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Breaking News: Gov't giving away homes!

Discussion in 'Political Discussion' started by PatriotsReign, Nov 11, 2008.

  1. PatriotsReign

    PatriotsReign Rookie

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    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? :D

    What a ridiculous plan!
    Last edited: Nov 11, 2008
  2. Harry Boy

    Harry Boy Look Up, It's Amazing PatsFans.com Supporter

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    President Barack Husseein Obama will fix everything.
  3. reflexblue

    reflexblue PatsFans.com Supporter PatsFans.com Supporter

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

    And the evil empire Citi bank is freezing mortgage payment for owners that are in trouble. Wonderous times we live in.
    Last edited: Nov 11, 2008
  4. PatriotsReign

    PatriotsReign Rookie

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

    MrBigglesWorth Rookie

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

    TheGodInAGreyHoodie Rookie

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    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
  7. PatsFanInVa

    PatsFanInVa PatsFans.com Supporter PatsFans.com Supporter

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    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
  8. PatriotsReign

    PatriotsReign Rookie

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    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
    Last edited: Nov 11, 2008
  9. DarrylS

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  10. Real World

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    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.
  11. Holy Diver

    Holy Diver Rookie

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    This is America, and we reward failure.
  12. PatsFanInVa

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    Can we stick to the subject and not get all sidetracked on the fact that Bush was reelected in 04?
  13. Run DMC

    Run DMC Rookie

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    mission-accomplished.jpg
    Bush is the biggest commie prez, we've ever had. Eh, Komrade?
  14. Run DMC

    Run DMC Rookie

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    It's a great time to be a loser and a lowlife in Amerikkka.
  15. PatsFanInVa

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    You're close, but there is something in here that costs 20 billion bucks. My thought is that is going to be the net amount of debt (which would never be paid on the crazy terms first specified), which is turned into more sane debt, on different terms. So yes, there is a giveaway involved. It goes to the banks, who get solvent loans instead of foreclosed on ones, and to homeowners, who get somewhat better credit terms than they would just shopping around sans government intervention.

    But do I really begrudge 20 billion thrown at homeowners' actual problems, when 700 billion is being thrown at corporate America's liquidity crisis? not a chance.

    As to the notion that home values must fall to approximately 2001 levels, then the transfer of wealth to debt will be complete and locked in. This will be a good thing for affodable housing advocates. It will be a good thing for a return to a normal economy. And it will be a bad thing for a certain sector such as Yours Truly. The outcome of bankruptcy, to my understanding, is bad credit for 7 years, and some required payments to creditors (not to mention a sense of shame.) I don't think it's for me.

    But I do think it's for a lot of people. Screw it; just walk away. What if that guy files tomorrow, and I stay in my upside-down home? Well, most likely, in 7 years that guy does better (speaking of perverse incentives.)

    Eh well. Live and learn, die and forget it all. I guess all those people who bought between 2002 and 2006 who are upside down on their mortgages should think about foreclosure, yeah?

    PFnV
  16. Holy Diver

    Holy Diver Rookie

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    ......ha!....
  17. Real World

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    While penalizing success.
  18. Real World

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    Are you sure there's federal funding involved here? It says there's no direct financial help from the US in the title of the article, and I didn't see federal funding mentioned anywhere in the text. I might have missed it though.


    U.S. unveils mortgage plan
    Effort focuses on Fannie, Freddie - sets standards for private sector. No direct financial help from U.S.
  19. PatriotsReign

    PatriotsReign Rookie

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    How much money did fanny and freddie get from the fed? whether it was directly or indirectly funded, the ONLY reason these banks are offering to do this is due to the pressure they are getting from the fed who has HUGE leverage over them.

    Didn't the fed purchase a majority share in Fanny & Freddie?
  20. Real World

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    I was speaking to the program itself, and whether or not it was being paid for with direct funds from the fed.
  21. PatriotsReign

    PatriotsReign Rookie

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    I read & comprehended that fully RW!;)

    I'm just saying, they are both already funded to the hilt by our tax dollars so whether or not additional funding was appropriated isn't so relevant.

    I believe both have already received funding in 2 ways

    1. Direct loans
    2. Federal gov't purchased stock in both companies

    Why not throw another 5-10 billion into it?:rolleyes:
  22. PatsFanInVa

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    See the redirecting of TARP, next post over.

    This is starting to look a lot like 3-card monte, with the taxpaying public in the role of rube.

    And by the way, what are we over here arguing? We're arguing about good old fashioned demonization of those who made bad bets.

    I had my own little pity party post, no doubt. But check out what's happening. We're directing this ginormous $700bn (plus sweetened sour pork at $115 bn) bailout everywhere except at toxic mortgages. Now we're going to use it just for direct capital injection to banks, for AIG, and the latest, to support the failing credit card industry. Bad assets? They're off the table... with the exception of this $20 bn sop for borrowers in extremis.

    And where are we? Bickering about the $20 bn rewarding bad behavior... while $700 bn rewards Wall Street's bad behavior, but we stopped watching that card, right?

    The beauty of 3 card monte, if you know what you're doing, is that the rube loses then gets mad and wants to prove he's not the idiot you took him for. That way, when the guy running the game says "wanna play again?" You get pissed off and you want to show him up in front of his adoring public... and ya put another 20 bucks on the table.

    PFnV
    Last edited: Nov 13, 2008
  23. Real World

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    Who's bickering? I simply asked where it said that the fed was paying $20 billion for this policy of restructuring the terms of these mortgages.
  24. Michael

    Michael Moderator Staff Member PatsFans.com Supporter

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    #12 Jersey

    Like a fool I paid off my mortgage in 2003. If I only I knew socialism was around the corner. :ugh:
  25. PatriotsReign

    PatriotsReign Rookie

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    No kiddin'!! I wanna buy a house and get a break on my mortgage too. Can I do that?
  26. PatsFanInVa

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    Here's the big bonanza you'd get, from the outlines they've given:

    - they'd refinance you so you're paying 38% of GROSS income on your payment.

    - If you make 100 K, they're refinancing you so you pay 38K/year on your payments. That's $3,166 per month.

    - Then you've got your income taxes, then utilities, etc.

    - AND the refinance takes the form mainly of postponing your payments so your 30 year mortgage goes longer (40, 50, etc.)

    Here's what's really good about it for a homeowner:

    - yes, you would get a break on interest, according to sketchy outlines, so yes it is true you are getting lower interest as a "reward" for actually being riskier

    Would I want it, personally? Hell no. My payments are way under 38% of my gross income. Would I want it if my payments were, say, 50% of gross income? Of course.

    Tell me that a guy who wants to pay off the mortgage early actually believes what he REALLY wants to do is pay 38% of gross income for longer on the home. You're paying zero interest when you're paid off. That's why you did it.

    Wait don't tell me... you'd refi and pay a percent less than the going rate, and reinvest that percentage in ummmmm, a high-yielding equity portfolio? I don't see that happening.

    PFnV
  27. PatriotsReign

    PatriotsReign Rookie

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    It would be a great deal if I could buy a $600,000 house, made $100K and only had to pay 38% of my income! See, you gotta tell the WHOLE story PFiVA!;)
  28. PatriotsReign

    PatriotsReign Rookie

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    I can support reduced payments on lower interest rates over a longer period of time.

    I can NOT support the reduction of the PRINCIPAL (home price) in any manner shape or form.

    That is my #1 concern that buyers must pay for what they bought...just like the rest of us do.
  29. Harry Boy

    Harry Boy Look Up, It's Amazing PatsFans.com Supporter

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    Your showing your right wing again, good for you, millions of fools voted for The Messiah because they think The Messiah is going to pay off their Mortgage and give them "free gas"---:singing:
  30. PatriotsReign

    PatriotsReign Rookie

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    If that is what they expect, they are indeed fools.

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