Home loan forgiveness

[Wiseacre]

There's an opinion in today's WSJ about a guy named Ed DeMarco. He's the acting head of the Federal Housing Finance Agency, an independent regulator of Fannie and Freddie. He's basically the cop that prevents bad policy decisions that taxpayers would have to pay for. F&F are already some 141 billion in the hole, so his job is to make sure the situation doesn't get appreciably worse.

Which brings us to the question of principle write downs, when lenders would reduce the mortgage principle amount for loans owned by F&F. IOW, a bailout, just in time for the 2012 election, another stimulus plan that bypasses Congress, imagine that.

Except Mr DeMarco won't play ball, he says the taxpayers loseout in the deal, which is true. He says principal forgiveness is not within his statuatory mandate, and Congress should be the ones to appropriate money to fund the idea if they wish.

Hard to argue with that, but of course the democrats are outraged. Bear in mind we've seen several housing relief programs in the lst few years, none of which have worked. And how fair is it to reduce somebody's mortgage but not somebody else's?

So, this all leads to the question: what do you think of the idea of lowering somebody's mortgage principle with the US taxpayers paying for it? I can see extending the mortgage period out to 40 or even 50 years, or requiring a lower loan interest. What's your opinion?

 

[grunt11b]

They got themselves into the mess, they need to get themselves out of it, Tax payers should not be on the hook for someone elses bad decisions.

 

[The Rabbi]

Transferring wealth from creditors to debtors is a bad idea that only encouragees further bad behavior.

 

[WillowTree]

ditto that.

 

[Ringel05]

There's a guy I know, in his late 50s now, both he and his wife do government contract work, always paid his bills on time, paid their taxes, bought a house that was affordable (at the time) and was able to put extra money away into savings.
6 months ago his wife's contract went bye bye and when nothing came through she went into a depression. His job was downgraded and in order to have a job he had to take a major cut in pay and the job has no medical insurance. He does what he can for extra money but has some developing serious physical ailments which limits what he can do and may not be able to continue working without proper medical care which he can't afford.
Their emergency funds are almost gone and without some kind of intervention they will possibly lose their home.

 

[RetiredGySgt]

There's a guy I know, in his late 50s now, both he and his wife do government contract work, always paid his bills on time, paid their taxes, bought a house that was affordable (at the time) and was able to put extra money away into savings.
6 months ago his wife's contract went bye bye and when nothing came through she went into a depression. His job was downgraded and in order to have a job he had to take a major cut in pay and the job has no medical insurance. He does what he can for extra money but has some developing serious physical ailments which limits what he can do and may not be able to continue working without proper medical care which he can't afford.
Their emergency funds are almost gone and without some kind of intervention they will possibly lose their home.

Your point?

 

[RetiredGySgt]

By the way? The President does not have the authority nor the power to forgive US Debt. he can not unilaterally order a Government Agency to write off money owed to the US Government.

If he does it is a violation of the Constitution , an Impeachable offense. And an unlawful order. If he does this he should be brought to Court for unlawful actions and theft of Government funds.

 

[DiamondDave]

There's an opinion in today's WSJ about a guy named Ed DeMarco. He's the acting head of the Federal Housing Finance Agency, an independent regulator of Fannie and Freddie. He's basically the cop that prevents bad policy decisions that taxpayers would have to pay for. F&F are already some 141 billion in the hole, so his job is to make sure the situation doesn't get appreciably worse.

Which brings us to the question of principle write downs, when lenders would reduce the mortgage principle amount for loans owned by F&F. IOW, a bailout, just in time for the 2012 election, another stimulus plan that bypasses Congress, imagine that.

Except Mr DeMarco won't play ball, he says the taxpayers loseout in the deal, which is true. He says principal forgiveness is not within his statuatory mandate, and Congress should be the ones to appropriate money to fund the idea if they wish.

Hard to argue with that, but of course the democrats are outraged. Bear in mind we've seen several housing relief programs in the lst few years, none of which have worked. And how fair is it to reduce somebody's mortgage but not somebody else's?

So, this all leads to the question: what do you think of the idea of lowering somebody's mortgage principle with the US taxpayers paying for it? I can see extending the mortgage period out to 40 or even 50 years, or requiring a lower loan interest. What's your opinion?

3 simple words...

FUCK THAT SHIT!!!

Those that scrape and sacrifice get the short end of the stick.... and of course, still foot the bill for those who bit off more than they could chew BY THEIR OWN FREE CHOICE...

We have the freedom to succeed that goes hand in hand with the freedom to fail

 

[Jarhead]

There's a guy I know, in his late 50s now, both he and his wife do government contract work, always paid his bills on time, paid their taxes, bought a house that was affordable (at the time) and was able to put extra money away into savings.
6 months ago his wife's contract went bye bye and when nothing came through she went into a depression. His job was downgraded and in order to have a job he had to take a major cut in pay and the job has no medical insurance. He does what he can for extra money but has some developing serious physical ailments which limits what he can do and may not be able to continue working without proper medical care which he can't afford.
Their emergency funds are almost gone and without some kind of intervention they will possibly lose their home.

OK...how about this...(not a true story)

There is a guy I know who had an idea and wanted to start a company that revolved around the idea. He invested his savings and began his venture. Things were going well for him as he expanded and hired more employees. However, whereas the demand for his product was there, the long life of his product (he spent time and money ensuring superior manufacturing and using top quality materials) the demand rapidly faded as he saturated the market. IN esence his idea was a good one but his desire to put out a quality product proved to be his downfall. He pumped much of the money he made into R and D in the hopes he can come up with another product to sell....but he ran out of funds and had to shut down...losing everything.

We all have been put in positions to make decisions...sometimes we win and sometimes we lose...but it is the desire to win that keeps us going.

But anyway......do we help the guy you know with the house? If yes, do we help the guy I know with the failed business?

Maybe the guy you know should not have bought a house knowing he and his wife were on government contracts? Maybe my guy should have made his products out of cheeper materials and screw over the consumer?

Wonder if you see my point.

 

[Mad Scientist]

So, this all leads to the question: what do you think of the idea of lowering somebody's mortgage principle with the US taxpayers paying for it? I can see extending the mortgage period out to 40 or even 50 years, or requiring a lower loan interest. What's your opinion?

Total Mortgage Debt owned by Americans: 13.6 Trillion.
FRB: Mortgage Debt Outstanding, September 2011

Total amount of Bank of America derivative debt that was moved to the FDIC protected accounts. Meaning us taxpayers have to pay off their stupidity: 75 Trillion.

Bank Of America Makes Taxpayers Insure 75 Trillion Dollars in Risky Derivative Schemes | BuzzFlash.org

Now ask yourself this question: What would be the effect on the economy of all Americans no longer having ANY mortgage debt? Our economy would rocket into outer space wouldn't it? Tax revenues would rocket right along with it too!

Now ask yourself another question: What is the effect on the economy of saddling Americans with 75 Trillion more in debt? It's a Killer.

Merely re-financing debt for longer periods (40-50 years) will just make those same people who are struggling now, debt slaves for a longer period.

 

[iamwhatiseem]

There's a guy I know, in his late 50s now, both he and his wife do government contract work, always paid his bills on time, paid their taxes, bought a house that was affordable (at the time) and was able to put extra money away into savings.
6 months ago his wife's contract went bye bye and when nothing came through she went into a depression. His job was downgraded and in order to have a job he had to take a major cut in pay and the job has no medical insurance. He does what he can for extra money but has some developing serious physical ailments which limits what he can do and may not be able to continue working without proper medical care which he can't afford.
Their emergency funds are almost gone and without some kind of intervention they will possibly lose their home.

There is an outstanding point in this story.
If Obama has his way, people like this may not get any help at all.
Buuut...These "people" would...

There's a guy I know, in his late 30s now, both he and his wife have worked in various office positions, rarely paid their bills on time, paid their taxes, bought a house that was waaay out of their league (at any time) and never put extra money away into savings. In fact every year for over a decade they spent more than they made.
6 months ago his wife's job went bye bye, she has not really looked for work as she has been on unemployment for 18 months now. His job was downgraded and in order to have a job he had to take a major cut in pay and the job has no medical insurance. He sits on his ass most of the day, does nothing for extra money and is in perfect health so no excuse for not finding something else to do. They are in default on every single loan they have - which are many.
Without some kind of intervention they will possibly lose their home.
Thank God Obama is trying to save these people.

 

[Ravi]

There's a guy I know, in his late 50s now, both he and his wife do government contract work, always paid his bills on time, paid their taxes, bought a house that was affordable (at the time) and was able to put extra money away into savings.
6 months ago his wife's contract went bye bye and when nothing came through she went into a depression. His job was downgraded and in order to have a job he had to take a major cut in pay and the job has no medical insurance. He does what he can for extra money but has some developing serious physical ailments which limits what he can do and may not be able to continue working without proper medical care which he can't afford.
Their emergency funds are almost gone and without some kind of intervention they will possibly lose their home.

Well they were stupid, weren't they? They should have become doctors or lawyers or some other thing that is a good job!!! And whose fault are those physical ailments? I bet they are his own DAMN fault. Hermain Cain didn't pay his taxes when he had cancer by golly this man should just suck it up and stfu!

/sarcasm

 

[Ringel05]

There's a guy I know, in his late 50s now, both he and his wife do government contract work, always paid his bills on time, paid their taxes, bought a house that was affordable (at the time) and was able to put extra money away into savings.
6 months ago his wife's contract went bye bye and when nothing came through she went into a depression. His job was downgraded and in order to have a job he had to take a major cut in pay and the job has no medical insurance. He does what he can for extra money but has some developing serious physical ailments which limits what he can do and may not be able to continue working without proper medical care which he can't afford.
Their emergency funds are almost gone and without some kind of intervention they will possibly lose their home.

Your point?

Obviously you're too narcissistic to get it so I'll make it plain. These people have never been "leeches", have always been responsible, hard working, tax paying citizens who are facing life challenges that are not of their making and beyond their control. Their home is now worth about $120k less then what the paid for it and when they bought it the house was sold undermarket, not to mention the fact it had over $100k of equity in it before the bust.
So my point is these people aren't your so called "deadbeats" who refuse to do anything for themselves and with a little help they can weather the storm and probably come back as viable, responsible citizens again contributing to society and the public/private coffers when all is said and done.

 

[Mad Scientist]

There's an opinion in today's WSJ about a guy named Ed DeMarco. He's the acting head of the Federal Housing Finance Agency, an independent regulator of Fannie and Freddie. He's basically the cop that prevents bad policy decisions that taxpayers would have to pay for. F&F are already some 141 billion in the hole, so his job is to make sure the situation doesn't get appreciably worse.

He's obviously doing a shitty job.

Which brings us to the question of principle write downs, when lenders would reduce the mortgage principle amount for loans owned by F&F. IOW, a bailout, just in time for the 2012 election, another stimulus plan that bypasses Congress, imagine that.

If all mortages were forgiven and the associated Banks went out of business with Obama's blessing on it all, I'd vote for Obama in 2012!

Except Mr DeMarco won't play ball, he says the taxpayers loseout in the deal, which is true. He says principal forgiveness is not within his statuatory mandate, and Congress should be the ones to appropriate money to fund the idea if they wish.

Debt forgiveness has been done for thousands of years. In fact the Bible talks about a "Debt Jubilee" where every ten years all debt is forgiven, wiped off the books/ This concept of "too big to fail" is a recent invention by those who don't wanna' eat their own losses.

Hard to argue with that, but of course the democrats are outraged. Bear in mind we've seen several housing relief programs in the lst few years, none of which have worked. And how fair is it to reduce somebody's mortgage but not somebody else's?

The housing relief programs don't work because they transfer control to some gov't agency that doesn't care. Plus, just giving assistance (a check) to people to help pay bills just makes them slaves to the gov't.

Debt forgiveness removes all debt and allows those banks that made horrible investment decisions (derivatives) to go out of business without taxpayer funded bailouts.

Think about it; If banks knew there was gonna' be a "Debt Jubilee" every ten years then there would be no incentive for them to make loans that can never be paid off because they'd lose their investment.

It sorta used to be that way when Deposit Banks and Investment Banks were kept separate. Glass/Steagall needs to be re-instituted to fix that.

 

[Ringel05]

There's a guy I know, in his late 50s now, both he and his wife do government contract work, always paid his bills on time, paid their taxes, bought a house that was affordable (at the time) and was able to put extra money away into savings.
6 months ago his wife's contract went bye bye and when nothing came through she went into a depression. His job was downgraded and in order to have a job he had to take a major cut in pay and the job has no medical insurance. He does what he can for extra money but has some developing serious physical ailments which limits what he can do and may not be able to continue working without proper medical care which he can't afford.
Their emergency funds are almost gone and without some kind of intervention they will possibly lose their home.

OK...how about this...(not a true story)

There is a guy I know who had an idea and wanted to start a company that revolved around the idea. He invested his savings and began his venture. Things were going well for him as he expanded and hired more employees. However, whereas the demand for his product was there, the long life of his product (he spent time and money ensuring superior manufacturing and using top quality materials) the demand rapidly faded as he saturated the market. IN esence his idea was a good one but his desire to put out a quality product proved to be his downfall. He pumped much of the money he made into R and D in the hopes he can come up with another product to sell....but he ran out of funds and had to shut down...losing everything.

We all have been put in positions to make decisions...sometimes we win and sometimes we lose...but it is the desire to win that keeps us going.

But anyway......do we help the guy you know with the house? If yes, do we help the guy I know with the failed business?

Maybe the guy you know should not have bought a house knowing he and his wife were on government contracts? Maybe my guy should have made his products out of cheeper materials and screw over the consumer?

Wonder if you see my point.

I see your point but many aren't seeing mine which is simple. Too many here believe that all the recipients of "government welfare" (so to speak) are do nothing, low life mooches, always have been, always will be.
None of us own a crystal ball besides which, your story is different in one very key point, the business owner made a conscience choice (about his product) and suffered as a result, the guy I know made all the right choices, based on the information he had at the time and is now suffering the consequences because of forces beyond his control.

 

[Ravi]

There's a guy I know, in his late 50s now, both he and his wife do government contract work, always paid his bills on time, paid their taxes, bought a house that was affordable (at the time) and was able to put extra money away into savings.
6 months ago his wife's contract went bye bye and when nothing came through she went into a depression. His job was downgraded and in order to have a job he had to take a major cut in pay and the job has no medical insurance. He does what he can for extra money but has some developing serious physical ailments which limits what he can do and may not be able to continue working without proper medical care which he can't afford.
Their emergency funds are almost gone and without some kind of intervention they will possibly lose their home.

Your point?

Obviously you're too narcissistic to get it so I'll make it plain. These people have never been "leeches", have always been responsible, hard working, tax paying citizens who are facing life challenges that are not of their making and beyond their control. Their home is now worth about $120k less then what the paid for it and when they bought it the house was sold undermarket, not to mention the fact it had over $100k of equity in it before the bust.
So my point is these people aren't your so called "deadbeats" who refuse to do anything for themselves and with a little help they can weather the storm and probably come back as viable, responsible citizens again contributing to society and the public/private coffers when all is said and done.

And isn't this why the hell we pay taxes in the first place? So when we are in trouble we get some return on our investment?

My goodness, I can understand the scorn people pour on the OWS crowd even while I sympathize with college kids drowning in debt that can't get decent jobs.

But to scorn upstanding tax paying citizens?

Jesus wept.

 

[Wiseacre]

So, this all leads to the question: what do you think of the idea of lowering somebody's mortgage principle with the US taxpayers paying for it? I can see extending the mortgage period out to 40 or even 50 years, or requiring a lower loan interest. What's your opinion?

Total Mortgage Debt owned by Americans: 13.6 Trillion.
FRB: Mortgage Debt Outstanding, September 2011

Total amount of Bank of America derivative debt that was moved to the FDIC protected accounts. Meaning us taxpayers have to pay off their stupidity: 75 Trillion.

Bank Of America Makes Taxpayers Insure 75 Trillion Dollars in Risky Derivative Schemes | BuzzFlash.org

Now ask yourself this question: What would be the effect on the economy of all Americans no longer having ANY mortgage debt? Our economy would rocket into outer space wouldn't it? Tax revenues would rocket right along with it too!

Now ask yourself another question: What is the effect on the economy of saddling Americans with 75 Trillion more in debt? It's a Killer.

Merely re-financing debt for longer periods (40-50 years) will just make those same people who are struggling now, debt slaves for a longer period.

ALLEGEDLY. I do not believe BofA can move their derivative debt to FDIC protected accounts, nor do I believe there's any way they can pawn off their debt onto the taxpayers unless the idiots in Washington allow them to do so. Ain't happening, they may end up in bankruptcy, but there's no way Obama would lay 75 trillion in debt on us. Nor would a repub president either, not a chance.

 

[Jarhead]

Your point?

Obviously you're too narcissistic to get it so I'll make it plain. These people have never been "leeches", have always been responsible, hard working, tax paying citizens who are facing life challenges that are not of their making and beyond their control. Their home is now worth about $120k less then what the paid for it and when they bought it the house was sold undermarket, not to mention the fact it had over $100k of equity in it before the bust.
So my point is these people aren't your so called "deadbeats" who refuse to do anything for themselves and with a little help they can weather the storm and probably come back as viable, responsible citizens again contributing to society and the public/private coffers when all is said and done.

And isn't this why the hell we pay taxes in the first place? So when we are in trouble we get some return on our investment?

My goodness, I can understand the scorn people pour on the OWS crowd even while I sympathize with college kids drowning in debt that can't get decent jobs.

But to scorn upstanding tax paying citizens?

Jesus wept.

so should the tax payer support the guy who lost his business due to the recession?
And the guy who bought a boat and then lost his job and has no savings to get by?

 

[DiamondDave]

There's a guy I know, in his late 50s now, both he and his wife do government contract work, always paid his bills on time, paid their taxes, bought a house that was affordable (at the time) and was able to put extra money away into savings.
6 months ago his wife's contract went bye bye and when nothing came through she went into a depression. His job was downgraded and in order to have a job he had to take a major cut in pay and the job has no medical insurance. He does what he can for extra money but has some developing serious physical ailments which limits what he can do and may not be able to continue working without proper medical care which he can't afford.
Their emergency funds are almost gone and without some kind of intervention they will possibly lose their home.

Your point?

Obviously you're too narcissistic to get it so I'll make it plain. These people have never been "leeches", have always been responsible, hard working, tax paying citizens who are facing life challenges that are not of their making and beyond their control. Their home is now worth about $120k less then what the paid for it and when they bought it the house was sold undermarket, not to mention the fact it had over $100k of equity in it before the bust.
So my point is these people aren't your so called "deadbeats" who refuse to do anything for themselves and with a little help they can weather the storm and probably come back as viable, responsible citizens again contributing to society and the public/private coffers when all is said and done.

And they, like everyone else bought their homes of their own free will

You have the freedom to fail that goes hand in hand with the freedom to succeed

 

[The Rabbi]

There's a guy I know, in his late 50s now, both he and his wife do government contract work, always paid his bills on time, paid their taxes, bought a house that was affordable (at the time) and was able to put extra money away into savings.
6 months ago his wife's contract went bye bye and when nothing came through she went into a depression. His job was downgraded and in order to have a job he had to take a major cut in pay and the job has no medical insurance. He does what he can for extra money but has some developing serious physical ailments which limits what he can do and may not be able to continue working without proper medical care which he can't afford.
Their emergency funds are almost gone and without some kind of intervention they will possibly lose their home.

Your point?

Obviously you're too narcissistic to get it so I'll make it plain. These people have never been "leeches", have always been responsible, hard working, tax paying citizens who are facing life challenges that are not of their making and beyond their control. Their home is now worth about $120k less then what the paid for it and when they bought it the house was sold undermarket, not to mention the fact it had over $100k of equity in it before the bust.
So my point is these people aren't your so called "deadbeats" who refuse to do anything for themselves and with a little help they can weather the storm and probably come back as viable, responsible citizens again contributing to society and the public/private coffers when all is said and done.

They aren't leeches until they take the money.
They can send some "jingle mail", deed in lieu of foreclosure and find an apartment to rent until things get better. As to their house, sorry but not our fault either. If they need to, they can file bankruptcy. That's what it's there for.