Blame game or possible solutions?

[Wry Catcher]

I'd like this thread to be open to all who have ideas on solving the housing crisis. What will or might work, what will not?

The Problems:
Too many homes underwater;
Too few banks willing to work with homeowners in distress;
Too many homes in foreclosure;
Too many homes abandoned;
Too many neighborhoods in free fall.

More?

What can/should/might be done?

Is a strategic foreclosure unethical, or simply a business decision?
Should banks reduce interest rates to current levels to allow homeowners to remain in their home?
Is it healthy for the investor class to buy distressed homes, rent them cheaply, forgo repairs/maintainance, and receive a business tax deduction?

 

[uscitizen]

We just need to suffer a while for our stupidity and things will level back out.

This cannot be fixed easially or quickly.
any attempt to do so will only make things worse.

Yes stupidity often has a high price.

 

[LiberalNut]

I would agree that there is no real solution to the housing crisis other than letting prices fall to pre-bubble levels. Only a few fundamentals should actually cause real estate prices to rise and these fundamentals simply were not present in the bubble. It was a Ponzi scheme and that scheme needs to be unravelled. Trying to prop up real estate prices at bubble levels is not only the wrong thing to do, it has no hope of working.

That said, the housing crisis was a mere symptom of the underlying problems in the economy. the disease is a mal distribution of wealth. You see, when wealth is distributed too much to the high end, the masses cannot afford to consume the output capacity of industry. When industry is faced with insufficient demand, industry cuts production. When industry cuts production, unemployment rises. When unemployment rises, consumption drops further, and so on and so forth. In the short term what the government needs to do is become the "consumer of last resort" and prop-up aggregate demand for the products of industry. In the long term what needs to happen is redistribution of wealth.

Make no mistake, since Reagan, the so-called conservatives have been redistributionists. They have redistributed wealth from the middle and the bottom to the top. This is the core problem with the economy.

All the housing boom did was deceive middle class folks into thinking that they were richer than they actually were. Though median incomes were essentially stagnant, people were "property rich" or at least so they thought. So, the ubiquitous home equity loan allowed the middle class to sustain consumption long after it should have dropped off. In other words, the housing boom is synonymous with the growth in GDP during the Bush administration. Without that ponzi scheme, the economy would have slipped into recession much sooner.

The solution is simple. Return the distribution of wealth to levels of the pre-Reagan era. Until the masses can afford to buy the products of industry without resorting to unsustainable credit booms, we will continue to have the economic troubles that we are dealing with now.

 

[Two Thumbs]

The Problems:
Too many homes underwater;
Too few banks willing to work with homeowners in distress;
Too many homes in foreclosure;
Too many homes abandoned;
Too many neighborhoods in free fall.

People bit off more than they can chew. Should they suffer or should we all suffer?
Detroit is actually making people move (I heard this, can't recall where), some are refusing, of course. No one wants to be forced from a home they actually own, but the utility companies are saying they can't afford to send power down major lines for so few homes.

More?

What can/should/might be done?

Is a strategic foreclosure unethical, or simply a business decision? It's unethical not to pay your loan. It's the same as theft.
Should banks reduce interest rates to current levels to allow homeowners to remain in their home? Should? No. Can they? Yes, I think they can. Better to get some money than no money.
Is it healthy for the investor class to buy distressed homes, rent them cheaply, forgo repairs/maintainance, and receive a business tax deduction? If a landlord forgoes repairs, he ends up in court explaining himself to a judge. I know, b/c I watched 2 of my landlord sweat under a judges gaze.

 

[iamwhatiseem]

I would agree that there is no real solution to the housing crisis other than letting prices fall to pre-bubble levels. Only a few fundamentals should actually cause real estate prices to rise and these fundamentals simply were not present in the bubble. It was a Ponzi scheme and that scheme needs to be unravelled. Trying to prop up real estate prices at bubble levels is not only the wrong thing to do, it has no hope of working.

That said, the housing crisis was a mere symptom of the underlying problems in the economy. the disease is a mal distribution of wealth. You see, when wealth is distributed too much to the high end, the masses cannot afford to consume the output capacity of industry. When industry is faced with insufficient demand, industry cuts production. When industry cuts production, unemployment rises. When unemployment rises, consumption drops further, and so on and so forth. In the short term what the government needs to do is become the "consumer of last resort" and prop-up aggregate demand for the products of industry. In the long term what needs to happen is redistribution of wealth.

Make no mistake, since Reagan, the so-called conservatives have been redistributionists. They have redistributed wealth from the middle and the bottom to the top. This is the core problem with the economy.

All the housing boom did was deceive middle class folks into thinking that they were richer than they actually were. Though median incomes were essentially stagnant, people were "property rich" or at least so they thought. So, the ubiquitous home equity loan allowed the middle class to sustain consumption long after it should have dropped off. In other words, the housing boom is synonymous with the growth in GDP during the Bush administration. Without that ponzi scheme, the economy would have slipped into recession much sooner.

The solution is simple. Return the distribution of wealth to levels of the pre-Reagan era. Until the masses can afford to buy the products of industry without resorting to unsustainable credit booms, we will continue to have the economic troubles that we are dealing with now.

WOW.
Your opinion is just like your avatar: ONE EYE IS SHUT.

 

[California Girl]

I would agree that there is no real solution to the housing crisis other than letting prices fall to pre-bubble levels. Only a few fundamentals should actually cause real estate prices to rise and these fundamentals simply were not present in the bubble. It was a Ponzi scheme and that scheme needs to be unravelled. Trying to prop up real estate prices at bubble levels is not only the wrong thing to do, it has no hope of working.

That said, the housing crisis was a mere symptom of the underlying problems in the economy. the disease is a mal distribution of wealth. You see, when wealth is distributed too much to the high end, the masses cannot afford to consume the output capacity of industry. When industry is faced with insufficient demand, industry cuts production. When industry cuts production, unemployment rises. When unemployment rises, consumption drops further, and so on and so forth. In the short term what the government needs to do is become the "consumer of last resort" and prop-up aggregate demand for the products of industry. In the long term what needs to happen is redistribution of wealth.

Make no mistake, since Reagan, the so-called conservatives have been redistributionists. They have redistributed wealth from the middle and the bottom to the top. This is the core problem with the economy.

All the housing boom did was deceive middle class folks into thinking that they were richer than they actually were. Though median incomes were essentially stagnant, people were "property rich" or at least so they thought. So, the ubiquitous home equity loan allowed the middle class to sustain consumption long after it should have dropped off. In other words, the housing boom is synonymous with the growth in GDP during the Bush administration. Without that ponzi scheme, the economy would have slipped into recession much sooner.

The solution is simple. Return the distribution of wealth to levels of the pre-Reagan era. Until the masses can afford to buy the products of industry without resorting to unsustainable credit booms, we will continue to have the economic troubles that we are dealing with now.

Redistribute your own wealth.... and leave mine to me. Fucking whiny assed liberals always wanting to take other people's shit.

 

[LiberalNut]

WOW.
Your opinion is just like your avatar: ONE EYE IS SHUT.

Wow! Your retort is essentially non-existent. You have ignored everything that was said and offered up a non sequitur.

Do you have any substantive problem with anything said or is a mindless soundbite all you are capable of?

 

[LiberalNut]

Redistribute your own wealth.... and leave mine to me.

Ummm, that's exactly what I'm advocating. I'm advocating that rich folks like me have their wealth redistributed to middle class folks like yourself. Unless you have a net worth over 3.5 million, which i doubt you do, you would benefit from what I'm advocating.

Fucking whiny assed liberals always

OOOoooo, what intellectual rigor you bring to bear! Not.

 

[Revere]

Do you give the foreclosed homes you buy back to the people who were evicted?

 

[California Girl]

I'd like this thread to be open to all who have ideas on solving the housing crisis. What will or might work, what will not?

The Problems:
Too many homes underwater;
Too few banks willing to work with homeowners in distress;
Too many homes in foreclosure;
Too many homes abandoned;
Too many neighborhoods in free fall.

More?

What can/should/might be done?

Is a strategic foreclosure unethical, or simply a business decision?
Should banks reduce interest rates to current levels to allow homeowners to remain in their home?
Is it healthy for the investor class to buy distressed homes, rent them cheaply, forgo repairs/maintainance, and receive a business tax deduction?

Now, this is gonna shock the right and the left.....

Because we are in such a uniquely disasterous scenario at the moment, I believe that the most ethical - and the most long term advantageous - route for the banks is to allow people maximum flexibility in order to keep their homes. Empty homes do not hold any value to the banks and, given time, most currently unemployed homeowners, will get back on their feet and catch up their loans. This is not just best for the homeowners, it is best for the banks, and for the country.

Bonus for the banking industry.... it would help restore the public's opinion and faith in their institutions.

 

[Revere]

Uh, wealth, or rather homeowership, was "redistributed" to people who did not have it, or those who could not afford homes.

They still can't afford them.

Unless you are giving yours away.

 

[LiberalNut]

Do you give the foreclosed homes you buy back to the people who were evicted?

I have never bought a foreclosed home. I've done short sales but no foreclosures.

Uh, wealty, or rather homeowership

These are not the same thing. Indeed, for many new homeowners, the house negatively affects their net worth because they owe so much on it. For people who bought on or near the peak of the bubble, the house will be a drag on their net worth for decades cause they owe more than the house is worth.

was redistributed

It was not. Redistribute is to take from one group and give to another. Tell me, who got their houses taken away before the bubble burst?

You don't know anything Revere. You have been fed a few mindless talking points and you think that's a substitute for real knowledge but it isn't.

 

[Revere]

Same difference. You bought homes from people who were forced out of them.

Everyone who could not make their payments got their homes taken away.

Which caused the bubble to burst.

 

[Revere]

Hey, n00b, discuss the topic, not the poster.

 

[LiberalNut]

Same difference. You bought homes from people who were forced out of them.

No, not surprisingly, you're simply dead wrong on the facts. By definition, a short sale is done when the current occupant is still in the house. Indeed, everyone wins in a short sale. The homeowner gets out from underwater. The bank makes more than it would going to foreclosure and the buyer pays less than current market value.

Hey, n00b, discuss the topic, not the poster.

This in a post that contains nothing on the topic. Add hypocrisy to ignorance. Typical right winger.

 

[Revere]

The current occupant is unable to make the payments. A short sale is a precursor to foreclosure. The effect is the same. A seller is forcibly removed from their home. His credit is trashed. The bank takes a loss. Everyone doesn't "win."

You're pimping misery.

 

[loosecannon]

Redistribute your own wealth.... and leave mine to me. Fucking whiny assed liberals always wanting to take other people's shit.

whether or not he was even advocating a redistribution of your wealth, his post was spot on.

Demand drives the economy, demand relies on a middle class with either lots of money or lots of money to borrow.

We are killing our middle class and in turn killing our own economy.

 

[iamwhatiseem]

Wow! Your retort is essentially non-existent. You have ignored everything that was said and offered up a non sequitur.

Do you have any substantive problem with anything said or is a mindless soundbite all you are capable of?

My retort is spot on.
You type an argument as if you are a political writer for the Democrat party.
The entire post was about as one sided as I have ever seen.

As I stated - for this post, your avatar's one eye shut is a perfect representation - especially considering it is the left eye that is shut.

If you are wanting serious debate, you have to offer something to be taken seriously first.

 

[loosecannon]

I'd like this thread to be open to all who have ideas on solving the housing crisis. What will or might work, what will not?

The Problems:
Too many homes underwater;
Too few banks willing to work with homeowners in distress;
Too many homes in foreclosure;
Too many homes abandoned;
Too many neighborhoods in free fall.

More?

What can/should/might be done?

Is a strategic foreclosure unethical, or simply a business decision?
Should banks reduce interest rates to current levels to allow homeowners to remain in their home?
Is it healthy for the investor class to buy distressed homes, rent them cheaply, forgo repairs/maintainance, and receive a business tax deduction?

Now, this is gonna shock the right and the left.....

Because we are in such a uniquely disasterous scenario at the moment, I believe that the most ethical - and the most long term advantageous - route for the banks is to allow people maximum flexibility in order to keep their homes. Empty homes do not hold any value to the banks and, given time, most currently unemployed homeowners, will get back on their feet and catch up their loans. This is not just best for the homeowners, it is best for the banks, and for the country.

Bonus for the banking industry.... it would help restore the public's opinion and faith in their institutions.

The Fed could buy distressed mortgages and offer then refinancing at discount window rates, same as they do the banks.

Instead the fed is buying distressed MBS. Which is stupid because it only saves the banks leaving the economy dangling.

The balance of your post I agree with. Helping homeowners to keep their homes and pay for them serves everybody.

 

[loosecannon]

Same difference. You bought homes from people who were forced out of them.

Everyone who could not make their payments got their homes taken away.

Which caused the bubble to burst.

no it didn't. defaults began after TARP and were triggered by payment resets in adjustable rate mortgages. It was like a mortgage bomb was set and set to explode at a pre determined moment, just before Obama's presidency. Or just at the end of Bush's second term.