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housing market bailout

By American Girl in Italy on February 19, 2009 at 10:00 AM in Barack Obama, Home Loan, Housing & Housing Crisis

Obama just rolled out a plan for the housing crisis. I have not read and digested the entire plan yet, but I do support the idea of bailing out homeowners in danger of defaulting or have defaulted on their loans. I wrote about it in an earlier post, *my stimulus package*.

The inability to pay the higher mortgage payments are what led to our current bank problems, so it makes sense to stop the bleeding, and keep people in their homes.

There is some heated controversy to the plan in this video, from CNBC, but I agree with Diana Olick. I think it was the right thing to do.

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“The plan applies $75 billion from the taxpayer-funded financial rescue package to help lenders lower borrowers’ monthly payments and reach the administration’s goal of keeping up to 9 million families in their homes.

The government also will commit $200 billion to buy up more stock in Fannie Mae and Freddie Mac to shore up the mortgage giant’s financial base, much the way the government injected money in the banking system in return for stock.

Another $50 billion would be allocated to increase the number of loans Fannie and Freddie can buy outright.”

But, from what I have seen of the plan so far, it looks like they listened to my recommendations. ;O) Well, except for the Fannie Mae/Freddie Mac part. You can read an outline of the plan here.

What have you heard of the bill so far? Where do you stand on this issue?

denise l

How many of the people being bailed out have adjustable rate mortgages. I have a 30 year fixed on a house I can afford. I’ve made my payment on time every month. Where’s my money?

You write”The inability to pay the higher mortgage payments are what led to our current bank problems, so it makes sense to stop the bleeding, and keep people in their homes.”

What percentage of people had their payment go up and what percentage of people simply bought houses they couldn’t afford? How many of these people put a downpayment on their houses?

http://americanpumainitaly.blogspot.com/ American Girl in Italy

the people with adjustable mortgages, that had their payments rise out of their ability to pay are being bailed out. Those who bought homes they flat out could not afford are not being bailed out.

AlexisM

AGI with all due respect, that’s not what I understand to be the truth. It’s my understanding it’s just the opposite – that the people who paid their mortgages on time get nothing and the people who never paid their bills get the bailout.

http://americanpumainitaly.blogspot.com/ American Girl in Italy

the people who pay their mortgages on time are not being bailed out. They will be able to refinance, like anyone else, but they won’t be bailed out of foreclosure, because they are not foreclosing.

The people who financially, absolutely can not afford their home, will NOT be bailed out.

People who had ballooning payments, that ballooned out of their ability to pay, and are in default will be adjusted, and helped.

AlexisM

Obama Announces Rezko Rescue: Bail Out Losers, Punish Achievers

February 18, 2009

RUSH: Folks, are you ready for the “Rezko Rescue”? The Rezko Rescue plan to be announced in mere moments by the Bamster,

So Obama is figuring that those of you in group two who are going to sit by and watch people in group one who could never afford the loans they got, be bailed out while you’re not, they expect you’re just going to stay there in your home and continue to pour money into a losing investment rather than walk outta your mortgage or walk outta your house. That’s what he’s banking on, that you’ll sit there and basically get sand kicked in your face from the bully on the beach. “Frederic Mishkin, a member of the Fed’s board of governors until last year, notes that if even 10 percent of the underwater homeowners walked away, foreclosures would soar, exacerbating the economy’s many problems.” So pressure is now going to be brought to bear on those of you in group two, while you’re seeing group one be bailed out, you hang in there and be tough, you go ahead and throw money into your losing investment. They’re banking on the fact you’re going to do this because you need a roof and because you need shelter and because you can afford the monthly payment. They’re banking on the fact that you’re going to continue to throw money into a losing investment and they’re counting on the fact that you’re going to hope and pray that over time the value of your house will come back.
typical.white.person

people who had balooning payments are the idiots who had no business owning a home to begin with.
cookiegramma

AGI, many people are confused about this whole mess, but one must return to the origin of the Adjustible Rate Mortgage to understand. ARM’s were an instrament allowing some borrowers to get mortgages at a lower original interest rate than fixed. These consumers were suppose to be made aware that the rates would automatically reset after a fixed term, often two years. Many of the borrowers getting ARM’s were not eligible for fixed rate terms and financers were hoping that these consumers would clean up whatever problems with credit they had in that time, then apply for fixed rate terms. This arrangement allowed for the consumer to gain some equity in the home and have a vested interest in continuing to pay for the home.
Unfortunately many of the people who applied for these ARM’s never bothered to clean up the credit issues and would wait until the deadline to refinance. They would then be locked in to even higher rate ARM’s and repeat the cycle. I am one of those homeowners who has also paid my fixed rate mortgage on time for ten years now. I have also helped a family member who had gotten into the balloon rate cycle numerous times face reality and sell the house in question. Unlike the belief that many have income does not always increase enough to afford what was out of reach in fixed mortgage terms, but the cost of living will outstrip what ever increase you receive faster than you receive it. Are people like me angry, you bet we are. This solution offered by the administration now places us in the position of not only continuing to pay our bills on time, but forcing us to pick up the tab for those who never never would or could.

http://americanpumainitaly.blogspot.com/ sarainitaly

i’m not saying no one has the right to be angry, and i am angry at freeloaderes, and i don’t think it is right to bail out people who deliberately gamed a system.

but, i do believe that there are some honest people out there, who bought a home, and are now in over their heads.

and I DO believe that if we don’t *stop the bleed* and keep people (who can afford their lower rates) in their homes then we will be worse off. I would have been MUCH more happy if we fixed this problem FIRST, and then waited to see if the banks, and businesses, and market corrected themselves, without all the OTHER trillions of dollars of bailouts.

I would be MUCH more willing to lend a neighbor a hand, then to bail out billion dollar companies, so they can buy more jets.

I don’t believe that ALL these homeowners, who are in trouble, are bad people. What happened to love thy neighbor, lend a helping hand, and all that?

Should we throw all these people out on the street? Should we allow neighborhoods to become ghosts towns? Should we allow the housing values to continue to drop, so EVERYONE loses their home values?

If someone loses a job, or finds a new job out of town, and has to sell their house, they are screwed. Millions of empty homes sitting on the market does no one any good.

YOu aren’t being forced to pick up the tab for people who *never never would pay their bills”. You are being asked to lend your neighbor a helping hand, who, for whatever reason, bought a house at a rate they could afford, but no longer can, because of the market change.

According to Obama, they aren’t bailing out people who flat our can not afford their homes.

AlexisM

Why would they be on the streets? They can rent apartments if they can afford to pay a mortgage, right? That makes no sense. And I know what’s in that bill. It’s not what you think and it WILL make us pay for people who knowingly got into mortgages they couldn’t pay for. Guess they also knew about there being a sucker born every minute who will get stuck paying for it.

Your attitude is what they criminals are banking on. It’s better to starve and suffer than to buck the system. Wrong. These people can’t afford their houses, therefore they shouldn’t stay in them. They can rent like all of the OTHER decent people who DIDN’T “buy” (weren’t GIVEN) houses they couldn’t pay for. If you follow your logic, then the people who didn’t get free houses and rent should be given a free house too!

I don’t feel sorry for them. Every single person in this country is going through bad times, no matter how relative it is. I don’t owe someone a free ride and free house and I’m not paying for it. PERIOD.

dave of Seattle

Your analysis of the mortgage crisis is simplistic and errors on the bank’s side. The responsibility lies with the real estate profession who pushed appreciations, real estate/bank appraisers who pushed to give homes unrealistic appreciation and to bankers, mortgage brokers and the like who were willing, at all costs, to put someone who didn’t qualify for a home mortgage into a home and a rich mortgage all based on voodoo, smoke and mirrors so they could collect their fees upfront and maybe a bonus at the end of the year. Sure, why wouldn’t I bite?

The Real HC

Don’t leave the people who signed these mortgage deals off the list. They are not just innocent victims. I didnt run out and buy too much house with weird payment schemes and just assume it was all going to work. If a deal sounds too good to be true, its too good to be true.

Live within your means.

Actually read what you sign.

Don’t agree to deals you cannot understand.

None of this will happen now however because what people will learn from recent events is that if they screw up they can rob the treasury for whatever they need.
http://americanpumainitaly.blogspot.com/ sarainitaly

so, you want to punish your neighbors, and kick them out on the street for being victims of fraud, and greed? One that you say you would *bite*.

they were told by their real estate agents, banks and mortgage lenders they could afford their home….and now everyone hates them and calls them freeloaders, and losers, because they are in a terrible position?

i’m not for bailing out the banks, and frauds. I am for bailing out *our neighbors*.

And, my brother is a mortgage banker, and my SIL a real estate agent. Not all real estate people are corrupt.

candymarl

Why wasn’t this a part of the original stimulus package? Or was it? I’m confused.

http://americanpumainitaly.blogspot.com/ sarainitaly

I know…. I was wondering if they cut this out of the stimulus plan, to get it under $800B, and did this on the side. This should have been part of the stimulus plan, and not some of the pork projects they have in there, in my opinion.

candymarl

Also Sara, does this mean there will be no more budget plans? Or will everything be signed piece meal? Will this latest plan be read before voting or after?

Most important is where is all of of this money coming from? If taxes will be cut and checks sent to everyone then it appears the money will have to borrowed.

What happened to the plan of “pay as you go”?

lark

I just don’t see how our justice system will get through this even Constitutionally. I just don’t see why some people will get free money and others don’t. I don’t see why people who fail and are derelict have to be rescued with free money. I don’t see why companies that benefited from being greedy now benefit thrice by swallowing big chunks of so called ‘principal reduction money.’ I just don’t see what will be the incentive for bankers to lend when no one will be deemed trustworthy. The fact is that trust has been undermined and is no longer ‘measurable.’

In God we whatever. I whatever you.

Trust = Whatever.

That is the result of our beloved postmodern philosophy. Postmodernism finally put a mortal wound on trust. Trust will have virtually zero value.
kenoshamarge

I am all in favor of helping out people whose mortgage payments ballooned out of their ability to pay. But bailing out those who do not have the resources to continue paying is not going to be helpful IMHO. Months or a year from now they will default again because they bought a home they simply cannot afford. Sad, but it’s not up to the rest of us that struggle to pay our own bills to support those who got in so far over their heads.

Every damn thing in this housing problem is not caused by the “Evil Bankers”. Some of it was caused by people who simply did not recognize that at this time they couldn’t afford to buy a home.

And I ask the same question I asked about the Porkulus Bill, where’s is all this money coming from?

http://americanpumainitaly.blogspot.com/ American Girl in Italy

“I am all in favor of helping out people whose mortgage payments ballooned out of their ability to pay. But bailing out those who do not have the resources to continue paying is not going to be helpful IMHO.”

They are’t bailing out those who do not have the resources to pay. Only those who suffered ballooning payments.

I can understand people wanting to buy a home. And I can undertstand people being excited to be told they could afford a home wth a subprime loan. And I agree people should be responsible for their own actions.

BUt bottom line, if the housing crisis is not curbed, it will affect ALL homeowners. The more people foreclose on their homes, the more it drives down your values. The more people foreclose, the fewer dollars are flowing to banks. The fewer dollars flowing to the banks, the fewer credit you can get. Millions of empty foreclosed homes is bad for current homesowners, people who need to sell their homes for other reasons (job tranfers, downsizing, etc.) and homebuilders, and construction people, and new furniture stores, and on and on.

And from what I understand, the money lent to prevent the foreclosures will be tacked on to their mortgages, on the end. So, they will be paying back the money.

MrMike

It wasn’t the bad paper that everybody was falling all over themselves to write that broke the banks. It was selling these mortgages as anything but a high risk investment.

beebop

bad mortgages = bad paper …

I am a really big believer in cause and effect. But hey, that’s just one woman’s opinion.

AlexisM

Here’s what I read…

That there are two types of people who are having housing issues. The first is the group who got houses they couldn’t afford, had no way to pay for and wouldn’t, under the criminal ACORN/Fannie and Freddie extortion of the banks to give houses away for free basically to people who had no business having them.

Then the second group, people who are “upside down” on their houses because the value has drastically dropped. What I understand is that the second group is getting nothing, while the money will all go to the people who shouldn’t be in those houses to start with.

Can someone explain why we are paying for this? I’m kind of pissed. If people got into houses that they couldn’t pay for, they shouldn’t have them and I shouldn’t pay for it. Yet again, this is nothing but welfare. Since these people will be still given free houses then, what, I am paying their mortgages for a lifetime? They just get a free house and I have to pay their 30 year mortgage. Sorry, this is wrong.

lark

After a month of Obama I cannot explain much of anything anymore. The problem for me is not so much with the transaction, which also seems illegal, regardless if a judge tampers with individual contracts to favor one party by accusing the other party of some kind of abuse of power, I think. The problem is that once judges and banks put aside contracts for whatever reasons, then reasons would be sufficient for any contract to be worthless. Simply, defaulting a contract means you have reasons for defaulting that supersede the contract. That means that at the time of contract, trust has no value. The truth is that trust is being toss out the door. Without trust the only thing that remains is a high enough interest rate to offset all those that will simply chose to ignore the contract in favor of new reasons why the contract should be made invalid. The old trust but verify is out and trust is of no value whatsoever. Only getting a substantial payment upfront to pay for the risk of actually be in business of lending. In other words, lenders might be smarter by just asking the borrower to pay in full.

Maybe this is the deal. Like in TV infomercials, if you buy one and pay in full… I get it.

What needs to be done is that a reward should be placed in each contract. A big big reward. If you fulfill the contract terms, you get a big prize or reward afterward. Capisce?

SJ

Am I to take it there are some that got into the housing mess because of their own greed and poor fiscal prudence so Obama is now tossing money at them to assist them in this crisis, so what do the guys who stuck it up, cut back did without and made sure they sacrificed to meet their payments get?

http://americanpumainitaly.blogspot.com/ sarainitaly

Supposedly there are exceptions. People who buy and sell property for profit, people who purchased home WAY over their budget are excluded. And those who are barely squeaking by, but are current in payments are excluded. I, however, think house flippers run small business, and should perhaps be included… They employee a lot of contractors and stimulate the economy to a degree.

The plan, as best I can tell, is basically to bail out those who got hurt by the rise in interest rates, which left them no longer able to afford their payments, and those who were hurt by the bursting housing bubble.

Did you watch the video? You made the same arguments Mark Haines made, but Diana had some good rebuttal.
wodiej

$13 extra on your paycheck if you get one!

beebop

And TS if you don’t. I am too middle class to get one f’king thing from Obomba. But karma is a bitch. There isn’t one single Democrap here in Ohio that is ever going to see a vote from me ever again. Not one of them. Starting with Betty Sutton, my representative.

Docelder

Same thing we always get… the bill. So long as we keep a “box of band-aids” handy and are prepared to stick one of them on the “butts” of whoever needs it… then we will not encourage responsible behavior. In fact, when you think about it… we now in a way punish responsible behavior, as all it will get you for your sacrifice and responsibility is the opportunity to pay for somebody who is irresponsible to have a higher standard of life than you have for yourself. I think we are there, and that is why so many actually choose public assistance as a “career choice”. I saw this when practicing in an urban neighborhood for five years. I see this spreading to middle America now. This is not by accident. Our financial systems, educational systems, electoral systems, justice systems… name it… they are under attack with the sole intent to “break” them and in the resultant chaos bring about socialistic change to the degree that the next generation would not recognize this nation by it’s history. Not that they would know, as the history will be scrubbed as it will be taught in schools. Just as we learned about George Washington, kids of the next generation will see Obama as the “father of our nation”. I think this is the dream… unless we all wake up really fast.

AlexisM

Agreed Doc…By the way, I won’t be coming to you with my hand out begging to pay for a house I never could afford like these moochers. I paid cash, 100%, for my house. I knew that I had a volatile business that went up and down, I saved, and I paid cash for the house I could afford. Now it’s probably worth 4-500,000 less than I paid. Where’s MY check? I was RESPONSIBLE.

beebop

I bought a house from Fannie Mae who had already gotten soaked from a “responsible lender” who bid it up more than $36K with the assistance of its bank buddies and then got all of it back from you and me. Then. When I bought it, I had to sign a statement that I wasn’t going to flip it. Like the bank hadn’t just done that exact same freaking thing with a group of legal pirates! What a laugh. I guess the fact that all the thieves had alread gotten the bad mortgages and I had to pay CASH … never made it through their big FAT heads, that I own this damn house and if I want/can sell it they can’t do one f’ing thing about it. It is mine. I have the deed to prove it. So they can kiss my ass.

By the way … do you think that Obomba remembers that there isn’t a PRESIDENT in Canada …. oh and from my point of view, we don’t have much of one here either!

Aaron

I disagree with refinancing these people or writing down their principle at the tax payers expense. The idea that we shouldn’t let prices fall because it will be a disaster is a canard. Governments around the country waste money on affordable housing because prices are to high but when prices go south they waste money supporting the market. The reason prices continue to drop is that they are still unaffordable.

The reality is that most local and state government are bloated and have too much of their financial structure supported by real estate. If real estate prices plunge revenue drops and political appointees suffer. This is why governments on all levels want to arrest the decline.

This program rewards those who made the most mistakes and took the most risk while ignoring the prudent. Please don’t tell me my home price will be adversely affected because the price from a few years ago unrealistic and should not be used as a bench mark. The only solution is lower prices and the more government intervention the longer it will take. We should save our money and use it for the clean up and rebuild in the aftermath.

AlexisM

Aaron is right. The money is of course going to the people that got houses from the Fannie and Freddie mess that they never could pay for in the first place. So, please tell me why my money is paying their mortgages? It’s not right. The people who have paid for their homes and never missed a payment, but are “upside down” on their houses are getting ZERO. Just another liberal wet dream to punish the good, successful, responsible people and reward people who don’t deserve to be in the houses they are in in the first place. This is wrong.

JustMe

True AlexisM where is my bailout? We bought a house we could afford and the price has dropped like yours 5000,000 …..
These people should never have qualified for a house in the first place.

I have a friend who sold houses and made a fortune and I mean a fortune was laid off over 18months ago and is angry she cannot find a position offering the same money and incentives.

Then I look around at other friends who struggle every month to pay their way and have nothing in return yet she lives off the money made from the houses around us that all stand empty. Makes me mad you betcha….
This friend has had time to reevaluate her life and get retrained in a position to live just like we all do in what we have coming in. And when she says she is angry her 401K and savings have dropped I just look at her and say yes so as ours….
Where in this mess due to people giving out stupid loans knowing full well these homeowners would never be able to pay once the interest rate changed yet they sold these homes, lined their pockets and never looked back until the shit hit the fan….. I say get off your ass and go do something about it like we all have to do to keep our head above water….

Please do not whine to me when your savings are dwindling and have no income.

http://www.sonicninjakitty.wordpress.com Sonic Ninja Kitty

Wow. Very well said, Aaron.

And many people are beginning to seethe about this.
wodiej

writing down the principle?? So that’s what the money is for. The banks should have to just go belly up and if people can afford any mortgage payment, they can just go rent an apartment.

There are still several big banks that didn’t stick their ass out on a limb doing this. The banks who allowed themselves to be bullied by ACORN and threats of discrimination, relaxed their lending standards, bloated home appraisals etc, should just have to go to hell. The government is once again rewarding dishonesty. Some homeowners are to blame too because they got the ARMS knowing the payment would balloon but they wanted to live beyond their means.
harper

I agree

it is pathetic to see these politicians whine about lack of affordable housing for the lower and middle class , yet do all they can to keep the prices from going down.
NomNomNom

Thank you, Aaron. Your points were well expressed. I might add that prices have not universally fallen either, though they ought to fall. Just prior to the economic situation, my county government (in North Carolina), reappraised my house: at almost $40,000 more than I paid for it 6 years earlier and hiked my property tax again. Yet I could not currently sell my house even for what I paid for it were I to try. I am having enough trouble already thanks to my greedy local government who has a fee and a tax for everything in addition to these larger tax bills. I certainly don’t need to pay for another someone’s bailout. I am not in foreclosure; I am a responsible person. I don’t appreciate one bit the thought that I might be put into foreclosure by all these stinking bailouts.
Anyone who wants to bailout these individuals, fine, that’s what charity is for: YOU DO IT WITH YOUR MONEY. Stay away from mine.
AGI, Spare me any more of this do-gooder whining. You obviously aren’t trying to live on $1800 a month or you’d keep your mouth shut. I don’t care about credit availability either: I don’t want any loans beyond my house and I don’t use a credit card. Borrowing money that one can’t pay back, first by our dear leaders and then by these greedy individuals, is precisely why we’re in this powerless place now.

wodiej

It was my understanding that there was something in the stimulus package for this, Limbaugh was talking about it yesterday. He was trying to figure out why it was going to take $70 billion to help 9 million people. I mean, they are paying lenders to lower monthly payments? There are ways they can do that FOR FREE. They could extend the length of the loan, lower the interest rate, allow interest only payments temporarily. This would certainly help people stay in their homes. But I would like to know what exactly what the $70 billion is needed for.

AlexisM

It’s our money rewarding people for not paying their bills, while the responsible people who paid their bills get no help. This is disgusting. And, yeah, ACORN will be there armed and ready for anyone who tries to foreclose on those people who never should have been in those houses in the first place. This is way wrong. Way out of line and disgusting.

candymarl

I agree. I saved money for years to get the little property I have today. Where’s my monthly check? Pay me now.

http://americanpumainitaly.blogspot.com/ sarainitaly

From what I read, they will be rewriting the loans, and tacking on the monies owed to the end of their mortgage. People can refinance, too, to lower payments.

The idea is to get the money flowing again, which gets credit flowing again. It stops your property values from declining, because of massive amounts of foreclosed homes, and also helps to stimulate the economy by keeping people in their homes, freeing up their *extra cash* for consumer spending, and removes the fear of foreclosure.

I don’t like the FM/FM aspect of the plan. But, I definitely think, in the long run, it benefits everyone to stop the bleeding on the housing crisis. But, I also agree that it is a good thing that housing prices dropped. They were out of control!

I would also hope that if we fix the problem on th homeowner end, we can quit bailing out the banks, and companies.

AlexisM

Sorry, I think they should lose their homes. Why should I pay for it? They shouldn’t HAVE those homes, so when does the “bleeding” of people who actually work and pay their bills stop? I can’t WAIT until the general public, who are so in the dark, find out about it. And I hope no one pays their taxes until this crap stops.

http://americanpumainitaly.blogspot.com/ American Girl in Italy

because you will be hurt by them foreclosing. the more homes that foreclose, the more homes are sitting empty, and the further your home value drops. the more homes that foreclose, the less cash flow we have. i posted the same thing somewhere up above, I won’t repeat myself here. haha

AlexisM

AGI, I have been trying to post information about this but the Spam Monster is eating it.

I don’t agree about spending my tax dollars to bail out people who never could afford those houses, and ACORN et al blackmailed and extorted into giving to those people. I have my own bills. I don’t care what happens to them. They shouldn’t be in those houses and you know it. Therefore, they should leave. End of story. The answer is not to have the good people of America get second jobs to reward the lazy.

http://americanpumainitaly.blogspot.com/ American Girl in Italy

they aren’t bailing out people who can not afford their homes. they are bailing out people who have subprime loans, and their payments ballooned out of their ability to pay.

but, you are obviously allowed your opinion. I just think you will be hurt in the long run, if something is not done.

http://www.youtube.com/watch?v=O8uFgvym0ZI

AlexisM

AGI, sorry, but I believe what I read and I respect your difference of opinion. They are bailing out the Freddie and Fannie losers. Why do you think ACORN is locked and loaded ready to stand there and make sure those idiots keep their houses?

Here’s a fun link…I love this guy on CNBC…I posted this on the other thread…

“Why are we bailing out the people who DRINK the water, and not the ones who CARRY the water?”

They’re bailing out the deadbeats and I’m really not into it.
AlexisM

AGI…I have tried several times to post the info that contradicts what you are saying. The Spam Monster is not letting me. Maybe it will show up. The bottom line is…the truth is the Freddie and Fannie losers will get the first money. Period. That’s what I have been told, read and what I believe. How could we doubt that when it’s the Fraud in the first place? Of course that’s what is going to happen. Why would Obama help decent people? He hates us.
http://deleted Aaron

What you don’t see is that we will be hurt regardless of what action we take. The question is that when we are at the bottom do we reward those who brought us there? This includes the bankers, borrowers, politicians and regulators. The revolution is coming and it will be televised.

AlexisM

Someone just told me that on Rush something big is going on and that he claims it’s the “first pulse of the revolution.” We have screwed around with this country long enough. Let this socialist scum attempt to ruin us. I’m glad we are at the early stages and I pray that a revolution is really coming.

Also I read that Texas is making rumblings against putting up with the fed crap and Obama. The good news for them is that they can just leave the US whenever they want.
beebop

Those whose money (and there are still plenty of people with it) needs to come back into the market place in order to start a real recovery will stay on the sidelines until there is some indication that those now in the seats of power actually get it. So far, they are not seeing it and are still sitting on the sidelines.

I’m a Linda too

I am posting this that was lost in the spam filter at the bottom. Let’s see if it posts here without my many “capital” letters that I think have something to do with it.

“But this plan will not help folks having a hard time meeting their payments.

This plan is being offered to individuals whose monthly debt (car house credit cards) are only between 31-55 percent. If your debt is much higher than 55 percent of your income, you don’t qualify.

So being most of the homeowners having problems are because they are in houses they can’t afford or are just plane irresponsible and shouldn’t have been given loans to begin with-as studies have revealed that even if you cut delinquent mortgage holders monthly payments to be hundreds of dollars lower monthly, they will be delinquent again because they spend that new found money or other things. And, a new study just came out that more than 50 percent of delinquent mortgages that received “modification” last year, are delinquent again.

And, one more thing. Did you know that the Democrats increased the loan amount for Fannie Mae and Freddie Mac, not to just the higher amount of loans up to 300K as they did in early 2007 when they got back in power, but that Fannie and Freddie take loans up to $417K? yep, Fannie and Freddie, for first time home buyers to aid in home buying offered loans up to the jumbo Loan amount.

And why are we in this mess indeed.”

beebop

Yeah … the SPAM monster is really vicious this morning.

The day the porkulus package passed, I lost a further $14K. Would that I had gone out drinking and stuffing $1 bills into the jock straps of hard working men …. hahahaha

harper

it wont stop the bleeding. it will just delay the inevitable and create the illusion that the president and the parties in power are “doing something” to help us.

The inevitable is many many people will have to rent. The excess of unsold and foreclosed houses will decrease only when the economy picks up and even then, real state values wont rise, because there is no trust left. It will be very hard to get a mortgage since banks will not lend their cash easily.

lark

wodiej, as I see it, the whole thing is to prevent despondency from spreading. But I think that the cure will cause the disease to multiply. Despondency will not be cured and only spread like a pandemic virus. At least that’s how I see it. Besides who will trust who from now on? We might as well institutionalize communism as soon as possible. That at least will straighten out the moral fiber of society.

AlexisM

This country is so disgusting and I want to leave and hope everyone with money gets the hell out so they don’t have to pay for this bullshit. The good, hardworking, decent people who toil long hours to provide for their families are going to suffer repaying the lazy. Vile.

On another note, OT, so sorry. But I am fuming. Check this one out…A man was pulled over for an anti-Obama bumper sticker in OK. Not only did he get pulled over, his sign confiscated, but the Secret Service searched his house. This is APPALLING. When are we going to stand up against this crap? Boston Tea Party time is what I think.

http://www.newsok.com/okc-officer-pulls-man-over-for-anti-obama-sign-on-vehicle/article/3347038?custom_click=headlines_widget

HARP

AlexisM…..I`m going to leave, just as soon as I get things in order. I own property in Canada and used to work there so I will have a leg up in that department. After all these years of proudly calling America home it has sadly become unrecognizable. Outside of the good folks at NQ and a few other places, Americans have lost their minds. I wish everyone well and hope I am wrong but I wish to live out my retirement with some semblance of sanity.

AlexisM

HARP…Me too. I wanted to leave on November 4, but I thought I could tolerate it. Now that Obama has pulled the final coffin nail, this BS Bacon Bill, that is such a slap in our faces, I have to go. It’s either Costa Rica or Canada. Most of my family friends went to Canada months ago and I’m sure my mother will end up taking all of her money elsewhere and moving to Toronto.

All I can say is that the rest of the people who believe in this socialist crap can pay for it. Not me. Not a prayer in hell do I work my ass off to keep people in homes they never paid for. That’s so frigging wrong on every level it makes my blood boil.

HARP

Toronto is about an hours drive from where I will be.

AlexisM

HARP…where are you going? I think we will all end up there one way or another. My poor sad country.

HARP

A nice little place of 30,000 called Stratford Ontario. It has a world class theatre and small town atmosphere. A place where you can still go to the farmers market on Saturdays and meet folks who really care about their community.

AlexisM

Good for you HARP…I hope you find a healthy, happy life there, far away from the horror that America is becoming.

I’m a Linda too

I’m envious reading your conversation. I wanted to move to Canada so bad in 2003-4, but wouldn’t probably be allowed with their point system and getting diagnosed right after 204 election put everything else on hold. And now, can’t afford to. All my money is in this house we bought 1 1/2 years ago.

My hubby has fond memories of Canada from his younger years and hiking through her.

cynic

The secret of keeping a small town nice is keeping it a secret. Once it becomes common knowledge it’s all over. Developers see “nice” as an unexploited resource. They’ll buy up what’s nice with outside money, and then market it to nice-hungry locusts. Then they take their profits, move on to another location, and do it again.

Take my advice: If you find paradise, keep it a secret.

Docelder

Well being over 40, many of the best places to emigrate… i.e. Australia, New Zealand… well I am too old. I think likely that Canada and Mexico will be U.S. territories soon enough. My dad is in Panama now, and has been trying to get me to look seriously at it for several years now. I am not sure what is best for my kids. That’s all I really want is to have a fair go, and the same for my kids, and to have the best for them. I am losing faith in that possibility here. I would like to have hope, but “The One” selling the hope has taken all hope.

beebop

My sister and her husband adopted kids from Guatemala. They should have just moved there. With the plans that Obomba has in place, we will look like Guatemala before his term is over. I visited Granada two decades ago. Maybe like that … diapers discarded used in the street.

I’m a Linda too

Oh, Jamaica has gone way down hill.

She used to be a beautiful island with proud people and then their government kept screwing more and more.

Each time I went back to Jamaica from the early 80′s til as recent as 2006, what a change. And not the kind of change they would have wanted either.

Dirty, crime ridden. And they recommended you not walk the streets unattended. In Jamaica? The last time I was there, we had a “guide” latch on to us as soon as we got off the guide bus. Good thing we kept him. He shooed off potential problems for us and stayed with us for a very short visit in to town. We were so disappointed we left very quickly.

http://farm4.static.flickr.com/3214/3293030871_a2387613b8.jpg?v=0

lark

Harp, I think you are doing the right thing. I am thinking seriously of talking to my family about it. It is a big sacrifice and it almost doesn’t make any sense but once these malaise gets hold of our society, I don’t think there will be room for improvement. I think the end result would have to be to welcome communism. Why? Because the confusion of living in a limbo of whatever whatever would simply create a continuous state of chaos impossible to suffer.

Most Cubans in the U.S. experimented and suffered having to choose to leave their beloved country than stay living under constant stress. I think that the only way to straighten chaos would be to institute communism. And that would certainly be a death sentence for quite a lot of people.

sjc-tx

We ceased living in a democracy long ago… Supppression of free speech, one party government, censored media, incessant propoganda broadcasting… Gee… sounds a bit like…. well…

I for ine find it VERY scary.
candymarl

Doesn’t surprise me. The so-called “democratic’ underground had at least two posters that wanted an Obama dictatorship.

They believed that Obama would be a “good dictator” and would know what was best for us.

Why do they not see that ‘good’ and ‘dictatorship’ are an oxymoron?

Sigh.

fed-up

But bailing out those who do not have the resources to continue paying is not going

to be helpful IMHO. Months or a year from now they will default again because they bought a home they simply cannot afford. Sad, but it’s not up to the rest of us that struggle to pay our own bills to support those who got in so far over their heads.

Every damn thing in this housing problem is not caused by the “Evil Bankers”. Some of it was caused by people who simply did not recognize that at this time they couldn’t afford to buy a home.

Exactly… Hey I would LOVE to have alot of things… my own home being one of them. But I CAN NOT afford it… And I sure as hell am not going to pay for some other clown when they knew from the get go that they couldn’t either! Gee. We act as if Barky doesn’t buy everyone’s house now, that they will all go back to living… where??! In that smaller, cheaper house they COULD afford or rent as need be… or other… like the rest of us mere mortals

Its all about greed and a fool in the WH
sjc-tx

* one
Xian

Have you people read the details? Go to this link where examples are given as to how this mortgage relief works.

http://www.treas.gov/initiatives/eesa/homeowner-affordability-plan/HousingExampleSheet.pdf

To me, I think by giving mortgage servicers upfront $1000 for each eligible loan modification they do, and $1000 for each year the borrower stays current on payment for three years, while the borrower gets $1000 dollars upfront, and $1000 for making payments on time each year for five years, this is going to encourage load fraud again, especially when the bill even gives big incentive for making loan modification well before the potential foreclosure. This is rewarding irresponsible lending and borrowers again. Isn’t this what had started all this housing crisis? And according to the eligibility requirement in this bill, I highly suspect appraisers are going to play a big role in it. They are not only going to make big money but also tempted to provide fraudulent appraisals because everyone wants to get some money from the government giveaway. Besides, I just read an L.A Times Q & A regarding the benefit of the stimulus bill, I couldn’t believe they said one of the benefits we will have is stabilizing or perhaps increasing housing prices. I thought the housing is already too expensive. Now the housing price is supposed to go even higher by artificially propping up the prices through government bailout money, is this what we are promised? Another housing bubble?
Sassy

The only thing that makes this even half way tolerable is the small amount of protection for adjoining properties, who are honest and respectable!
Many of these defaulters should never have signed contracts they could not understand or possible honor! Period!
Many of them have abandoned these homes already, making no effort to comply with their obligations.
No sympathy from me…I’ll reserve mine for my spouse who spent 40 years on his feet to support us and never complained!
He and many more like him should be getting the breaks for a change!
catsden

You people are stuck on a few phrases that you keep repeating. This mess may have been brought about by the banks giving loans to people who should not have had them.
BUT: have you forgotten that millions of people have lost jobs either because their employer moved overseas or to a cheaper state or because companies could not make enough profit to pay stockholders and CEO’s their bonuses, and because some companies have become obsolete (eg,newspapers) and are failing? Those people may have worked thirty years, lived in the same home and always paid their mortgage on time, but may have lost their 401k, their pension plan, and not be old enough to qualify for social security. They may be struggling now and many are losing their homes. Jobs are hard to find and many are being taken by people who ought not to be here.

Stop thinking of them as deadbeats. They are hard working citizens who got screwed by the economics of the past 8 years, the war, the gas companies, and the CEO’s with their enormous greed (not capitalism but GREED) and bank with their USURIOUS interest rates.

Give it a rest and look around at some honest people who are losing their homes.

* If the country didn’t want socialism it would not have elected that sock puppet/

http://americanpumainitaly.blogspot.com/ American Girl in Italy

thanks catsden.

http://americanpumainitaly.blogspot.com/ sarainitaly

I guess it’s the liberal in me slipping out, but I care about people losing their homes. I feel for the woman in this video, and would much rather bail her out, then banks and car company executives.

http://www.youtube.com/watch?v=VF_vU7WZpUE

Not everyone is out to game the system, or screw people over. Some people just got in over their heads. And yes, it is their fault, for not truly understanding their contracts, but I still feel sorry for them.

And, also, believe, as I said, if we don’t fix the problem now, it will hurt everyone in the long run.

sjc-tx

Liberal is one thing… being naive is another. WHEN do we start holding people responsible for their actions??? Sorry. I just don’t think acting like all these ‘poor pitiful’ people are that stupid!

Baling out banks, car dealers, people in over their head is only going to make it worse.
AlexisM

I don’t agree. Liberal is one thing, communism is another. It’s a slippery slope and when does it stop? I don’t care about people who defrauded the banks, etc. by making an agreement to pay something and then refusing to do so. There’s nothing about that that is good. Nothing. And if we don’t stop it now then it’s going to be what this country is all about. Not for me and I’m not sending in my check for this.
lark

Sarainitaly please.

Suppose that someone who foreclose because of a bad deal, be that in the price or in a well crafted ARM has the ability to get an excuse in their credit rating. Suppose that credit rating is not a factor perse in obtaining a new mortgage, but more the match between income and price. Then what?

She looses one property but gains the ability to buy a more suitable one. She can stop working two, three jobs. The family may afford a stay home dad with only the woman being the breadwinner. The family recovers on its own without any help from government.

The trick is that ‘credit ratings’ is in control. But if you strip ‘credit rating’ from control then you have ‘human rating’ to change quality of life for the entire society.
Peggy Sue

Sara, I agree with you. There are people who got in over their heads through predatory practices, their own inability to understand whatever contract they were signing and flatout fraud. I heard about one just this morning: a WWII vet, whose wife was ailing, whose house was paid for but got roped into one of these “reverse” mortgage deals. He’s now threatened with foreclosure and was clearly ripped off and taken advantage of.

I think the problem most people have with this is trusting the very regulatory guys to sort through the cases [like this old guy's] that should absolutely be rectified and the clear cases of people wanting something for nothing. And having a sense that the case I heard about this morning and the sympathetic vids you have seen are more the exception than the rule.

Do I want to see people out on the street? No. But I don’t believe in easy escapes for irresponsibility, fraud and highway robbery. I don’t like it that lots of funds are being funneled to ACORN. They’ve proven themselves totally unreliable. I don’t like the idea of expanding welfare, which only encourages dependency.

We want to spend out money wisely then we need to improve our schools, enlarge our job base by supporting small business and giving everyone an opportunity to succeed. Or fail as the case may be.

I’ve been a lifelong Dem, but frankly, I think the Democratic Party has lost its mind. So, I too, feel genuinely sympathtic for those crushed through no fault of their own by the fat cats, who don’t give squat about anyone. But when we try to paint over the problem with one broad brushstroke, we’re headed for trouble.

We shall see! Take care.
beebop

No one owes her home ownership. She may need a roof, but she doesn’t need me to buy it for her. Let her rent and do what the rest of us did … save for a down payment, plan, buy what you can afford. Home ownership is not a constitutionally guaranteed right. It is a privilege.
The Real HC

The only reason it makes sense to bail people out is if you personally know them and choose to do it with your own money or if you really believe they are just inherently so stupid they need to become wards of the state. If they become wards of the state I dont want them to vote. Taking my money to give to someone I dont know, against my will, is unamerican and I think immoral. It sounds nice, but its not.

And by the way, I give to charity all the time. I would say most people who know me would consider me to be very generous personally. Its not a matter of greed. Its a matter of choice and responsibility.
NomNomNom

You’re missing the point. I’ve already had to bail out the rich b#st#rds. Now you want me to bail these people out too. Forget it. I don’t have anything else you can take: I’m already right on the line and I didn’t do anything greedy or stupid or wrong, I’m just being shafted. Your plan is to take my house and give it to someone else because you feel sorry for them. I guess if you succeed and I lose my house you’ll feel sorry for me too. It’ll sure be a comfort when I’m living in the freaking street.

mountainaires

It was not the right thing to do; it is exactly the wrong thing to do. Every home owner has lost value in their home at this point; but not every homeowner got there through reckless borrowing, and irresponsible fiscal behavior. Yet Obama is planning to rescue those irresponsible and reckless twits with the money from those of us who are responsible and didn’t borrow more than we could afford.

It’s sickening. And, it is precisely the wrong thing to do. This administration–like the last administration is, in and of itself, the MORAL HAZARD. What they are proposing is unconscionable.

The solution, paradoxically, is to force the foreclosures – throughout the economy, not just in housing – to take place. Those who are upside down and cannot (or don’t want to) pay should foreclose, establishing a true market price for these homes. Those home-debtors (and others) who got in over their heads will have their credit trashed for seven years and will be renters; there is no shortage of homes for them to rent now, nor will there be. Those firms that bought this paper, thinking it could “never lose value” will have to realize their losses as well.

While this will lead to great pain in the short term, it is nonetheless the right thing to do, because it will lead to sustainable long term home ownership – which should be the goal of everyone involved.

How many people want to pay for their neighbors mortgage – the house with an extra bathroom – when they got in over their heads by misrepresenting their ability to pay, helped along by bankers who were more than happy to skim off a few percent per loan while enabling the artifice and helping it along?

This entire “crisis” is not an accident – in any way, shape or form. We will not get out of this mess until we recognize that we are here as a consequence of a massive, financial-system-wide campaign of fraud and theft that became pervasive through Washington DC and Wall Street, and when the punch bowl threatened to run dry the prime actors came back to the well in DC demanding – and got – the ability to “lever it up” even more!

http://market-ticker.denninger.net/archives/806-Foreclosure-Prevention-BS!-More-Fraud-Coverup!.html

There are men in all ages who mean to govern well, but they mean to govern. They promise to be good masters, but they mean to be masters.”
–Daniel Webster
kat in your hat

It sounds like the housing bailout is the application of the same exact measures that caused the housing problem in the first place!!

wtf is he doing.

obamastolemyboyfriend

Personally, I think he is purposely tanking the market! The plan is not to save America, it is to destroy America.

Peggy Sue

Susan, I had another response hit the spam filter. It was in answer to sara’s post above. If you can retrieve this one, too, I’d appreciate it.

Thanx

[the spam filter doesn't like me today]
denise l

I guess that chick that said that she wasn’t going to have to worry about paying her mortgage or putting gas in her car was right. Or at least half- perhaps the gas is coming.
Carla

I don’t agree with having the government using my taxpayer dollars to bail out home owners. They should lose thier homes and rent a house, just like I do. It never occured to me to try and buy a house I couldn’t afford. If I have to give someone money to stay in their house, then I should be given rent money from the government as well.
http://noquarter foxyladi14

it.s a mess folks.a real mess..
Katmoon

I sold a house during this time period(after nearly a year, and lowering and lowering and lowering the price, we made very little after owning the home for 10 years). We then purchased a house which of course has lost value, however we are not behind in our payments, we read our contract we made sure we had the money to afford the house payments, and insurance, etc. Across the street sat a house, same age as our (110), yet left to a fallen tree on part of the roof, and inhabited by two very sad alcoholics; who eventually sold the house to a young couple with 4 children for 5,000. It is getting fixed up, every moment of good weather, they work on it piece by piece; we gave them leftover paint we had, as other neighbors contributed. The mother had lost her job, the father is a contractor and business is slow, they work at keeping their house heated, but they do it. No help. Now it may not seem like much but it is one small example. Also they drive older cars, and live by modest means. My neighbors who bought the house on the other side of us, a very overpriced(by 30,000) Drive new vehicles, are quite young to be able to afford this house, put very little down and barely make it month to month as well. I am friendly and offer verbal support, but the materials and my extra help will go to the first neighbor’s, because they were not greedy. They both purchased the homes within a week of each other.
apishapa

I lost my house. I did not have an adjustable sub-prime loan. I could afford my payments. I lost my house whne the bank tacked $12000 onto my loan calling it an “escrow overage” and added $500/month to my payment. I had never been even one day late on my loan. The payment was set by the bank and deducted from my paycheck. When they did this, I quit paying becausehhtey would not provide an accounting of the money I had paid.ANd because though I could afford the payment, I could not afford my payment + 500/month.

I do not think I should have to bail out the crooked banker who did this. I do not think I should have to listen to the President suggest that the millions of us who could not hang on any longer are a bunch of deadbeats, but those who are just now getting into trouble, or those who will get into trouble in the future are good responsible people who need some help. My house lost value, too. I could not sell it for what I owed, or refinance, especially after they took away every bit of equity I had. I don’t think I should have to bail out those who are getting help, when I didn’t get any.

I’m having a shitty month and I do not feel sorry for bankers or people who still have a home. I signed a one year lease on this house and came home last week to find the landlord on the steps telling me she is moving in her and I have two weeks to get out. I know that’s illegal, but I don’t know how to fight. I used every penny I had moving. She won’t give me back my deposit or the rent I paid three days earlier until I am gone. I am expected to come up with a second month’s rent and a deposit and moving money in the middle of the month. I’m pretty tired of being pushed around though, so I sent her a letter telling her she is going to get sued for breach of contract.

beebop

I don’t have any idea how you are feeling.

But I can tell you this. Every state has a landlord tenant law and you are entitled to coverage under it. In most states it would take her nearly 90 days to get you out even if you are not paying rent — which is not your situation.

Please, please, please use your computer and google the landlord and tenant law for your state. Then check where it is enforced in your county and be at their office tomorrow. Please make sure that you are not pushed around.

I will be praying for you.

apishapa

I am using my daughter’s college tuition to pay for this move. I am uprooting my 14 year old son for the second time in three months. I have nine months left on this lease, and the only reason I am able to move is because my brother’s friend offered to rent me her house.

This crazy landlord sold the house she is living in “accidentally”, on a whim and so now that the contrac tis inconvenitent, she thinks it no longer applies.

According to Colorado Law, on a one year lease I am entitled to three months notice. I do not know what I am entitled to sue her for. But I am pretty pissed.

Marley

Generally, a lease runs with the land. As such, the new owner is obliged to honor the lease with the previous owner. (There are exceptions like if your family hid and the new did not know or should have known you existed). Also, check your lease. If you lease is silent to a new owner, then likely your lease is good regardless. Of course, I do not know the specifics of CO law so do some homework. You can only go up from here.
Marley

As to damages, you would first need to show that you were either constructively evicted or unlawfully evicted. Damages should make you whole so that you get the benefit of the original bargain.

If you leave on your own- you are not damaged (unless there is a dispute over deposit).

So, if you leased a 3 bedroom home for $1000 per month in a certain neighborhood, you should get any difference if you were unable to find a similar home for the price. So, if you had to pay $1200 now- you would get $200 for each month left on your lease.

Damages have to be foreseeable so you could not recover if you had to buy a car for one of your children to get to school.

Again, check CO law because there may be specific damages related to you on L&T law.

YOU CAN DO THIS.

Marley

1) Call law enforcement and tell them you had a signed lease and the landlord is attempting an unlawful eviction.

2) Call local law schools around your area. Some have landlord tenant clinics or other services. Search your laws on the Internet. At least in CA, the laws are explained to be user friendly. Do not give up.

You will probably not get immediate relief to get you through what you need now, but you can be heard and prevail if you have a written lease. If you do not, at least you have 30 days.

3) Even call your courts, there are many services to walk you through the forms. There is also small claims court. Make sure you keep documenting everything and keep a timeline so that you do not forget dates. GOOD LUCK!!!

Also- Do not let your landlord bully you out the door because you may have a more difficult time later proving a constructive eviction. You do not want to appear as if you consented or voluntarily left.

Marley

Of course there are many exceptions, but I find no point in trying to keep people in homes that probably should not have been there in the first place. Interest rates are not even crazy high now (like double digits in 80s) so I find it hard to believe so many were blind-sided when the rates adjusted.

Many took out interest only loans. As a result, they lived years with silly low payments and their spending probably adjusted to that. There are also those that drained all of the “equity” at the peak.

I live in one of the top five worst cities. Purchased 1980 home in 2001 for $82K. In 2007, I had an offer for a no doc refi (I even told them I was not working-school) for an appraised amount of $354K!! I had dollar signs in my eyes, but I just knew better to take money off of my house for consumer debt and purchases. All my neighors took did refis and over did their homes for the neighborhood. Bottom line, my house is worth about $115K today.

This sucks for everyone, but this handup sends the wrong message to Americans.

On the other hand, most if this may not fly in reality because I heard that banks were moving towards traditional lending with 20% down so even gov subsidized deals may not be enough incentive to reinvest in those that qualify for relief. I think the most action will happen in BK courts…renegotiating the principal- that is nuts.

Perhaps we should work harder to remove the stigma of renting.
JustMe

Change the locks and stay put she must have to give you some notice…. 30 days here in CA.

I am praying for you….