Home loan forgiveness

[Soggy in NOLA]

I understand what you guys are saying from personal standpoint... it's tragedy. But it isn't a new tragedy, only one exacerbated by people borrowing money they could never afford to pay back, banks being strong armed into making risky loans and banks and Wall St. playing fast and loose with the rules. Add to that a shitty economy and people remaining unemployed for years... you've got a real mess. Bailing everybody out only rewards bad acting.

That is ridiculous.

No it is true... while there was nothing within the CRA that said YOU MUST MAKE RISKY LOANS, there certainly was a provision that Under the CRA, the feds forced banks to prove they weren't redlining by approving loans to minorities and various community groups, bad risks or not. Franklin Raines, the Clinton appointed head of Fannie Mae from 1998 to 2004, made it his top priority to make mortgages easier to get for people with poor credit, few assets and little money for a down payment.

The mere accusation that a bank's mortgage portfolio was "lopsided" could be grounds to hold up any business that bank had before regulators.

 

[JamesInFlorida]

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.

It's not responsible to purchase a house that you can "afford at the time". You should factor in the very real possibility that you may lose your job, and make less money. To ignore that possibility is to be naive.

 

[Soggy in NOLA]

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.

It's not responsible to purchase a house that you can "afford at the time". You should factor in the very real possibility that you may lose your job, and make less money. To ignore that possibility is to be naive.

If I made $20k a year and a bank offered me a $350,000 mortgage, I'd laugh my ass off and walk away. Unfortunately, many people did not.

 

[Soggy in NOLA]

I knew a couple that did this... the ended up buying a house, assumed a $2,000/month mortgage and I doubt between them they made much over $2,000/month.

Guess how that ended up?

 

[The T]

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?

My Opinion is it's unsustainable. The government is effectively making the taxpayers eat the cost when they knew what they were forcing banks to do all along was unsustainable.

They are trying to cover themselves with the Taxpayers eating it again.

ALL that were involved need to answer for what they have done and be thrown in JAIL...

NEWT had the right idea...

[ame=http://www.youtube.com/watch?v=k3oHTSVRtmo&feature=related]Newt: Media Needs To Blame Politicians Like Dodd & Frank For "Heart Of Sickness" Not Wall Street - YouTube[/ame]

 

[Ringel05]

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.

While your story is compelling, I have yet to hear a compelling reason for why the taxpayer is on the hook for this man's problems. Hey, you sell the home and rent. It isn't the end of the world.

Never said it was nor did I say the taxpayer should be left holding the bag. As for selling the house....... as I stated above the houses in our neighborhood have serious negative equity. Take me for instance, I bought my house at $50K under market at $375K, if I tried to sell right now I might be able to get around $200K for it leaving me to come up with about $165 to $170K out of pocket at closing.
He might be able to do a short sale but even that's iffy as many lenders these days would rather take the foreclosure than a short sale.

 

[iamwhatiseem]

I understand what you guys are saying from personal standpoint... it's tragedy. But it isn't a new tragedy, only one exacerbated by people borrowing money they could never afford to pay back, banks being strong armed into making risky loans and banks and Wall St. playing fast and loose with the rules. Add to that a shitty economy and people remaining unemployed for years... you've got a real mess. Bailing everybody out only rewards bad acting.

That is ridiculous.

what?
Seriously...you don't think banks were strong armed into making risky loans...really?

 

[The T]

I knew a couple that did this... the ended up buying a house, assumed a $2,000/month mortgage and I doubt between them they made much over $2,000/month.

Guess how that ended up?

Forclosure and now they're squatting?

 

[Ringel05]

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.

It's not responsible to purchase a house that you can "afford at the time". You should factor in the very real possibility that you may lose your job, and make less money. To ignore that possibility is to be naive.

The house was well below what he could afford and what most people in his shoes were buying at the time. Next............

 

[The T]

I understand what you guys are saying from personal standpoint... it's tragedy. But it isn't a new tragedy, only one exacerbated by people borrowing money they could never afford to pay back, banks being strong armed into making risky loans and banks and Wall St. playing fast and loose with the rules. Add to that a shitty economy and people remaining unemployed for years... you've got a real mess. Bailing everybody out only rewards bad acting.

That is ridiculous.

No it isn't Lunger...it's true...It started in 1977 with the CRA under Jimmah Catah...

The Government-Created Subprime Mortgage Meltdown

 

[LordBrownTrout]

I was born twenty years too early. I could have had everything for free.

 

[spectrumc01]

I understand what you guys are saying from personal standpoint... it's tragedy. But it isn't a new tragedy, only one exacerbated by people borrowing money they could never afford to pay back, banks being strong armed into making risky loans and banks and Wall St. playing fast and loose with the rules. Add to that a shitty economy and people remaining unemployed for years... you've got a real mess. Bailing everybody out only rewards bad acting.

That is ridiculous.

what?
Seriously...you don't think banks were strong armed into making risky loans...really?

Nope, not strong armed at all. You do know what strong arming is don't you? literally?
Bankers were not strong armed at all.

They were given incentives to act a certain way and it was their choice to sign for those loans or not. They could have stood on principles and refused to comply and bring the situation to the publics attention, but they didn't. They were scared and had no sense of conviction, and they were making huge money. Strong arming my ass.

 

[Quantum Windbag]

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?

It is a completely stupid idea, and will result in a complete collapse of the economy.

 

[Quantum Windbag]

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.

It is not the government's job to protect people's homes, this is not Libya under Qaddafi.

 

[The T]

I was born twenty years too early. I could have had everything for free.

No kiddin'. Tail end of the "Greatest Generation/Baby-boomers"...now we are dealing with the Give it to me NOW I don't care what it costs...generation of spoiled BRATS.

 

[C_Clayton_Jones]

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?

You, like most on the right, miss the point:

‘…another stimulus plan that bypasses Congress, imagine that.’

If Congress would only do something, there’d be no need to ‘bypass.’

The issue isn’t whether the proposal is a good one or not, but that the House refuses to do anything at all.

 

[Quantum Windbag]

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.

That couple would qualify for the FHFA mortgage program Obama is claiming was his idea, so they can get help. In fact, given the fact that they have built up equity in their home, they could probably refinance their mortgage without the FHFA. The actual likelihood they will loose their home only if they insist on not taking reasonable steps to make sure they do not.

 

[Quantum Windbag]

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.

No.

 

[Quantum Windbag]

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?

If you pay taxes you should benefit from it. It's really that simple.

If we apply that logic, if you do not apply taxes you should not benefit. That makes you a right wingnut.

 

[Quantum Windbag]

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?

You, like most on the right, miss the point:

‘…another stimulus plan that bypasses Congress, imagine that.’

If Congress would only do something, there’d be no need to ‘bypass.’

The issue isn’t whether the proposal is a good one or not, but that the House refuses to do anything at all.

Why should Congress act to interfere in a private contract? Would you like it if Congress told you that everyone that owed you money did not have to pay you back?

Once Again, use the quote button, it is at the bottom of every post you see.