New Mortgage Bailout Program: Stuck on Stupid.

[The Rabbi]

You're all missing the point.

The loans are only for F/F paper. The reason Obama is proposing a new government program is probably because the existing paper has either prepayment penalty or some yield maintenance that prohibits it from being refied

The investors who bought the higher yield paper need to get paid off -- thats my guess. I havent seen the specifics.

Investors with higher yield paper would want to hold it for as long as possible. If paid off they will have to reinvest at lower rates. So that doesnt make sense.
The program doesnt seem to do much of anything, except allow Obama to say he is "doing something to help."

 

[iamwhatiseem]

You're all missing the point.

The loans are only for F/F paper. The reason Obama is proposing a new government program is probably because the existing paper has either prepayment penalty or some yield maintenance that prohibits it from being refied

The investors who bought the higher yield paper need to get paid off -- thats my guess. I havent seen the specifics.

Well said and an excellent point.
Obama is supported heavily by Wall Street, and obviously reacts to that support. Banks would hate to write off many of these assets. It is now going on 4 years and financial institutions are still keeping a lot of this off the books in fear of more defaults. This would benefit these guys immensely if they can get these refied and ownership transfers soley to F&F.
If I understand correctly.

That and this could be an early attempt to stave off mass mortgage defaults if the economy slips later this year, 1st quarter next year.

 

[signelect]

There is no vote Obama won't buy, what a guy and we elected him. We had better do better in 2012 or there won't be a country to save.

 

[iamwhatiseem]

There is no vote Obama won't buy, what a guy and we elected him. We had better do better in 2012 or there won't be a country to save.

That is true of nearly any politician at any level.
Having said that - i would agree that Obama takes it to a whole new level. Take the "American Jobs Act"...anyone with two brain cells to rub together know that this bill is anything but a jobs creation bill..it is, IMO, one of the largest examples of voter appeasement in history.

 

[RDD_1210]

Here we go again. Why is Obama rolling out yet another soon-to-fail program to protect people from their own stupidity? I know the answer: the election is next year. But seriously. Will this guy ever get around to governing, like for real?
Obama to Announce New Program to Help Struggling Homeowners | ABC News - Yahoo! News
Note the requirements:

Now, if their mortgages are current with one late payment in the last 12 months, why in the hell do they need help to begin with? And since 80% of people enrolled in these programs end up foreclosed on anyway, why are we continuing to pour money into this?

Pour what money? Do you even understand what this bill does? The government isn't putting in any money.

So this program will be cost free? What gov't programs can you name that are cost-free? Why do you think (and I use the term loosely) that this won't cost anyone anything?

Because this program is just giving the option to people to refinance their mortgage at a lower rate and thus save money on their monthly payment. But, as you pointed out, it is only for those who have been making their payments and doing what they can to meet their obligations. This is a helping hand to those people before they reach foreclosure and are added to the big mess we already have. People love to whine that the government doesn't help out the person who tries to do the right thing. Well now they are and surprisingly, (and I use the term loosely) you are upset about it.

Again, this is optional and the government does not spend any money, it just changes restrictions for refinancing of mortgages for people who's homes have lost value but have continued to make their payments. People lower their payments and mortgage lenders can keep people out of foreclosure. Everyone wins. Except for you, you're still a racist asshole.

 

[Ravi]

Wow, just wow at the conspiracy theorists.

 

[iamwhatiseem]

Pour what money? Do you even understand what this bill does? The government isn't putting in any money.

So this program will be cost free? What gov't programs can you name that are cost-free? Why do you think (and I use the term loosely) that this won't cost anyone anything?

Because this program is just giving the option to people to refinance their mortgage at a lower rate and thus save money on their monthly payment. But, as you pointed out, it is only for those who have been making their payments and doing what they can to meet their obligations. This is a helping hand to those people before they reach foreclosure and are added to the big mess we already have. People love to whine that the government doesn't help out the person who tries to do the right thing. Well now they are and surprisingly, (and I use the term loosely) you are upset about it.

Again, this is optional and the government does not spend any money, it just changes restrictions for refinancing of mortgages for people who's homes have lost value but have continued to make their payments. People lower their payments and mortgage lenders can keep people out of foreclosure. Everyone wins. Except for you, you're still a racist asshole.

Wow...

 

[RDD_1210]

So this program will be cost free? What gov't programs can you name that are cost-free? Why do you think (and I use the term loosely) that this won't cost anyone anything?

Because this program is just giving the option to people to refinance their mortgage at a lower rate and thus save money on their monthly payment. But, as you pointed out, it is only for those who have been making their payments and doing what they can to meet their obligations. This is a helping hand to those people before they reach foreclosure and are added to the big mess we already have. People love to whine that the government doesn't help out the person who tries to do the right thing. Well now they are and surprisingly, (and I use the term loosely) you are upset about it.

Again, this is optional and the government does not spend any money, it just changes restrictions for refinancing of mortgages for people who's homes have lost value but have continued to make their payments. People lower their payments and mortgage lenders can keep people out of foreclosure. Everyone wins. Except for you, you're still a racist asshole.

Wow...

Solid response. Which part confuses you? Forget it......obviously the whole thing did.

You definitely are what you seem.

 

[grunt11b]

Here we go again. Why is Obama rolling out yet another soon-to-fail program to protect people from their own stupidity? I know the answer: the election is next year. But seriously. Will this guy ever get around to governing, like for real?
Obama to Announce New Program to Help Struggling Homeowners | ABC News - Yahoo! News
Note the requirements:

While administration officials say it will help thousands of homeowners, the program has its caveats. Only those homeowners whose mortgages are backed by Fannie Mae and Freddie Mac will be eligible for refinancing. They must have good credit and must have kept up with their mortgage payments, with no late payment in the past six months and no more than one late payment in the past 12 months. Additionally, the mortgage must have been sold to the agencies before May 31, 2009, and not been refinanced previously under the Home Affordable Refinance Program. The loan-to-value ratio has to be greater than 80 percent.

Now, if their mortgages are current with one late payment in the last 12 months, why in the hell do they need help to begin with? And since 80% of people enrolled in these programs end up foreclosed on anyway, why are we continuing to pour money into this?

He is setting the next GOP president up for failure is all he is doing. Iraq bill blow up sometime in 2013 and this new housing bubble he is creating will also at about the same time, then the left will sit back and point the finger at the president and say its all his/her fault, just like they did with the housing bubble of 2008. History repeats itself, for those who pay attention to it.

 

[iamwhatiseem]

Because this program is just giving the option to people to refinance their mortgage at a lower rate and thus save money on their monthly payment. But, as you pointed out, it is only for those who have been making their payments and doing what they can to meet their obligations. This is a helping hand to those people before they reach foreclosure and are added to the big mess we already have. People love to whine that the government doesn't help out the person who tries to do the right thing. Well now they are and surprisingly, (and I use the term loosely) you are upset about it.

Again, this is optional and the government does not spend any money, it just changes restrictions for refinancing of mortgages for people who's homes have lost value but have continued to make their payments. People lower their payments and mortgage lenders can keep people out of foreclosure. Everyone wins. Except for you, you're still a racist asshole.

Wow...

Solid response. Which part confuses you? Forget it......obviously the whole thing did.

You definitely are what you seem.

If ever it was possible to get drunk on Kool Aid - you have done it.
You probably believe the Jobs bill is about creating jobs too.

Sloooowwwlllyyy...read this...take a deep breath...concentrate on the relevance of this statement...you can do it....Fannie Mae and Freddie Mac have received $170,000,000,000 in taxpayer bailouts in the past 36 months..ALONE.

Get it?

 

[iamwhatiseem]

Just in time...

Fannie

 

[Remodeling Maidiac]

I get what you are saying Grampa....but I disagree.
We all knew this was happening. You can't tell me that a person whose household income was $85,000 that they didn't know they shouldn't be buying a $550,000 McMansion with no money down.
The entire system was absolutely geared for catastrophic failure and everyone involved knew it - including the buyers.
Pain must be shared. And I'll be damned if I want $billions more to bailout Mr. and Mrs. "I want it all now!" driving around in their little BMW's and sipping Starbucks coffee and whining because they overbought.
Sorry.

I hear ya but I don't drive a BMW or sip foo foo drinks. I've been in my house for quite some time and I wasn't part of this scam but many like me are feeling the crunch through no fault of their own.

What "crunch" are you feeling, exactly? You are making the same payment you made 5 years ago, assuming you have a mortgage at all. Your property taxes should have gone down in a re-assessment of the house's value. If you aren't putting your house on the market, so what if the value is lower? Your car loses value every day and I dont see the gov't rushing to bail out people from depreciating cars.

The crunch of our collapsed economy! My house isn't in this dog fight so to speak but I know others that are. Besides that isn't the point.

The housing market is holding the entire economy hostage. You free up a couple hundred dollars a month in home owners pockets and watch the buying power it gives. That's a direct infusion of blood into our half dead economy. Not to mention the added stability it gives to the housing market.

Forget for a fucking moment that Obama is president and look at the upside as contrasted to the risks. No tax payer money infused unless a home goes under. Which wouldn't matter because F & F are already on the hook. Remove some imbalance in the value of homes. The program is NOT MANDATORY. I'm not seeing the risks.

Again like I said in my topic. I don't give a rats ass how this makes Obama look if for once it can actually have an impact on the economy as a whole and not just one group of friends.

Show me where this is a risk to tax payers and ill bail on this ship. Concrete evidence, not I hate Obama so its bad.

 

[Ame®icano]

It is more of the same really.
All the government knows how to do is fix current problems by piling them up for the future.
In the long run - this is a TERRIBLE plan. People who do this will hate themselves later.
Example...45 year old couple has a mortgage that is $1700 per month. Mortgage is $200,0000...home value is $165,000. They have 15 years to pay on loan.
With the plan the interest rate will lower their payment to $1495...but does that really help much? Sooo...they refinance for 25 years and the payment comes down to a manageable $1200 per month.
Now they won't have their home paid off till they are 70 years old. Thereby damning any hopes of a retirement.

At first I'll just say that I don't like government involvement into any finances...

Now, I can't say that is all bad about his plan. One thing that is good is, those $300-$500 a month not going to house payment would be most likely spend elsewhere, meaning it's going back to economy. If million people refinance, that is quite a bit of money...

My 2c.

 

[Zoom-boing]

Obviously, only wealthy stockbrokers and bankers deserve government bailouts, not actual homeowners.

I agree in principle that all the folks who bought more house than they needed were part of the problem, but it wasn't like anyone was really trying to discourage them. Not the banks, not the realtors, not the "Flip this House" hucksters who told us that Real Estate was the way to go on investment.

As a practical matter, any comparble home that is foreclosed on brings down the value of my property, so anything that forestalls them is probably in all of our interests. Not sure this is the way to go, but better than the Romney "let them eat cake.... er let the foreclosures run their course" policy.

People who bought more house than they need is the PRIMARY problem.
Of the homes in foreclosure - it isn't the 2 bdrm little cottages - it is the 4 Brdm, 3 car garage with finished basements that are the biggest problem.

I agree- They are the problem. but that involved a banker who looked at their finances and should have realized they wouldn't be able to make their home payments if there was even the smallest of recessions. The Bankers didn't care. Because as long as house prices were shooting up, they could collect a couple years of mortgage payments, then sell the house for more than the principle.

It fell apart when the bubble burst.

Now, I think that the completely irresponsible shouldn't be helped, but people who are at least making the effort to keep up should be. Will the program do that? Probably not. government programs are notorious for encouraging the wrong kind of behavior.

When my hubs and I bought our first house some 25 years ago we were both working full-time so the bank couldn't understand why we only wanted loan numbers based on one salary rather than both salaries. They kept telling us 'but you can't afford nearly as much house if you only use one income'. And? We knew we wanted kids and we knew that I'd be staying home with them. So, we compromised. We bought a townhouse (not what we really wanted) vs. a single and went about 1/2 hour up the road to a much less developed/rural type area. We could afford a small but well built townhouse in a very nice development and we afforded it on one salary.

Just because the bank says 'hey, you can't afford not to take this deal!' doesn't mean they're right. Where is peoples common sense? And if homeowners don't know the answers then they should find someone who does before biting off more than they can afford.

 

[Mad Scientist]

Here we go again. Why is Obama rolling out yet another soon-to-fail program to protect people from their own stupidity?

It's the same one that only re-fied 8,000 some odd mortgages from a few years ago. But hey, it's like that Major League pitcher with the 100mph fast ball: He's gonna' keep throwing it for strikes until someone hammers it out of the park.

Why pass the football when your team chewing up massive yardage in the running game?

 

[Zoom-boing]

It is more of the same really.
All the government knows how to do is fix current problems by piling them up for the future.
In the long run - this is a TERRIBLE plan. People who do this will hate themselves later.
Example...45 year old couple has a mortgage that is $1700 per month. Mortgage is $200,0000...home value is $165,000. They have 15 years to pay on loan.
With the plan the interest rate will lower their payment to $1495...but does that really help much? Sooo...they refinance for 25 years and the payment comes down to a manageable $1200 per month.
Now they won't have their home paid off till they are 70 years old. Thereby damning any hopes of a retirement.

At first I'll just say that I don't like government involvement into any finances...

Now, I can't say that is all bad about his plan. One thing that is good is, those $300-$500 a month not going to house payment would be most likely spend elsewhere, meaning it's going back to economy. If million people refinance, that is quite a bit of money...

My 2c.

Well that seems to be what the government has in mind. However, when this program was first introduced a couple of years ago, it was originally suppose to help somewhere around 8 million homeowners but only around 800,000 or so folks took advantage of it/applied for it. They're hoping for better results this time. The problem is . . . if a good number of folks have lost income -- not necessarily their job but maybe their spouse did or they had to take a pay cut or something -- then how much of that 'saved monthly mortgage money' are they going to spend on things other than the basics?

 

[RDD_1210]

Wow...

Solid response. Which part confuses you? Forget it......obviously the whole thing did.

You definitely are what you seem.

If ever it was possible to get drunk on Kool Aid - you have done it.
You probably believe the Jobs bill is about creating jobs too.

Sloooowwwlllyyy...read this...take a deep breath...concentrate on the relevance of this statement...you can do it....Fannie Mae and Freddie Mac have received $170,000,000,000 in taxpayer bailouts in the past 36 months..ALONE.

Get it?

What does that have to do with this bill? Specifically.

 

[Old Rocks]

Here we go again. Why is Obama rolling out yet another soon-to-fail program to protect people from their own stupidity? I know the answer: the election is next year. But seriously. Will this guy ever get around to governing, like for real?
Obama to Announce New Program to Help Struggling Homeowners | ABC News - Yahoo! News
Note the requirements:

While administration officials say it will help thousands of homeowners, the program has its caveats. Only those homeowners whose mortgages are backed by Fannie Mae and Freddie Mac will be eligible for refinancing. They must have good credit and must have kept up with their mortgage payments, with no late payment in the past six months and no more than one late payment in the past 12 months. Additionally, the mortgage must have been sold to the agencies before May 31, 2009, and not been refinanced previously under the Home Affordable Refinance Program. The loan-to-value ratio has to be greater than 80 percent.

Now, if their mortgages are current with one late payment in the last 12 months, why in the hell do they need help to begin with? And since 80% of people enrolled in these programs end up foreclosed on anyway, why are we continuing to pour money into this?

Hmmm...... If Rabid is so opposed to it, this program must do something good for the average American Citizen.

 

[iamwhatiseem]

Solid response. Which part confuses you? Forget it......obviously the whole thing did.

You definitely are what you seem.

If ever it was possible to get drunk on Kool Aid - you have done it.
You probably believe the Jobs bill is about creating jobs too.

Sloooowwwlllyyy...read this...take a deep breath...concentrate on the relevance of this statement...you can do it....Fannie Mae and Freddie Mac have received $170,000,000,000 in taxpayer bailouts in the past 36 months..ALONE.

Get it?

What does that have to do with this bill? Specifically.

You are saying this isn't going to cost taxpayers any money....I am pointing to the fact that even in GOOD economic times and much higher interest rates F/F cost taxpayers $billions a year. Now that the sh*t hit the fan that they created - they are on average costing taxpayers $1 billion a W E E K.
Since this bill reduces interest on loans that are already low to begin with - as shown in the accompanying article - interest rates that because they are so low - will in less than a decade become unsustainable - meaning the cost of the banks to maintain the loans will be less than the interest revenue they take in....let me give you two guesses as to who will bail them out then. So in the long run, many homeowners will be making payments after they retire because many WILL extend the mortgage - guaranteed...the extreme low interest will cause F/F to lose more than they already are.

 

[McDowell's]

I hear ya but I don't drive a BMW or sip foo foo drinks. I've been in my house for quite some time and I wasn't part of this scam but many like me are feeling the crunch through no fault of their own.

What "crunch" are you feeling, exactly? You are making the same payment you made 5 years ago, assuming you have a mortgage at all. Your property taxes should have gone down in a re-assessment of the house's value. If you aren't putting your house on the market, so what if the value is lower? Your car loses value every day and I dont see the gov't rushing to bail out people from depreciating cars.

The crunch of our collapsed economy! My house isn't in this dog fight so to speak but I know others that are. Besides that isn't the point.

The housing market is holding the entire economy hostage. You free up a couple hundred dollars a month in home owners pockets and watch the buying power it gives. That's a direct infusion of blood into our half dead economy. Not to mention the added stability it gives to the housing market.

Forget for a fucking moment that Obama is president and look at the upside as contrasted to the risks. No tax payer money infused unless a home goes under. Which wouldn't matter because F & F are already on the hook. Remove some imbalance in the value of homes. The program is NOT MANDATORY. I'm not seeing the risks.

Again like I said in my topic. I don't give a rats ass how this makes Obama look if for once it can actually have an impact on the economy as a whole and not just one group of friends.

Show me where this is a risk to tax payers and ill bail on this ship. Concrete evidence, not I hate Obama so its bad.

First, there is nothing concrete in this proposal. So there is unlimited risk that in the final construction and implementation there will be cost to the tax payers. I don't give a good god damn if its fucking Obama, Bush, or Mr. Roger's - it's all the federal government and the federal government likes to spend money.

Second, a few people have already pointed out the BLATANT, OBVIOUS truth that in its current form this is involving Fannie/Freddie mortgages. Both agencies are currently borrowing money from the federal government to make their required dividend payments to the federal government for their bailouts by the tax payer. So reducing cash flow to those entities WILL cost the tax payer more money. It's a fact and has nothing to do with Obama or the Incredible Mr. Ed. If you want to ignore it and continually pretend like no one has mentioned that fact in this very thread, go ahead. That doesn't make you open minded - it makes you the exact opposite.

Third, this has a lot of potential to diminish the availability of credit. Again, there will be reduced cash flow to Fannie/Freddie which in turn will result in less available capital to acquire more loans which will in turn mean banks will be less willing to lend. So people who were completely out of the loop of the whole mortgage crisis have the potential of being hurt by this. Additionally, people who lost their homes and are back on their feet are going to face a tougher time finding financing to get back in the game.

You say people dislike this primarily because of their opposition to Obama, yet all I've really seen out of you in support is some obscene attempt to look high minded will ignoring the facts of the situation.