Oh Dear God!! Not again

[Foxfyre]

I have not blamed anything on Obama, Freddie, or Fannie. I have blamed Presidents and Congressiional leaders that forced policies that resulted in the economic meltdown. The fact that they did it in part through Fannie and Freddie is an aside. Obama did not create the financial meltdown. He IS however promoting another one with the policy he has just suggested.

And the fact that you ignore or can't see THAT speaks volumes.

Please explain how lowering someone's monthly interest payment is "promoting another financial meltdown".

I thought I took some pains to explain that in an earlier post today. You must have overlooked it.

 

[g5000]

I have not blamed anything on Obama, Freddie, or Fannie. I have blamed Presidents and Congressiional leaders that forced policies that resulted in the economic meltdown. The fact that they did it in part through Fannie and Freddie is an aside. Obama did not create the financial meltdown. He IS however promoting another one with the policy he has just suggested.

And the fact that you ignore or can't see THAT speaks volumes.

Please explain how lowering someone's monthly interest payment is "promoting another financial meltdown".

I thought I took some pains to explain that in an earlier post today. You must have overlooked it.

You did not explain it. You talked about fantasy scenarios that have nothing to do with the program outlined in the OP story.

So please explain how someone refinancing into a lower interest loan leads to financial meltdown. Let's stay in the real world.

 

[g5000]

The program in the OP is vey simple.

Say you borrowed $300,000 at 7 percent interest. That means your monthly payment is roughly $2300.

Your house is now worth $250,000. Because the house is worth less than what you owe, you have not been able to refinance.

Current interest rates are less than 4 percent.

This program would allow you to refinance at that lower rate.

The monthly payment for $300,000 at 4 percent is $1750.

Your monthly payment would drop by $550.

If your current interest rate is 6 percent, you would see your monthly payment drop by $200.

Either way, this means you are more easily able to make your payments. Which means you are less likely to default.


Some dipshits in this topic think an extra $500 in people's pockets and fewer foreclosures will actually lead to a financial meltdown!

 

[Foxfyre]

Please explain how lowering someone's monthly interest payment is "promoting another financial meltdown".

I thought I took some pains to explain that in an earlier post today. You must have overlooked it.

You did not explain it. You talked about fantasy scenarios that have nothing to do with the program outlined in the OP story.

So please explain how someone refinancing into a lower interest loan leads to financial meltdown. Let's stay in the real world.

Okay, maybe if I type more slowly you'll get it.

Artificially low interest rates decrease the margin of profit the financial institutions receive when they loan out the money. They also encourage people to buy a bigger more expensive house or other property than they otherwise would likely do. They discourage savings as little return will be realized on the savings so people spend more.

Then when you have an economic downturn--and there will ALWAYS be recessionary periods in the strongest economies--it takes far fewer folks not making their payments to erase the profits in the financial institutions and freeze up credit. This further depresses the economy and triggers more defaults, most especially among those who have little investment in the properties they buy. As this condition escalates the banks become unstable.

Because there were so many toxic loans encouraged throughout the Clinton and Bush administrations--and Freddie and Fannie were a large part of that--the situation escalated into a crisis.

And now Obama's new 'help out folks with their mortgages' and 'help poor folks buy houses' program will promote much more of the same.

 

[The Infidel]

I thought I took some pains to explain that in an earlier post today. You must have overlooked it.

You did not explain it. You talked about fantasy scenarios that have nothing to do with the program outlined in the OP story.

So please explain how someone refinancing into a lower interest loan leads to financial meltdown. Let's stay in the real world.

Okay, maybe if I type more slowly you'll get it.

Artificially low interest rates decrease the margin of profit the financial institutions receive when they loan out the money. They also encourage people to buy a bigger more expensive house or other property than they otherwise would likely do. They discourage savings as little return will be realized on the savings so people spend more.

Then when you have an economic downturn--and there will ALWAYS be recessionary periods in the strongest economies--it takes far fewer folks not making their payments to erase the profits in the financial institutions and freeze up credit. This further depresses the economy and triggers more defaults, most especially among those who have little investment in the properties they buy. As this condition escalates the banks become unstable.

Because there were so many toxic loans encouraged throughout the Clinton and Bush administrations--and Freddie and Fannie were a large part of that--the situation escalated into a crisis.

And now Obama's new 'help out folks with their mortgages' and 'help poor folks buy houses' program will promote much more of the same.

Figured I would make it a little easier to see as well.....


Just trying to do my part

 

[g5000]

I thought I took some pains to explain that in an earlier post today. You must have overlooked it.

You did not explain it. You talked about fantasy scenarios that have nothing to do with the program outlined in the OP story.

So please explain how someone refinancing into a lower interest loan leads to financial meltdown. Let's stay in the real world.

Okay, maybe if I type more slowly you'll get it.

Artificially low interest rates decrease the margin of profit the financial institutions receive when they loan out the money. They also encourage people to buy a bigger more expensive house or other property than they otherwise would likely do. They discourage savings as little return will be realized on the savings so people spend more.

As I carefully explained, this has NOTHING to do with what this plan is about. This is about refinancing, it is has nothing to do with new purchases.

This plan does not encourage people to buy houses. It is about refinancing existing loans for houses which have already been bought.

[And now Obama's new 'help out folks with their mortgages' and 'help poor folks buy houses' program will promote much more of the same.

This is where you go seriously wrong. This is not about helping people buy houses. Jesus, did you even READ the OP article?

 

[g5000]

You did not explain it. You talked about fantasy scenarios that have nothing to do with the program outlined in the OP story.

So please explain how someone refinancing into a lower interest loan leads to financial meltdown. Let's stay in the real world.

Okay, maybe if I type more slowly you'll get it.

Artificially low interest rates decrease the margin of profit the financial institutions receive when they loan out the money. They also encourage people to buy a bigger more expensive house or other property than they otherwise would likely do. They discourage savings as little return will be realized on the savings so people spend more.

Then when you have an economic downturn--and there will ALWAYS be recessionary periods in the strongest economies--it takes far fewer folks not making their payments to erase the profits in the financial institutions and freeze up credit. This further depresses the economy and triggers more defaults, most especially among those who have little investment in the properties they buy. As this condition escalates the banks become unstable.

Because there were so many toxic loans encouraged throughout the Clinton and Bush administrations--and Freddie and Fannie were a large part of that--the situation escalated into a crisis.

And now Obama's new 'help out folks with their mortgages' and 'help poor folks buy houses' program will promote much more of the same.

Figured I would make it a little easier to see as well.....


Just trying to do my part

Amplifying your stupidity does not help your case.

 

[g5000]

Let's read the OP article, shall we?

I am tempted to blow up its size to help you see it better, but I will resist.

President Barrack Obama is set to announce a new package of regulations and draft bills intended to provide cheap or free mortgage refinances to middle-class homeowners across the country.

If implemented, the election-year gambit would reduce mortgage holders’ payments’ by a few hundred dollars per month, according to an administration statement.

Understand? Refinancing. Not NEW financing. RE-financing. Get it now, dipshits?

 

[g5000]

So, to repeat myself:

The program in the OP is vey simple.

Say you borrowed $300,000 at 7 percent interest. That means your monthly payment is roughly $2300.

Your house is now worth $250,000. Because the house is worth less than what you owe, you have not been able to refinance.

Current interest rates are less than 4 percent.

This program would allow you to refinance at that lower rate.

The monthly payment for $300,000 at 4 percent is $1750.

Your monthly payment would drop by $550.

If your current interest rate is 6 percent, you would see your monthly payment drop by $200.

Either way, this means you are more easily able to make your payments. Which means you are less likely to default.


THIS HAS NOTHING TO DO WITH BUYING A NEW HOUSE OR ORIGINATING MORE LOANS. IT IS ABOUT REFINANCING EXISTING LOANS.

 

[g5000]

And now Obama's new 'help out folks with their mortgages' and 'help poor folks buy houses' program will promote much more of the same.

This is called "making shit up".

I defy you to show me in the OP article where it says this is about helping low income people get into houses.

There's clueless and then there's assholery. This imaginary "help poor folks buy houses" is sheer assholery.

 

[g5000]

If a house is underwater and the borrower defaults, the holder of the paper on that house is going to take a big loss because the market value of the house is much less than the amount owed.

If you lower the monthly mortgage payment for the borrower, you decrease the chances they will default. Therefore, you decrease the chances the banks will take a loss.

It is that simple. But apparently too complicated for simpletons who have an inexplicable need to make shit up.

 

[Foxfyre]

You did not explain it. You talked about fantasy scenarios that have nothing to do with the program outlined in the OP story.

So please explain how someone refinancing into a lower interest loan leads to financial meltdown. Let's stay in the real world.

Okay, maybe if I type more slowly you'll get it.

Artificially low interest rates decrease the margin of profit the financial institutions receive when they loan out the money. They also encourage people to buy a bigger more expensive house or other property than they otherwise would likely do. They discourage savings as little return will be realized on the savings so people spend more.

As I carefully explained, this has NOTHING to do with what this plan is about. This is about refinancing, it is has nothing to do with new purchases.

This plan does not encourage people to buy houses. It is about refinancing existing loans for houses which have already been bought.

[And now Obama's new 'help out folks with their mortgages' and 'help poor folks buy houses' program will promote much more of the same.

This is where you go seriously wrong. This is not about helping people buy houses. Jesus, did you even READ the OP article?

You have trouble reading between the lines too, yes. First time homeowners will also benefit from those artificially low interest rates. People who now owe more than their houses are worth will be able to refinance at the artificially low rates putting the banks at even further risk. People will be able to pull equity out of their homes and refinance larger mortgages at the artificially low rates which also puts the banks at higher risk and makes default much more attractive in difficult times.

This will be the fourth similar plan the Obama administration has promoted with even the most leftist commenators, publications, and administrators admitting have had negligible effect on the housing market which continues to be a drag on the economy. Obama refuses to do much of anything that would stimulate the private sector to begin investing again and creating good paying permanent jobs which is the ONLY real solution to the current economic mess. He continues to push government investment and rescue as the solutions. It isn't. It has never been.

 

[g5000]

You have trouble reading between the lines too, yes.

Translation: "You have trouble making shit up."

When the actual black parts didn't fit into your fantasy narrative you are trying to create, you just decided to invent some shit. It plainly says helping refinance existing loans, but don't let the FACTS stop you! Make up some shit about "help poor folks buy houses" and first time borrowers. No one will read the link. They'll believe your shit. I know how that works. And now that you have been caught at it, you are too embarassed to back out.

First time homeowners will also benefit from those artificially low interest rates.

First time homeowners have nothing to do with this plan. First time borrowers are already getting loans at the current market rates. Again, that has NOTHING to do with this plan.

This plan has to do with making it easier for upside down homeowners in existing loans to refinance at current market rates.

You simply made the "help poor folks buy houses" shit up. You make up a fantasy narrative in your fevered mind and then blame Obama for it. I see what you did there.

 

[8537]

I thought I took some pains to explain that in an earlier post today. You must have overlooked it.

You did not explain it. You talked about fantasy scenarios that have nothing to do with the program outlined in the OP story.

So please explain how someone refinancing into a lower interest loan leads to financial meltdown. Let's stay in the real world.

Okay, maybe if I type more slowly you'll get it.

Artificially low interest rates decrease the margin of profit the financial institutions receive when they loan out the money.

Huh? "artificially" low interest rates (whatever that means) lead to banks making more loans and they don't impact the spread. So why would this decrease bank profits? Quite the contrary, it would increase bank profits.

 

[naturegirl]

So what bank is going to loan you money at a lower interest rate on a house that will not appraise for what you are asking the bank to loan you?? The government will be forcing the bank to refinance mortgages on houses that aren't worth the value of the loan.

The government forcing any business to do something to the detriment of the business usually causes huge financial losses for the business. Now, I'm not a rocket scientist but explain to me exactly what is good about forcing banks to give out loans for more than the collateral??

 

[8537]

So what bank is going to loan you money at a lower interest rate on a house that will not appraise for what you are asking the bank to loan you?? The government will be forcing the bank to refinance mortgages on houses that aren't worth the value of the loan.

The government forcing any business to do something to the detriment of the business usually causes huge financial losses for the business. Now, I'm not a rocket scientist but explain to me exactly what is good about forcing banks to give out loans for more than the collateral??

This program does not involve forcing the banks to make loans. Please do at least some cursory research before discussing a topic.

 

[Foxfyre]

You did not explain it. You talked about fantasy scenarios that have nothing to do with the program outlined in the OP story.

So please explain how someone refinancing into a lower interest loan leads to financial meltdown. Let's stay in the real world.

Okay, maybe if I type more slowly you'll get it.

Artificially low interest rates decrease the margin of profit the financial institutions receive when they loan out the money.

Huh? "artificially" low interest rates (whatever that means) lead to banks making more loans and they don't impact the spread. So why would this decrease bank profits? Quite the contrary, it would increase bank profits.

Only if the loans are good loans. When a low interest rate is market driven using sound banking practices, your theory has merit. In this climate, when the government continues to demand that the banks utilize questionable or unsound banking practices to accomplish a political goal, it won't happen. Naturegirl stated one of those issues--forcing the banks to refinance and lower interest rates on homes that are under water increases the risk to the bank while doing nothing to significantly increase the ability of the homeowner to pay his/her mortgage when he or she is out of work.

A loan on a property that is worth less than the loan against it is not a good loan.

We will see more bank closings and/or bailouts if Obama succeeds in this policy.

 

[Sunshine]

So what bank is going to loan you money at a lower interest rate on a house that will not appraise for what you are asking the bank to loan you?? The government will be forcing the bank to refinance mortgages on houses that aren't worth the value of the loan.

The government forcing any business to do something to the detriment of the business usually causes huge financial losses for the business. Now, I'm not a rocket scientist but explain to me exactly what is good about forcing banks to give out loans for more than the collateral??

This program does not involve forcing the banks to make loans. Please do at least some cursory research before discussing a topic.

That's what refinancing is, a new loan that replaces one you already have.

Please at least do some cursory research before discussing a topic.

http://en.wikipedia.org/wiki/Refinancing

 

[Sunshine]

If a house is underwater and the borrower defaults, the holder of the paper on that house is going to take a big loss because the market value of the house is much less than the amount owed.

If you lower the monthly mortgage payment for the borrower, you decrease the chances they will default. Therefore, you decrease the chances the banks will take a loss.

It is that simple. But apparently too complicated for simpletons who have an inexplicable need to make shit up.

A person who is 'underwater' on his house is not more likely to pay it off with a lower interset rate/lower payment. He would still be paying more than the house is worth, and his best bet for self is to default and let the bank take the loss.

It's that simple. But apparently too complicated for simpletons who have an inexplicable need to make shit up.

 

[hortysir]

so, to repeat myself:

The program in the op is vey simple.

Say you borrowed $300,000 at 7 percent interest. That means your monthly payment is roughly $2300.

Your house is now worth $250,000. Because the house is worth less than what you owe, you have not been able to refinance.

Current interest rates are less than 4 percent.

This program would allow you to refinance at that lower rate.

The monthly payment for $300,000 at 4 percent is $1750.

Your monthly payment would drop by $550.

If your current interest rate is 6 percent, you would see your monthly payment drop by $200.

Either way, this means you are more easily able to make your payments. Which means you are less likely to default.


This has nothing to do with buying a new house or originating more loans. It is about refinancing existing loans.

or extending the life of the loan??