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You might want to read this entire thread. You have missed a significant portion of it.
Sunshine, I've read the entire thread. Do you have a point? Do you deny that some people who are current on their mortgage are about to face A significant problem when their ARM adjusts?
Have you ever heard of Truth in Lending?
Truth in Lending Act - Wikipedia, the free encyclopedia
They knew what they were signing. I have known people who had SEVERE financial problems when the ARM they AGREED TO adjusted. Tuff shit. They knew what they were buying when they bought it.
You don't have to take an ARM. If you bank shop you can find a fixed rate mortgate. We did in the 70s when everbody else was bending over signing up for ARMs so they could get fucked coming and going.
"Stupid is as stupid does!" Forrest Gump
well, yes - of course it's a bailout for the banks and the And the GSEs! Thats the Great American Way! Of course, this bailout comes witht a tax, but that tax will be dwarfed by the payouts.
Tell me something... why should someone who buys more of a home then they can afford.... win it by default?
by this reasoning.... i should go out and buy a mansion with grounds and a pool.... cry that i cant afford the mortgage....and get to keep it becasue i am defaulting on my loan.
What the hell gives you the idea anyone is being gifted with a free house with this refinancing proposal?
It is extremely ironic you people sit in judgement of others for supposedly being financially irresponsible when you then make statements that demonstrate extreme financial ignorance.
All this proposal is trying to do is LOWER THE INTEREST PAYMENT on a mortgage!
It is not lowering the principal, which was the price they paid for the house. Do you people get that?
The only effect lower interest payments will have is that the banks will make less profit on the loans they made or bought in the secondary market.
Which means that the bank, its depositors, and stockholders are being shafted! DUH!
What the hell gives you the idea anyone is being gifted with a free house with this refinancing proposal?
It is extremely ironic you people sit in judgement of others for supposedly being financially irresponsible when you then make statements that demonstrate extreme financial ignorance.
All this proposal is trying to do is LOWER THE INTEREST PAYMENT on a mortgage!
It is not lowering the principal, which was the price they paid for the house. Do you people get that?
The only effect lower interest payments will have is that the banks will make less profit on the loans they made or bought in the secondary market.
Which means that the bank, its depositors, and stockholders are being shafted! DUH!
And why should the borrowers be the only ones to bear the burden?
Imagine you are a banker. You eat, sleep, drink, and shit money. You talk in terms of "LIBOR" and "Inverse floaters", the first thing you do when you wake up every day is check the TED spread.
That's who is on one side of the table.
On the other side of the table is the borrower, middle class white nose picker, who hasn't a clue about any of those things. He doesn't know an ARM from a hole in the wall, but when one is slid across the table, he happily goes for it based on the soothing dulcet tones of the banker's assurances.
Which one bears the most responsibility for making sure the borrower has the ability to pay?
I know you want to say "they both share equal responsibility" just to be a jerk, but the banker knows far, far, far better than the borrower does. Especially in the heat of the global property bubble.
So why should the banker feel NO PAIN when the shit starts blowing up?
Why does the banker get TARP money and the borrower gets no help at all? Why should the investors who incited all this shit be protected from any losses incurred by their own stupidity?
This is some bullshit reasoning you are demonstrating. It certainly isn't Republican reasoning which demands people pay the price of their foolishness. What you are demonstrating is that you only want the most vulnerable side of the table to pay the price for stupidity while you protect the side that had the most inside knowledge of the situation.
And that is bullshit.
Not only that, I can show you undeniable evidence that the banks deliberately put these people into these types of loans precisely to revitalize the lagging re-fi industry. They believed interest rates would go up and so would their profits. They were dead wrong.
A re-fi today means lower interest rates and lower profits. But it still means profits.
Doesn't it though? The wrong people are getting the rewards these days.
This plan is for people who are current on their payments.
If people are current with payments, there is no need for 'help'
This is the biggest crock of shit I have seen since Obamalama and the DEMs last crock of shit
This plan is for people who are current on their payments.
If people are current with payments, there is no need for 'help'
This is the biggest crock of shit I have seen since Obamalama and the DEMs last crock of shit
The way I understand it, it's for people that are current in their payments but are "upside down" through no fault of their own.
So, yes, it's a bailout for the banks because people that still owe 200k on a house that's only worth 75k aren't too interested in continuing to pay for it.
Big brother wants to give the banks their missing 125k difference when it was the government and big banks' fault that these properties are upside down to start with.
Neat little racket, hunh?
The way I understand it, it's for people that are current in their payments but are "upside down" through no fault of their own.
So, yes, it's a bailout for the banks because people that still owe 200k on a house that's only worth 75k aren't too interested in continuing to pay for it.
Big brother wants to give the banks their missing 125k difference when it was the government and big banks' fault that these properties are upside down to start with.
Neat little racket, hunh?
The way I understand it, it's for people that are current in their payments but are "upside down" through no fault of their own.
So, yes, it's a bailout for the banks because people that still owe 200k on a house that's only worth 75k aren't too interested in continuing to pay for it.
Big brother wants to give the banks their missing 125k difference when it was the government and big banks' fault that these properties are upside down to start with.
Neat little racket, hunh?
"Big brother" is not giving the banks any "missing money" with this deal. If this refinancing program actually goes through, banks will make less profits off the loans.
But that is better than the current plan. The federal government has been providing low interest rates to the banks since the crisis started so the banks can make gigantic carry trades at unimaginable economies of scale.
Then, once the banks have made profits through these carry trades, then they can write off their loan losses. And then the crisis is passed.
This is exactly what the Fed has done for the banks many times in the past.
But that kind of plan has the consequence of actually incentivizing defaults.
This plan will have the effect of disincentivizing defaults. How anyone can consider that to be a bad thing is beyond me.
0bama is going to force banks to refinance mortgages for folks that are underwater with their home values.
Isn't this what happened the first time?? And what about those homeowners that don't have jobs and are making their house payments from their savings and borrowing from family members?? They won't qualify for a mortgage if they don't have a job.
What about those homeowners that have taken part time jobs and are barely squeaking by. If their income will not allow the mortgage repayment they won't qualify for a new loan.
Isn't this how we got in this mess?? The government messing with the lending industry to let people buy houses they couldn't afford.
mortgage | homeowner bill of rights | barack obama | the daily caller
yes it is, and it all started with jiminy ( deliberate ) carter. Obama is sliding everything including the kitchen sink, through, before his failure in november.
The community reinvestment act (cra, pub.l. 95-128, title viii of the housing and community development act of 1977, 91 stat. 1147, 12 u.s.c. § 2901 et seq.) is a united states federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.[1][2][3] congress passed the act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.[4][5]
the act requires the appropriate federal financial supervisory agencies to encourage regulated financial institutions to help meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation (section 802.) to enforce the statute, federal regulatory agencies examine banking institutions for cra compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions (section 804.)[6]
Yes it is, and it all started with Jiminy ( deliberate ) Carter. Obama is sliding everything including the kitchen sink, through, before his failure in November.
0bama is going to force banks to refinance mortgages for folks that are underwater with their home values.
Isn't this what happened the first time?
No, it's not.
To those without a clue:
Banks do not get 'free' money from the Fed. They do borrow, on a 24-hour basis, money fron the U.S. Treasury. The interest rates, however, are set by the Fed. They have to pay interest on what they borrow at the discount rate set by the Fed who also sets the prime rate that the folks getting the very best deals borrow at--currently 3.25%.
The banks are like any other business. They deal in a product, which happens in their case to be money. They make money by charging interest to those who borrow from them plus commissions and fees on investments and services.
They have to have a certain amount of cash on reserve at all times, but they otherwise loan out the money they borrow from the Treasury and also loan out some of the money that people have on deposit for them. The more depositors the bank has, the less money they have to borrow from the government and the more profitable the bank is. When the bank demands sound lending practices and solid qualifcations from borrowers, defaults are fairly rare and the bank can weather those and still show a profit.
When interest rates are in their normal range--high enough for the banks to profit but low enough to encourage investment and large item (houses, cars, etc.) borrowing, inflation is kept sufficiently in check and the economy rocks along at a comfortable pace.
Make interest rates too high, and the economy is immediatekly depressed. Runaway double digit inflation in the Carter years resulted in double digit interest rates pushing 20% at one point. That, coupled with other negatives, got Reagan elected in 1980.
Make interest rates too low, however, coupled with government pressure to make riskier loans to low income people, and even a few defaults, inevitable in those circumstances, can wipe out a bank's entire profits for a year or several years. Remember they are making those loans for 10 to 30 years and they can't call back the money they have loaned out just because they are in trouble.
Bundle a few good loans with a lot of risky ones as Freddie and Fannie did and sell them off to unsuspecting banks/financial institutions, and you have the recipe for a huge inflationary housing bubble that will inevitably burst and crash the economy as happened in late 2008.
It appears our Fearless Leader didn't learn a damn thing about all that and intends to try to do it again.
Sigh.
"Obama Will Refinance Everybody's Loans. "All You Have To Do Is Promise To Vote For Him."
*
Porky Limbaugh
To those without a clue:
Banks do not get 'free' money from the Fed. They do borrow, on a 24-hour basis, money fron the U.S. Treasury. The interest rates, however, are set by the Fed. They have to pay interest on what they borrow at the discount rate set by the Fed who also sets the prime rate that the folks getting the very best deals borrow at--currently 3.25%.
The banks are like any other business. They deal in a product, which happens in their case to be money. They make money by charging interest to those who borrow from them plus commissions and fees on investments and services.
They have to have a certain amount of cash on reserve at all times, but they otherwise loan out the money they borrow from the Treasury and also loan out some of the money that people have on deposit for them. The more depositors the bank has, the less money they have to borrow from the government and the more profitable the bank is. When the bank demands sound lending practices and solid qualifcations from borrowers, defaults are fairly rare and the bank can weather those and still show a profit.
When interest rates are in their normal range--high enough for the banks to profit but low enough to encourage investment and large item (houses, cars, etc.) borrowing, inflation is kept sufficiently in check and the economy rocks along at a comfortable pace.
Make interest rates too high, and the economy is immediatekly depressed. Runaway double digit inflation in the Carter years resulted in double digit interest rates pushing 20% at one point. That, coupled with other negatives, got Reagan elected in 1980.
Make interest rates too low, however, coupled with government pressure to make riskier loans to low income people, and even a few defaults, inevitable in those circumstances, can wipe out a bank's entire profits for a year or several years. Remember they are making those loans for 10 to 30 years and they can't call back the money they have loaned out just because they are in trouble.
Bundle a few good loans with a lot of risky ones as Freddie and Fannie did and sell them off to unsuspecting banks/financial institutions, and you have the recipe for a huge inflationary housing bubble that will inevitably burst and crash the economy as happened in late 2008.
It appears our Fearless Leader didn't learn a damn thing about all that and intends to try to do it again.
Sigh.
To those without a clue:
Banks do not get 'free' money from the Fed. They do borrow, on a 24-hour basis, money fron the U.S. Treasury. The interest rates, however, are set by the Fed. They have to pay interest on what they borrow at the discount rate set by the Fed who also sets the prime rate that the folks getting the very best deals borrow at--currently 3.25%.
The banks are like any other business. They deal in a product, which happens in their case to be money. They make money by charging interest to those who borrow from them plus commissions and fees on investments and services.
They have to have a certain amount of cash on reserve at all times, but they otherwise loan out the money they borrow from the Treasury and also loan out some of the money that people have on deposit for them. The more depositors the bank has, the less money they have to borrow from the government and the more profitable the bank is. When the bank demands sound lending practices and solid qualifcations from borrowers, defaults are fairly rare and the bank can weather those and still show a profit.
When interest rates are in their normal range--high enough for the banks to profit but low enough to encourage investment and large item (houses, cars, etc.) borrowing, inflation is kept sufficiently in check and the economy rocks along at a comfortable pace.
Make interest rates too high, and the economy is immediatekly depressed. Runaway double digit inflation in the Carter years resulted in double digit interest rates pushing 20% at one point. That, coupled with other negatives, got Reagan elected in 1980.
Make interest rates too low, however, coupled with government pressure to make riskier loans to low income people, and even a few defaults, inevitable in those circumstances, can wipe out a bank's entire profits for a year or several years. Remember they are making those loans for 10 to 30 years and they can't call back the money they have loaned out just because they are in trouble.
Bundle a few good loans with a lot of risky ones as Freddie and Fannie did and sell them off to unsuspecting banks/financial institutions, and you have the recipe for a huge inflationary housing bubble that will inevitably burst and crash the economy as happened in late 2008.
It appears our Fearless Leader didn't learn a damn thing about all that and intends to try to do it again.
Sigh.
PLEASE! PLEASE! PLEASE! You are confusing them with facts!!!! That MUST stop at once!
To those without a clue:
Banks do not get 'free' money from the Fed. They do borrow, on a 24-hour basis, money fron the U.S. Treasury. The interest rates, however, are set by the Fed. They have to pay interest on what they borrow at the discount rate set by the Fed who also sets the prime rate that the folks getting the very best deals borrow at--currently 3.25%.
The banks are like any other business. They deal in a product, which happens in their case to be money. They make money by charging interest to those who borrow from them plus commissions and fees on investments and services.
They have to have a certain amount of cash on reserve at all times, but they otherwise loan out the money they borrow from the Treasury and also loan out some of the money that people have on deposit for them. The more depositors the bank has, the less money they have to borrow from the government and the more profitable the bank is. When the bank demands sound lending practices and solid qualifcations from borrowers, defaults are fairly rare and the bank can weather those and still show a profit.
When interest rates are in their normal range--high enough for the banks to profit but low enough to encourage investment and large item (houses, cars, etc.) borrowing, inflation is kept sufficiently in check and the economy rocks along at a comfortable pace.
Make interest rates too high, and the economy is immediatekly depressed. Runaway double digit inflation in the Carter years resulted in double digit interest rates pushing 20% at one point. That, coupled with other negatives, got Reagan elected in 1980.
Make interest rates too low, however, coupled with government pressure to make riskier loans to low income people, and even a few defaults, inevitable in those circumstances, can wipe out a bank's entire profits for a year or several years. Remember they are making those loans for 10 to 30 years and they can't call back the money they have loaned out just because they are in trouble.
Bundle a few good loans with a lot of risky ones as Freddie and Fannie did and sell them off to unsuspecting banks/financial institutions, and you have the recipe for a huge inflationary housing bubble that will inevitably burst and crash the economy as happened in late 2008.
It appears our Fearless Leader didn't learn a damn thing about all that and intends to try to do it again.
Sigh.
"Unsuspecting banks."
Jesus, that is one of the funniest things I have heard in a while.
To those without a clue:
Banks do not get 'free' money from the Fed. They do borrow, on a 24-hour basis, money fron the U.S. Treasury. The interest rates, however, are set by the Fed. They have to pay interest on what they borrow at the discount rate set by the Fed who also sets the prime rate that the folks getting the very best deals borrow at--currently 3.25%.
The banks are like any other business. They deal in a product, which happens in their case to be money. They make money by charging interest to those who borrow from them plus commissions and fees on investments and services.
They have to have a certain amount of cash on reserve at all times, but they otherwise loan out the money they borrow from the Treasury and also loan out some of the money that people have on deposit for them. The more depositors the bank has, the less money they have to borrow from the government and the more profitable the bank is. When the bank demands sound lending practices and solid qualifcations from borrowers, defaults are fairly rare and the bank can weather those and still show a profit.
When interest rates are in their normal range--high enough for the banks to profit but low enough to encourage investment and large item (houses, cars, etc.) borrowing, inflation is kept sufficiently in check and the economy rocks along at a comfortable pace.
Make interest rates too high, and the economy is immediatekly depressed. Runaway double digit inflation in the Carter years resulted in double digit interest rates pushing 20% at one point. That, coupled with other negatives, got Reagan elected in 1980.
Make interest rates too low, however, coupled with government pressure to make riskier loans to low income people, and even a few defaults, inevitable in those circumstances, can wipe out a bank's entire profits for a year or several years. Remember they are making those loans for 10 to 30 years and they can't call back the money they have loaned out just because they are in trouble.
Bundle a few good loans with a lot of risky ones as Freddie and Fannie did and sell them off to unsuspecting banks/financial institutions, and you have the recipe for a huge inflationary housing bubble that will inevitably burst and crash the economy as happened in late 2008.
It appears our Fearless Leader didn't learn a damn thing about all that and intends to try to do it again.
Sigh.
PLEASE! PLEASE! PLEASE! You are confusing them with facts!!!! That MUST stop at once!
You doofuses seem to think the entire secondary market was made up of Fannie and Freddie.
By 2005, Fannie and Freddie were less than half the secondary market.
As I mentioned earlier, which you have conveniently ignored, is that the collapse of Lehman had nothing to do with the CRA. Nor did it have much to do with Fannie and Freddie. Lehman Brothers had its own supply chain of mortgage brokers. It blew itself up with toxic assets allllllllll by itself.
The government did not push Lehman to make toxic loans. Quite the opposite. Lehman Brothers, along with the other four largest broker dealers on Wall Street, went to the SEC in 2005 and asked to be exempted from the government's capital reserve requirements. The SEC unanimously voted in favor of this request.
So you are pretty much speaking out of your asses.
