Obama Thinking About Doing Something Really Bizarre and Stupid

[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?

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.

So the banks would prefer for their customers NOT to qualify for the refinancing, and to foreclose immediately?


The market takes the entire hit now and not extend it over the next several years?

Anyway, it DID NOT SAY that the administration WAS doing this, it said it was an option on the table to be considered....at least that's what I thought the article said?

I think we have a huge problem and all of our home values are going down down down, for another few years....for certain...especially if there continues to be a rise in foreclosures....

This housing crisis or these bad loans, were to the middle class....well 90% of them were...10% were to the lower income/CRA type customers...so, I was thinking on the lines of...there are many out there, that could benefit from the refinancing terms and be in a better position to pay for their homes....?

BUT, if home prices continue to drop, who would really want to....being under water on their homes...meaning...being that their homes are worth less than their mortgage....?

What a mess....and it hurts ALL OF US that own their own home, or pay their mortgage on time....at least those like Matt and me, who bought our home outright, in 2006...right at the PEAK of market prices for real estate.

 

[Old Rocks]

Since the banks have taken our money to bail them out of their foolishness, perhaps it would be expecting to much for the banks to be a bit lenient with people who acted foolishly buying a home with payments that were less than rent, and then finding themselves unemployed a couple of years later.

And whose actions created the debacle that resulted in these people's unemployment?

Was the derivitives game something these homeowners participated in?

What I see here is the same ol' same ol'.

The very wealthy create a situation, and the Conservatives blames the American Citizen and Worker for the situation. And buy the resultant foreclosures for pennies on the dollar, wait a couple of years and start the game all over again.

And most of these posters supporting this system are puckering up and kissing the asses that shitting on them.

 

[manifold]

I'm ok with this.

The overreactionary response is still pretty funny though.

 

[mudwhistle]

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

He's a Marxist. He can't help it.

 

[RodISHI]

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?

Makes one wonder doesn't it. How about all those profits some of these banks reported after needing tarp?

 

[Ame®icano]

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.

More socialist decisions from Central Committee.

 

[manifold]

So we already have a government program designed to help people under serious economic strain stay in their homes. Whether one approves of the program is a separate issue. All that matters here is there is one.

So now we have the government considering a provision to essentially force lenders to inform their borrowers in default of this program before they can foreclose.

Wow, how tyrannical!

 

[Ame®icano]

Where are the libs?

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

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

Wait the minute, we just don't get it...

 

[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.

So the banks would prefer for their customers NOT to qualify for the refinancing, and to foreclose immediately?


The market takes the entire hit now and not extend it over the next several years?

Anyway, it DID NOT SAY that the administration WAS doing this, it said it was an option on the table to be considered....at least that's what I thought the article said?

I think we have a huge problem and all of our home values are going down down down, for another few years....for certain...especially if there continues to be a rise in foreclosures....

This housing crisis or these bad loans, were to the middle class....well 90% of them were...10% were to the lower income/CRA type customers...so, I was thinking on the lines of...there are many out there, that could benefit from the refinancing terms and be in a better position to pay for their homes....?

BUT, if home prices continue to drop, who would really want to....being under water on their homes...meaning...being that their homes are worth less than their mortgage....?

What a mess....and it hurts ALL OF US that own their own home, or pay their mortgage on time....at least those like Matt and me, who bought our home outright, in 2006...right at the PEAK of market prices for real estate.

If foreclosure is inevitable, and no amount of refinancing short of practically forgiving the loan will help, then of course the banks want to foreclose and make back whatever they can sooner rather than later. At least it's certain and they will have a much better idea what their losses will look like and how much they can afford to lend as opposed to holding in reserve. And for a lot of people this would apply to, it is in fact inevitable.

I don't think there are any good answers, honestly.

 

[manifold]

Since the banks have taken our money to bail them out of their foolishness, perhaps it would be expecting to much for the banks to be a bit lenient with people who acted foolishly buying a home with payments that were less than rent, and then finding themselves unemployed a couple of years later.

And whose actions created the debacle that resulted in these people's unemployment?

Was the derivitives game something these homeowners participated in?

What I see here is the same ol' same ol'.

The very wealthy create a situation, and the Conservatives blames the American Citizen and Worker for the situation. And buy the resultant foreclosures for pennies on the dollar, wait a couple of years and start the game all over again.

And most of these posters supporting this system are puckering up and kissing the asses that shitting on them.

While I can understand your sentiment, there need not be any expectation of leniency on the part of the banks. They can be as big a douchers as the free market will allow, just like always. This would do little more than require them to inform their borrowers of this program before they can finalize foreclosure. Big f*cking deal!

 

[Ame®icano]

Day by day we look more like Venezuela.

 

[The T]

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?

And completely on purpose.

 

[goldcatt]

Since the banks have taken our money to bail them out of their foolishness, perhaps it would be expecting to much for the banks to be a bit lenient with people who acted foolishly buying a home with payments that were less than rent, and then finding themselves unemployed a couple of years later.

And whose actions created the debacle that resulted in these people's unemployment?

Was the derivitives game something these homeowners participated in?

What I see here is the same ol' same ol'.

The very wealthy create a situation, and the Conservatives blames the American Citizen and Worker for the situation. And buy the resultant foreclosures for pennies on the dollar, wait a couple of years and start the game all over again.

And most of these posters supporting this system are puckering up and kissing the asses that shitting on them.

While I can understand your sentiment, there need not be any expectation of leniency on the part of the banks. They can be as big a douchers as the free market will allow, just like always. This would do little more than require them to inform their borrowers of this program before they can finalize foreclosure. Big f*cking deal!

Actually it does do more than that. It requires the borrowers to go through the screening process and be rejected first. How long is that going to take? I would assume uncooperative homeowners will eventually receive an automatic rejection, but after how long? It increases uncertainty, which means the lenders have to hold larger cash reserves and can loan less. Less going out in loans even to qualified buyers means foreclosures stay on the market longer, lowering their value and raising carrying costs, which means more losses and higher reserves for the lenders. It's a sort of circle.

That doesn't include what happens to employment when commercial lending drops, or to manufacturing and retail when things like car loans and retail credit (think your 12 months same as cash deals on that new furniture or refrigerator, for example) fall, or any of the other ripples that spread through the system.

I am no fan of the banks, believe me. And I have the same questions as everyone else about what happened to the TARP money. But from a practical standpoint it's better to flush out the system of those who can't be helped sooner rather than later. Let everybody take the one-time hit and know they're going to get over it.

 

[Conspiracist]

They blame business people for the position we are in which you can do so if you choose to. But you also have to recognize that someone opened the door for this country to take a good slam in the ass end by allowing businesses to leave for greater profits and practically slave labor. Ethics left the building.

 

[manifold]

Since the banks have taken our money to bail them out of their foolishness, perhaps it would be expecting to much for the banks to be a bit lenient with people who acted foolishly buying a home with payments that were less than rent, and then finding themselves unemployed a couple of years later.

And whose actions created the debacle that resulted in these people's unemployment?

Was the derivitives game something these homeowners participated in?

What I see here is the same ol' same ol'.

The very wealthy create a situation, and the Conservatives blames the American Citizen and Worker for the situation. And buy the resultant foreclosures for pennies on the dollar, wait a couple of years and start the game all over again.

And most of these posters supporting this system are puckering up and kissing the asses that shitting on them.

While I can understand your sentiment, there need not be any expectation of leniency on the part of the banks. They can be as big a douchers as the free market will allow, just like always. This would do little more than require them to inform their borrowers of this program before they can finalize foreclosure. Big f*cking deal!

Actually it does do more than that. It requires the borrowers to go through the screening process and be rejected first. How long is that going to take? I would assume uncooperative homeowners will eventually receive an automatic rejection, but after how long? It increases uncertainty, which means the lenders have to hold larger cash reserves and can loan less. Less going out in loans even to qualified buyers means foreclosures stay on the market longer, lowering their value and raising carrying costs, which means more losses and higher reserves for the lenders. It's a sort of circle.

That doesn't include what happens to employment when commercial lending drops, or to manufacturing and retail when things like car loans and retail credit (think your 12 months same as cash deals on that new furniture or refrigerator, for example) fall, or any of the other ripples that spread through the system.

I am no fan of the banks, believe me. And I have the same questions as everyone else about what happened to the TARP money. But from a practical standpoint it's better to flush out the system of those who can't be helped sooner rather than later. Let everybody take the one-time hit and know they're going to get over it.

Well articulated nonsense.

First, the overall impact of this regulation wouldn't be near the level people who've posted here seem to think. Fact: All regulation does SOMETHING to increase the cost of doing business. The question is never if it does or doesn't, it's how much and is it still worth it. The how much is minor in this case, which makes me willing to take a risk on the is it worth it part. Foreclosure is already a long process. Banks that are proactive would easily be able to meet this requirement without meaningfully extending the already lengthy process.

Second, the idea that we'd be better off if we just hurried up and foreclosed on everyone on the cusp is too laughable to validate with a serious response.

 

[goldcatt]

While I can understand your sentiment, there need not be any expectation of leniency on the part of the banks. They can be as big a douchers as the free market will allow, just like always. This would do little more than require them to inform their borrowers of this program before they can finalize foreclosure. Big f*cking deal!

Actually it does do more than that. It requires the borrowers to go through the screening process and be rejected first. How long is that going to take? I would assume uncooperative homeowners will eventually receive an automatic rejection, but after how long? It increases uncertainty, which means the lenders have to hold larger cash reserves and can loan less. Less going out in loans even to qualified buyers means foreclosures stay on the market longer, lowering their value and raising carrying costs, which means more losses and higher reserves for the lenders. It's a sort of circle.

That doesn't include what happens to employment when commercial lending drops, or to manufacturing and retail when things like car loans and retail credit (think your 12 months same as cash deals on that new furniture or refrigerator, for example) fall, or any of the other ripples that spread through the system.

I am no fan of the banks, believe me. And I have the same questions as everyone else about what happened to the TARP money. But from a practical standpoint it's better to flush out the system of those who can't be helped sooner rather than later. Let everybody take the one-time hit and know they're going to get over it.

Well articulated nonsense.

First, the overall impact of this regulation wouldn't be near the level people who've posted here seem to think. Fact: All regulation does SOMETHING to increase the cost of doing business. The question is never if it does or doesn't, it's how much and is it still worth it. The how much is minor in this case, which makes me willing to take a risk on the is it worth it part. Foreclosure is already a long process. Banks that are proactive would easily be able to meet this requirement without meaningfully extending the already lengthy process.

Second, the idea that we'd be better off if we just hurried up and foreclosed on everyone on the cusp is too laughable to validate with a serious response.

I disagree. The problem from the banks' point of view is uncertainty. Most commercial banks are flush right now, they can soak up the costs in the short term and plan for the long. But dragging out the uncertainty long-term means they don't entirely know how to move but have to cover their asses for the worst case. This is when lending decreases. The longer it lasts, the less certainty, the more it will affect lending.

Unfortunately we have an economy that runs on credit, which means tightening credit affects the entire economy. Some tightening is necessary as the loosey goosey rules is what got us here in the first place. But tighten it too much and everything freezes. For those who are clearly beyond help (not just on the cusp, as you rather disingenuously claim) why not just get it over with and remove that amount of uncertainty? The better the banks can forecast, the more likely they will be to part with their cash.

My job depends heavily on what happens with lending, so I follow this stuff pretty closely. It's not a matter of what will actually happen, but what the banks *think might* happen and what they will have to do to survive it if it does that affects their behavior.

Help who you can, but not everybody can be helped. These people were qualifying loans on 50%+ debt to gross income ratios, and that was before the ARMs reset, the value of the home plummeted and the unemployment hit. There is no way the homeowners can afford it even with what the regulations allow for modification which means foreclosure is inevitable. Sure, the banks deserve to take a hit. Let them take it and get it over with.

 

[Maple]

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.

He is an economic MORON.

 

[chanel]

I started a thread about this last week. I think the only liberal rebuttals were "sloppy source". "Bush's fault" and "what about the homeless children? if I remember correctly. Lol

 

[Conspiracist]

I started a thread about this last week. I think the only liberal rebuttals were "sloppy source". "Bush's fault" and "what about the homeless children? if I remember correctly. Lol

Sell the homeless kids to the Chinese for labor!

 

[Misty]

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.

The Free market is a summary term for an array of exchanges that take place in society. I sell something, you buy it, that is a free market exchange.