PatriotsReign

Screw our federal gov't...WTF?

NOw our federal gov't is passing a law that will allow homeowners in danger of foreclosure to pay only 38% of their income...no matter what the cost of the home!

My question is, can I buy a home and get this same deal? Can I buy a $400K home but only pay 38% of my income to pay for it?

All I can say is, I give up!

Federal Mortgage Rescue Plan

"U.S. mortgage plan sets standards for loan modifications – goal is to reduce payments to no more than 38% of borrower’s income."

Business, financial, personal finance news - CNNMoney.com

My question is, if you get laid off, do you have to pay 38% of your unemployment check?

What a ridiculous plan!

Harry Boy

President Barack Husseein Obama will fix everything.

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Harry Boy (Genius)

In The Absence Of Law And Order Society Will Surely Destroy Itself

reflexblue

Sorry PR only if you already have one,then you could be grandfathered. You missed your big opportunity, what kind of economist are you.

And the evil empire Citi bank is freezing mortgage payment for owners that are in trouble. Wonderous times we live in.

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I Likes Spikes.

PatriotsReign

It's like a cartoon world flex...alice in I-wonder-WTF-land

MrBigglesWorth

why play by the rules? it's ridiculous. we need a revolution

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The team that lost the game and the team that only won one." Dwight White- Steelers

TheGodInAGreyHoodie

Your title is highly misleading.

This is not loan forgiveness. Nor is this cost the taxpayer money.

If someone has mortgage they can not afford to pay, instead of foreclosing Fannie is going to extend the payment schedule. So now instead of having a bill you can't afford the payments are lowered to a payment you can now afford. This might mean someone instead of paying off the house in 25 years in now takes 40 or that as there income improves there payment balloon.

But this is a great program George Bush is pushing.

It helps the middle class without costing the taxpayers money and helps the housing market by stemming the tide of foreclosures.

It is not often I say this, but Bravo Bush

PatsFanInVa

The article talked about refinancing not forgiving debt. You can forgive a high interest rate (i.e., "give away" a lower rate on the loan,) without "giving away" homes.

I notice too that the idea of a 38% of income cap on payments is mentioned although not confirmed. I did the mental math... granted, I'm in okay shape financially... but this is not designed to get me out of my own particular hole, unless that 38% is after taxes and all other work deductions, and accounts for the "exotic funding" I have (i.e., interest only on a 2nd mtg which is at a higher rate, but creates a 27K balloon in 2015.) They're trying to avoid the next year or two's foreclosures.

Interestingly, this program -- a drop in the bucket compared with the corporate bailouts -- will frost the nads of people like me. Not me, I "get" it. But people LIKE me. Whereas the Corporate bailout programs... which keep morphing from week to week now... are just one big "Oh crap those bastards!" in most peoples minds.

20 billion to change interest rates for at-risk borrowers. What's in it for me? Fewer foreclosures, and therefore a slightly higher "bottom" to this housing mess.

700 billion to investment banks (may they rest in peace,) Insurance companies, financial services firms, and now (probably) the auto industry. What's in it for me? Unemployment MAY peak in the low double digits, rather than the higher number we are looking at if liquidity disappears and if the Big 3 go under.

Guys, if we use Adam Smith as a guide on this one, we are screwed. If we don't we may be screwed anyway. But let's not take this economic weirdness, already at historic levels, and make it something even bigger.

Nobody is giving away homes (yet.) They are talking about changing loan terms (which, like its corporate cousin the "bailout," amounts to SOME giveaway but not a giveaway of a whole home, or the entire amount a bank accepts.)

Just sayin'.

PFnV

PatriotsReign

In regards to your and PFiVA's comments, people who eff'd up are getting preferencial treatment. What we NEED is for homes to SELL, so that means we NEED homes to continue to decline in value.

And I'll be honest with you both, homes will continue to decline in value until there are enough buyers buying to reduce inventory. The problem with the housing industry "right now" is that homes are too expensive...still!

Mortgages are 5 times harder to get now than 2 years ago, so that means the pool of potential buyers has been cut in half....at least.

So it won't matter what policies are put in place, as long as lenders are going back to the old traditional guidelines for mortgage lending (and they are doing exactly that) then home prices will continue to fall.

Add rising unemployment...then expect prices to fall even more. That's basic economics and frankly, common sense. Here is one of the most honest assessments of our economy I've heard in a while;

Bloomberg News

DarrylS

Saw this in the NY Times this am.. good opportunity to see the magnitude of how many folks are actually upside down..

Where Homes Are Worth Less Than the Mortgage - Interactive Graphic - NYTimes.com

http://www.nytimes.com/2008/11/11/bu...em&oref=slogin

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Real World

The government isn't involved in this program. This is a lender taking it upon themselves to offer better terms to people who can afford to pay the value of the note back. I have no problem with this, and actually mentioned refinancing, or prolonging favorable terms as a short term solution. What I don't want to see is taxpayer money subsidizing people's homes. A lender making a deal with a borrower, avoids that. Afterall, it's the lenders who had no problems agreeing, with the borrower, to sign off on a $400k, 80/20, no money down ARM in the first place. If the two of them want to mutually agree to make that a 40 year fixed, who am I to complain? Isn't it better to have someone pay less per month, over a longer term, albeit it at a lower rate, then have the home foreclosed on, unsold, with a negative revenue for X months until it's sold, at half the price?


Look at this loser.

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"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him."
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