Obama Thinking About Doing Something Really Bizarre and Stupid

[Oddball]

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?

How do they benefit by holding mortgages that aren't being paid?

If they have the house, at least there's something to liquidate.

 

[Toro]

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?

Would you lend your money to someone if the government inserted itself as an adjudicator on whether or not you could collect your money? The answer is "yes" if the rate is high enough, but the rates are not high enough now. This would cause banks to lend less as they reject marginal credits or demand a higher interest rates.

The market has to clear. I understand the need to contain the downward spiral in home prices, but home prices have actually been rising since April. So there is no need for the government to insert itself into this process. Before the market can start moving again, the bad loans have to be removed from the balance sheets, which means that the properties have to be foreclosed and sold. The government slowing this process prolongs the recession.

 

[Toro]

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?

Capital cannot be channeled efficiently by the banking system until the bad loans are cleared away. The more that unprofitable loans are kept on the banks' books, the less capital there is to lend because current capital is being used to service dead loans.

The bonus issue is a canard. Small banks aren't lending either and those guys aren't paying big bonuses.

 

[editec]

About 2.82 million U.S. homeowners lost properties to foreclosure last year and 4.5 million filings are expected in 2010, RealtyTrac Inc., an Irvine, California data company, said last month.

You don't suppose that the above alarming trend in foreclosures has anything to do with this policy, do you?

Incidently I understand and agree with those of you who think this isn't a good policy.

The above is merely me pointing out what is motivating this deperate act.


At this stage of the game I don't think there is any good policy that's going to stop the decline in middle class lives and hence in America's economic future, to be perfectly honest.

The time to have fixed the fundamental flaws in our economy is past.

Now we collectively reap the whirlwind of lopsided supply-sider policies that BOTH PARTIES has been enacting for the last thirty or fourty years.

The Randians objectivists were wrong.

They're still wrong.

They'll always be wrong because they truly do not understand the whole point of having government to begin with.

Society needs to balance supply with demand if it wants our kind of economy to flourish.

We've forgotten that, and now we're just going to have to live with the outcome of our tragic mistakes.

 

[Samson]

At this stage of the game I don't think there is any good policy that's going to stop the decline in middle class lives and hence in America's economic future, to be perfectly honest.

The time to have fixed the fundamental flaws in our economy is past.

Now we collectively reap the whirlwind of lopsided supply-sider policies that BOTH PARTIES has been enacting for the last thirty or fourty years.

Exactly.

And this is why we need to close down Washington D.C.

Simply give every beaurocrat 30 days to vacate the area, then lock all the government buildings.

 

[xsited1]

Obama Thinking About Doing Something Really Bizarre and Stupid

As opposed to everything else he's done that's been bizarre and stupid?

 

[del]

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.

whew!

i thought he'd stepped down in favor of biden...

 

[The T]

Obama Thinking About Doing Something Really Bizarre and Stupid

As opposed to everything else he's done that's been bizarre and stupid?

'Pends upon one's perspective. if you're a freedom lover, distrust Government? *Bizzare* is the word. If you sign onto Obama, and the Marxist/Progressive agenda? Your word would be *Normal* and why the fuss?

 

[Toro]

Obama Thinking About Doing Something Really Bizarre and Stupid

As opposed to everything else he's done that's been bizarre and stupid?

Well, that's another issue...

 

[jillian]

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?

Capital cannot be channeled efficiently by the banking system until the bad loans are cleared away. The more that unprofitable loans are kept on the banks' books, the less capital there is to lend because current capital is being used to service dead loans.

The bonus issue is a canard. Small banks aren't lending either and those guys aren't paying big bonuses.

Thanks for your response. Appreciated. I truly understand. I really do. But at what point do we say, "listen, it's time to renegotiate with some of these people. real estate prices have tanked because there are too many foredclosures on the market; you're not going to get 100% of your money anyway; and you gave loans you knew these people couldn't afford to pay in the first place".

I'm not saying that people who can never pay shouldn't be foreclosed on. But there are people who can pay what they initially signed on for, just without the jump in the ARM. Maybe it's better all around if they work things out.

And fair enough re the bonuses. But it does create negative perceptions.

And, mind you, I truly don't know what the answers are. But there is a serious problem and I'm not sure letting people get tossed from their homes solves it.

 

[Ravi]

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?

Capital cannot be channeled efficiently by the banking system until the bad loans are cleared away. The more that unprofitable loans are kept on the banks' books, the less capital there is to lend because current capital is being used to service dead loans.

The bonus issue is a canard. Small banks aren't lending either and those guys aren't paying big bonuses.

I haven't had a problem getting loans and as far as I can tell, neither have my clients.

 

[Ravi]

From what I read of the program...banks will not be allowed to foreclose until they have notified their borrowers that there is a mediation program that might help them.

I don't see how this hurts the banks...in fact, isn't in their own best interests to try to work out a deal instead of being stuck with thousands of homes they must now sell at a much lower amount than what they were purchased for?



It's not like the banks know what they are doing...if they did, we wouldn't be in this mess to begin with.

 

[Care4all]

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?

Capital cannot be channeled efficiently by the banking system until the bad loans are cleared away. The more that unprofitable loans are kept on the banks' books, the less capital there is to lend because current capital is being used to service dead loans.

The bonus issue is a canard. Small banks aren't lending either and those guys aren't paying big bonuses.

Toro, are you saying that if Paulson had done what he said he needed the TARP money for, and bought up the banks toxic assets (bad mortgages) or mortgaged back securities, we as a country would be in much BETTER shape right now, and banks WOULD be lending money left and right?

And if the answer is yes, then why in heaven's name, didn't he do it?

 

[Xenophon]

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.

And this is different from all the other stuff he comes up with?

The guy has no idea what he is doing.

He would however make a fine game show host.

 

[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.

And this is different from all the other stuff he comes up with?

The guy has no idea what he is doing.

He would however make a fine game show host.

I think you're wrong, he knows what he's doing and trying to get there by all means. Now, he's just touching the pulse, and then he attacks. Remember, he's goal is wealth redistribution.

By the way, have you seen Obama tried anything that doesn't involve huge amount of money? Coincidence?

 

[Toro]

Toro, are you saying that if Paulson had done what he said he needed the TARP money for, and bought up the banks toxic assets (bad mortgages) or mortgaged back securities, we as a country would be in much BETTER shape right now, and banks WOULD be lending money left and right?

And if the answer is yes, then why in heaven's name, didn't he do it?

No. Write-offs in the banking system have gone over $1 trillion globally. The Treasury would have lost hundreds of billions of dollars had they done that.

We would still be in this mess had the Treasury taken the toxic assets.

The loans have to be written off. But to do that, you have to have the assets, i.e. homes, that back up the loans. If you can't seize the assets, then the assets that back up the loan are effectively zero. Zero even further wipes out equity capital in the banking system, which even further restricts capital for loans.

The longer it takes to recapitalize the banking system, the longer this recession will be. A moratorium on foreclosures prolongs the process. This is similar to what happened in Japan, when the government would not clear out the bad corporate loans in the financial system, and all these zombie banks roamed around for years.

 

[WillowTree]

]Since the banks have taken our money to bail them out of their foolishness[/B], 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.

and most have paid it back with interest,, yes?

 

[boedicca]

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.

You've got to give him 10 Points For Consistency.

 

[Ravi]

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.

You've got to give him 10 Points For Consistency.

This sock puppet account smells like mal.

 

[boedicca]

Nope. Just a reg returning after a long hiatus.

But thanks for spinning some controversy.