Obama Thinking About Doing Something Really Bizarre and Stupid

[Toro]

The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.

Obama May Prohibit Home-Loan Foreclosures Without HAMP Review - Bloomberg.com

Boy, its hard to underestimate how idiotic this policy would be. If the goal of the administration is to cause banks to lend even less, this is a great way to do it.

They've got to get some people with real business experience in there.

 

[Zander]

This proves that Obama is a dilettante who really doesn't know a thing about free market economics.

 

[Oddball]

The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.

Obama May Prohibit Home-Loan Foreclosures Without HAMP Review - Bloomberg.com

Boy, its hard to underestimate how idiotic this policy would be. If the goal of the administration is to cause banks to lend even less, this is a great way to do it.

They've got to get some people with real business experience in there.

Who in their right mind would take the job, when the administration and their toadies have spent the last year running businesspeople and the free market into the ground?

 

[Samson]

The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.

Obama May Prohibit Home-Loan Foreclosures Without HAMP Review - Bloomberg.com

Boy, its hard to underestimate how idiotic this policy would be. If the goal of the administration is to cause banks to lend even less, this is a great way to do it.

They've got to get some people with real business experience in there.

Who in their right mind would take the job, when the administration and their toadies have spent the last year running businesspeople and the free market into the ground?

Good point.....its a little harder to find Insane Retired CEO's in Chicago than it is to find Public Activists.

 

[txlonghorn]

Wait...how can this be? I thought liberals were all so smart and all....hmmmmm. Dumb must not register in IQ tests....

 

[Big Black Dog]

This is another example of that fine Democratic leadership!

 

[Avatar4321]

So basically Obama is doing the same thing he does everyday.

 

[txlonghorn]

So basically Obama is doing the same thing he does everyday.

So it's business as usual in Washington...what happened to that change he promised.

 

[Conspiracist]

The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.

Obama May Prohibit Home-Loan Foreclosures Without HAMP Review - Bloomberg.com

Boy, its hard to underestimate how idiotic this policy would be. If the goal of the administration is to cause banks to lend even less, this is a great way to do it.

They've got to get some people with real business experience in there.

The more gubmint involvement, the more satisfied this guy seems. Aren't people ablr to seek out HAMP on their own?

 

[Oddball]

Where are the libs?

C'mon, Guys.......Y'all can't be this blatantly stupid.

Or.....................?

 

[DiveCon]

Where are the libs?

C'mon, Guys.......Y'all can't be this blatantly stupid.

Or.....................?

this should be good

 

[blastoff]

Wait. I think I've got it. It's more change we can believe in?

 

[Care4all]

The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.

Obama May Prohibit Home-Loan Foreclosures Without HAMP Review - Bloomberg.com

Boy, its hard to underestimate how idiotic this policy would be. If the goal of the administration is to cause banks to lend even less, this is a great way to do it.

They've got to get some people with real business experience in there.

why would it cause banks to lend less?

 

[code1211]

The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.

Obama May Prohibit Home-Loan Foreclosures Without HAMP Review - Bloomberg.com

Boy, its hard to underestimate how idiotic this policy would be. If the goal of the administration is to cause banks to lend even less, this is a great way to do it.

They've got to get some people with real business experience in there.

why would it cause banks to lend less?

Please recall the sub prime lending of the recent past. Anybody who could stand up and sign their name copuld get a mortgage. If foreclosures are no longer allowed, only those who are very strongly qualified would be given a loan.

This would mean that if in the past holding a job for 2 years prior was a condition, it would become 3 years. 20% down would become 30%. Every qualifier would be jacked up and the group that used to just barely qualify would be denied.

When a loan is made, people like to get the value of that loan back.

 

[Vanquish]

This proves that Obama is a dilettante who really doesn't know a thing about free market economics.

I love it when people use the term "free market" which is an utter fiction. There's no such thing. Ever since the dawn of time, when people have been ruled by either religious leaders or political structure, controls have been put on the economy. The Egyptians had economic controls, the Greeks, etc etc.

People who parrot "free market! free market!" shouldnt really be passing judgment on other's knowledge of the economy.

 

[goldcatt]

The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.

Obama May Prohibit Home-Loan Foreclosures Without HAMP Review - Bloomberg.com

Boy, its hard to underestimate how idiotic this policy would be. If the goal of the administration is to cause banks to lend even less, this is a great way to do it.

They've got to get some people with real business experience in there.

why would it cause banks to lend less?

There are a few reasons. First, if HAMP screening and rejection is mandatory before foreclosure it will cause a significant delay in recovering their collateral for those who are in default on their mortgages and do not qualify for modification. That costs the lenders money in a few ways. They lose the benefits of their contract during the default period, for one thing. No payments = no income. Second, with real estate values expected to dip again they can expect the collateral to be worth even less the longer they have to wait to take possession. Third, with the forecast rise in upcoming foreclusores they can reasonably expect to hold the collateral property longer before they sell it, and carrying costs aren't cheap.

Looking at these losses, banks will need to hold on to cash reserves to cover their worst case scenario. Which means not lending it out - in mortgages or any other type of loan, either. It's lose-lose.

I agree in theory that something needs to be done to help homeowners who got bad loans. But when it's obvious they cannot stay in their homes why hold it up? I'd prefer to see some kind of program to encourage and assist short selling before it goes through the (expensive) foreclosure process, but I have no idea how that kind of thing could work.

 

[jillian]

The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.

Obama May Prohibit Home-Loan Foreclosures Without HAMP Review - Bloomberg.com

Boy, its hard to underestimate how idiotic this policy would be. If the goal of the administration is to cause banks to lend even less, this is a great way to do it.

They've got to get some people with real business experience in there.

notwithstanding that your legitimate issue becomes fodder for the rightwingnuts, I understand your concern. But on the other hand, how does one balance the need to address the foreclosure problem appropriately, with the need to get banks lending money again? and shouldn't that have happened, instead of them giving themselves bonuses with our money?

 

[Care4all]

Obama May Prohibit Home-Loan Foreclosures Without HAMP Review - Bloomberg.com

Boy, its hard to underestimate how idiotic this policy would be. If the goal of the administration is to cause banks to lend even less, this is a great way to do it.

They've got to get some people with real business experience in there.

why would it cause banks to lend less?

Please recall the sub prime lending of the recent past. Anybody who could stand up and sign their name copuld get a mortgage. If foreclosures are no longer allowed, only those who are very strongly qualified would be given a loan.

This would mean that if in the past holding a job for 2 years prior was a condition, it would become 3 years. 20% down would become 30%. Every qualifier would be jacked up and the group that used to just barely qualify would be denied.

When a loan is made, people like to get the value of that loan back.

But the article said that foreclosures ARE STILL ALLOWED, only they are not allowed to go through while the customer is being reviewed by the government program that authorizes/pays for a realignment or refinancing of their loan...so if the customer is being reviewed by the gvt for a new mortgage, then the bank has to just wait on their foreclosing until the gvt is done with their qualification process....and the customer has been denied? At least that is what I got out of the article?

 

[Care4all]

Oh, and how are the banks getting their money back with a foreclosure? They lost all of their money with a foreclosure and they now own some near worthless property....?

THE BANKS are the ones that benefit from these gvt programs that refinance imho....it buys them time for the market values to recover....it prevents or POSTPONES foreclosure, while they continue to collect some more money off the customer... i dunno?

 

[goldcatt]

Oh, and how are the banks getting their money back with a foreclosure? They lost all of their money with a foreclosure and they now own some near worthless property....?

THE BANKS are the ones that benefit from these gvt programs that refinance imho....it buys them time for the market values to recover....it prevents or POSTPONES foreclosure, while they continue to collect some more money off the customer... i dunno?

That's the problem, if the owner is in default they're not collecting anything from the customer. When it goes on long enough, the loan is written off as a loss. The bank has to have enough cash reserves set aside (not in the pool available to lend) to offset that loss. They then foreclose on the home so they can sell it and recoup at least part of their loss. That's how it works.

But there is a huge backlog of homes headed to foreclosure this year, which will not allow values to recover but will in fact drop them further. Which means from the banks' point of view they will be spending just as much money to repossess the same property which they will have to hold on to longer and sell for a smaller amount than if they were able to foreclose now. Perhaps the idea is to space out how these foreclosures hit the market to try to avoid a huge glut all at once and keep values as stable as possible, but they're not giving the banks any confidence by doing it this way. To them, it's just putting off the inevitable.