tied to the LIBOR index. Each adjustment is a guaranteed increase in rate. The first adjustment will increase the rate by 3 percent with the following adjustments occurring every 6 months, typically 1 or 1.5 percent in rate each adjustment. This equates to a pretty substantial payment increase for a lot of homeowners.
Originally posted by: BoberFett
LK
Tax money may not fund it directly, but find me your average tax-paying American who doesn't have money in various retirement funds who are going to see a reduction in their earnings due to plans like this. Either way, hard working middle Americans get shafted again.
Originally posted by: Vic
Originally posted by: fleshconsumed
Originally posted by: Vic
Originally posted by: Vic
The qualifying requirements are great. Pretty much no one will be "helped" by this.
- mortgage must have been originated from 1/05-7/07
- must be an ARM whose initial adjustment occurs 1/08 or later
- borrower(s) must have 660 mid-score or lower
- must be current on mortgage
- cannot have been 60 or more days late in the past 12 months
- must be qualified as incapable of making adjusted payments
- must be qualified as capable of making unadjusted payments
It's a joke.
Oops, just found out another requirement:
- must have less than 3% equity in the property.
Oh yeah, this is great!
Excellent, the less people are bailed out the better.
I won't argue with this except to say why propagandize a bail-out plan in the first place? There is going to be a real problem here with people who will believe that they can be bailed-out but actually can't.
edit: BTW, I forgot the owner-occupied requirement, but that one I absolutely completely agree with.
Originally posted by: Starbuck1975
The commentary on Bush's plan, which is a variation on Hillary's plan, indicates that this proposal is politically motivated, but will do very little to stem the flow of foreclosures in the coming months...if anything, it is Bush's attempt at engaging the housing bubble burst issue before the Democrats can turn it into a major campaign talking point.
The market is in desperate need of a price correction, and that outcome is inevitable.
However, the scope of the housing bubble is so extensive, that it could drag our entire economy into a rather nasty recession, or dare I say depression, if the government does not act. There are simply too many players, and too much money, lost in the Ponzi scheme that fueled the housing bubble of the last 5 years.
Bush's plan will slow the bleeding a bit, enough for the market to lick its wounds and move on...those who were fiscally responsible during the housing bubble will come out better in the end.
I know of many market speculators, flippers and other greedy individuals who timed the market poorly and are now underwater...these people do not deserve a bailout...unfortunately, enough of these knuckleheads jumped on the housing bandwagon to jeopardize our entire economy.
You don't get to keep something that was never yours to begin with...yes it is true that the mortgage industry exploited many home buyers...granted, why these home buyers failed to read the fine print on the most expensive purchasing decision of their lives is beyond me, but it happens.I'm glad people are getting help in order to keep their "HOMES"
No money down, interest only loans...ARMS...home ATM machines, I mean HELOCS...this isn't about people keeping their homes...it is about greed, speculation, and fiscal irresponsibility.
You don't make a downpayment on a home, and your mortgage payments only go towards the interest...guess what...you are a renter, and the bank is the landlord...you have no equity.
The whole housing market Ponzi scheme only worked under the assumption of endless appreciation...buying an overpriced home at a ridiculously low teaser rate, and then refinancing when that teaser rate expires, only works if homes continue to appreciate...well the housing bubble hit a wall, and the rules of the game are now back to market fundamentals.
Originally posted by: Genx87
Originally posted by: Vic
Originally posted by: fleshconsumed
Originally posted by: Vic
Originally posted by: Vic
The qualifying requirements are great. Pretty much no one will be "helped" by this.
- mortgage must have been originated from 1/05-7/07
- must be an ARM whose initial adjustment occurs 1/08 or later
- borrower(s) must have 660 mid-score or lower
- must be current on mortgage
- cannot have been 60 or more days late in the past 12 months
- must be qualified as incapable of making adjusted payments
- must be qualified as capable of making unadjusted payments
It's a joke.
Oops, just found out another requirement:
- must have less than 3% equity in the property.
Oh yeah, this is great!
Excellent, the less people are bailed out the better.
I won't argue with this except to say why propagandize a bail-out plan in the first place? There is going to be a real problem here with people who will believe that they can be bailed-out but actually can't.
edit: BTW, I forgot the owner-occupied requirement, but that one I absolutely completely agree with.
Like all recent trends both political parties are trying to bribe the voters with a bigger slice of the public pie. Democrats are on board with subsidizing the banking industry under the guise of helping the homeowner with public money. Republicans get their lame duck president to toss out the buzzwords to make it look like they care.
Sad state of affairs within this country atm. Wholesale bribery of the voter with their own money and we are stupid enough to believe it.
Originally posted by: gururu2
OP if you make your payments easily, stop whining. Owning a house is beginning to detach itself from the American dream as real estate skyrockets. we have more banks behind housing than individuals. the market had to correct itself sometime, and I'm all for helping more individuals keep their housing. if you blame anyone, blame Bush for making this save apply to such a small percent of homeowners.