A New Undecided!!

[Chris]

The Home Owners' Loan Corporation (HOLC) was one such successful temporary intervention; its help in the 1930s mortgage crisis holds lessons that are still relevant.


I think I made reference to this in another thread Chris, however if I am not mistaken this was struck down by the Supreme Court shortly before it was set to expire. Even this would be preferable if we have to run about handing out a trillion dollars to someone.

The Home Owners' Loan Act of 1933 created the HOLC. The agency eventually grew to about 20,000 employees but was designed as a temporary program "to relieve the mortgage strain and then liquidate," as one early description put it.

The Treasury was authorized to invest $200 million in HOLC stock. In current terms, based on the consumer price index, that's about $3 billion, but if adjusted based on the change in gross domestic product per capita since 1933, it would be about $20 billion. The act initially authorized the HOLC to issue $2 billion in bonds, or 10 times its capital, which relative to GDP per capita would be about $200 billion today. The idea was that for three years the agency would acquire defaulted residential mortgages from lenders and investors, give its bonds in exchange, and then refinance the mortgages on more favorable and more sustainable terms. Lenders would have a marketable bond earning interest, although with a lower interest rate than the original mortgage, in place of a frozen, non-earning asset.


Alex J. Pollock - A 1930s Loan Rescue Lesson - washingtonpost.com

Sounds like a great idea. Help the homeowners keep their homes and prevent foreclosures.

Let me tell you something from my experience as a realtor. Foreclosures are about 20% of the homes for sale here in Va. Most of those homes are trashed really bad. You can't sell them. It is as if someone came in and destroyed all these homes. This has the perverse effect of keeping the values up for the homeowners who are keeping their homes up, because the foreclosures are so trashed that they are not competition for well cared for homes.

 

[Modbert]

Sounds like a great idea. Help the homeowners keep their homes and prevent foreclosures.

Let me tell you something from my experience as a realtor. Foreclosures are about 20% of the homes for sale here in Va. Most of those homes are trashed really bad. You can't sell them. It is as if someone came in and destroyed all these homes. This has the perverse effect of keeping the values up for the homeowners who are keeping their homes up, because the foreclosures are so trashed that they are not competition for well cared for homes.

I wouldn't be surprised if that is true.

 

[chapstic]

Sounds like a great idea. Help the homeowners keep their homes and prevent foreclosures.

Let me tell you something from my experience as a realtor. Foreclosures are about 20% of the homes for sale here in Va. Most of those homes are trashed really bad. You can't sell them. It is as if someone came in and destroyed all these homes. This has the perverse effect of keeping the values up for the homeowners who are keeping their homes up, because the foreclosures are so trashed that they are not competition for well cared for homes.

help the homeowners keep their homes? sounds like an oxymoron to me. how are you a homeowner, when you haven't made a payment in months and the bank says no more?

prevent foreclosures? we can start with, prevent "equal opportunity home lending"

you do realize people trash "their" homes when they realize the bank is taking it over? hell if the bank was going to take my home, there wouldn't be a piece of copper left in it.

 

[Navy1960]

An interesting thing here in our area is the number of empty new homes that developers overbuilt. Here in Arizona you had a lot of New homes built and many of those homes were bought by investors looking for a quick dollar and when the market tanked, the number of new homes out there availble was unbelieveable. Here you literally have whole new developments with 100's of homes built that are perhaps 40% full. While I don't doubt for a moment that a lot of the foreclosed homes are trashed, it seems to me that the reduction in this inventory of homes cannot do anything but help.

 

[jschuck12001]

Sounds like a great idea. Help the homeowners keep their homes and prevent foreclosures.

Let me tell you something from my experience as a realtor. Foreclosures are about 20% of the homes for sale here in Va. Most of those homes are trashed really bad. You can't sell them. It is as if someone came in and destroyed all these homes. This has the perverse effect of keeping the values up for the homeowners who are keeping their homes up, because the foreclosures are so trashed that they are not competition for well cared for homes.

In Florida even if they are kept up the short sales are killing the values and basically everything going forward will be some sort of shortsale. I listened to the hearings today and I really want to know how they are going to get rid of the supply to bring the market back so this paper that we will all pay taxes on when the bailout takes place will actually be worth something, otherwise I dont want to pay higher taxes for something that will drag out for 7+ years because these homes are just sitting around empty.

 

[Chris]

In Florida even if they are kept up the short sales are killing the values and basically everything going forward will be some sort of shortsale. I listened to the hearings today and I really want to know how they are going to get rid of the supply to bring the market back so this paper that we will all pay taxes on when the bailout takes place will actually be worth something, otherwise I dont want to pay higher taxes for something that will drag out for 7+ years because these homes are just sitting around empty.

Maybe they should just start bulldozing homes?

Just kidding...

 

[Navy1960]

In Florida even if they are kept up the short sales are killing the values and basically everything going forward will be some sort of shortsale. I listened to the hearings today and I really want to know how they are going to get rid of the supply to bring the market back so this paper that we will all pay taxes on when the bailout takes place will actually be worth something, otherwise I dont want to pay higher taxes for something that will drag out for 7+ years because these homes are just sitting around empty.

good point, it seems to me jschuck that even after the "bailout" the inventory will remain the same, so what has that cleared up other than the debt on Wall Street? If it free's up credit for more homes to be sold at the same time the bannks are carrying all these homes on their books as assets isnt that sort of like banging your head against wall? So it seems to me without some sort of reduction in this massive inventory, this money is a stop gap until they find themselves in the same hole, except with even more homes empty.

 

[Kevin_Kennedy]

Bob Barr 2008 — Liberty for America

 

[jschuck12001]

Maybe they should just start bulldozing homes?

Just kidding...

Actually I heard an economist say they need to blow up a million homes to bring the supply back down.

 

[jschuck12001]

good point, it seems to me jschuck that even after the "bailout" the inventory will remain the same, so what has that cleared up other than the debt on Wall Street? If it free's up credit for more homes to be sold at the same time the bannks are carrying all these homes on their books as assets isnt that sort of like banging your head against wall? So it seems to me without some sort of reduction in this massive inventory, this money is a stop gap until they find themselves in the same hole, except with even more homes empty.

You got it, I dont feel comfortable paying tax dollars for securities that are worth shit. These guys better come up with something solid or America needs to know it will only bail them out(the banks and people who have defaulted) but not the homeowners that pay on time.

 

[Navy1960]

That money, split among about 186,000 workers at Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos., equates to an average of $201,500 per person, according to data compiled by Bloomberg. The five biggest U.S. securities firms paid $36 billion to employees last year.

Bloomberg.com: Worldwide


These are the same people who want to take taxpayer dollars because they cannot manage their business properly, and people wonder why I'm mad about this. Here we are talking about the massive amount of inventory and what to do with with our respective home values, and I wonder how many of thess empty homes I could take off the market with that kind of money?

 

[DiveCon]

Guess we'll see won't we. You'll be eating plenty of crow if it's the opposite.

Besides, I don't think McCain's largest contributor would be happy if he didn't vote for the bailout.

http://www.nytimes.com/2008/09/16/u...all&adxnnlx=1222220683-DXyJE1c9Vtzw3I93sc1vPA

Now don't confuse Willow with facts dear. She is following the party mantra. She can't get off script, she may get fired!

only one big problem with that, Merrill Lynch isnt part of the bailout since they were bought by B of A

 

[Modbert]

only one big problem with that, Merrill Lynch isnt part of the bailout since they were bought by B of A

Do you not understand the concept of Economics?

 

[DiveCon]

Do you not understand the concept of Economics?

yes, do you understand that this bill wont have an impact on Merill Lynch?
they are now part of Bank of America

 

[Navy1960]

only one big problem with that, Merrill Lynch isnt part of the bailout since they were bought by B of A

NEW YORK -- Bank of America Corp. said early Monday it would acquire Merrill Lynch & Co., Inc. in an all-stock transaction worth about $50 billion that should lift the uncertainty shrouding Merrill since the start of the credit crisis over a year ago.

Well let me see if I can put this into some sort of perspective aas far as Merrill Lynch goes, bad paper, that now B of A owns is still clogging up the market especially the credit market. So by loaning over a trillion dollars to clean it all up, inwhat basically amounts to a loan pool, it wont matter the firms name on the door. We the tax payer are going to be picking up the tab from any company that clears paper from that loan pool.

The Federal Reserve has announced new initiatives to expand emergency loan programs to cope with the worst credit crisis in decades.

A statement from Fed Chairman Ben Bernanke said the central bank is broadening the types of collateral that financial institutions can use to obtain emergency loans from the Fed.

They've agreed to set up a $70 billion loan pool that banks, brokerages and other financial companies can lean on if need be.

Bloomberg***

 

[Kevin_Kennedy]

If you're really worried that your candidate will support these bailouts, I'll point out that Bob Barr of the Libertarian Party opposes these bailouts completely.

 

[Navy1960]

If you're really worried that your candidate will support these bailouts, I'll point out that Bob Barr of the Libertarian Party opposes these bailouts completely.

I replied to your other thread Kevin about the Texas Supreme Court decision and I appreciate your link to his web site. I did read that on his website as a matter of fact.

 

[Kevin_Kennedy]

I replied to your other thread Kevin about the Texas Supreme Court decision and I appreciate your link to his web site. I did read that on his website as a matter of fact.

Just wanted to make sure you knew that there are other alternatives.

 

[editec]

Oddly enough, I don't think this disaster should not change how any of us vote one way or the other.

Except, perhaps, when we're asking ourselves what political philosophy is going to work out best for the american people as we are getting poorer as a nation, of course.

Now let's see compassionate conservativsm or compassionate liberalism...hmmm...which one would be best for Americans during the upcoming (and no doubt unannounced) depression that we're likely to go though for the next decade?

The party of Herbert Hoover or the party of FDR?

Gee! Tough choice.