Bill CLinton: Fixing the economy by forgiving underwater mortages?

[JEDI]

http://finance.fortune.cnn.com/2011/10/07/bill-clinton-economy-interview/?hpt=hp_bn3

"people whose homes are worth less than the mortgages that you can write down your mortgages to the value of your home "


What does 'write down your mortgages ' mean?

if it means forgiving that amount (and the tax payer eats it), then NOOOOOOOOOOOO!

 

[her209]

What does 'write down your mortgages ' mean?

if it means forgiving that amount (and the tax payer eats it), then NOOOOOOOOOOOO!

Hint: The taxpayers already ate it when the federal government gave money to the banks to modify mortgages. The banks kept the money and didn't do shit to help the homeowners.

 

[EagleKeeper]

Unless the payments themselves are adjusted, it does nothing

 

[dank69]

Unless the payments themselves are adjusted, it does nothing

It would allow people to sell their houses for what they are worth now instead of what they were worth in 2005.

 

[brencat]

What does 'write down your mortgages ' mean?

if it means forgiving that amount (and the tax payer eats it), then NOOOOOOOOOOOO!

Yes, it means the bank would have to write off the difference between fair value and the mortgage amount.

To which I say "Fuck that!"

You bought it, you own it. And if you can't pay, the house gets foreclosed and sold in an auction for 30 cents on the dollar. Will that hurt me if that auctioned house is on my block ? Probably. But I don't care. I would rather suffer another 20-30% decline in the housing market than establish the moral hazzard of people thinking they can get away with less responsibility.

Does anyone realize everything the Fed and the govt is trying to do is primarily to prevent people having to take a loss? And I don't mean the poor bastard who's going to go bankrupt for being stupid. The money printing and suspension of mark to market rules, etc, is mostly trying to protect lenders and investors.

Seriously, enough with the bailouts! Let them take the fvcking loss, let's get on with the depression already, so the true HEALING can begin. Or it's only going to be that much harder when it all blows up later anyway. It is unavoidable, that's what these guys don't yet understand.

 

[jstern01]

Yes, it means the bank would have to write off the difference between fair value and the mortgage amount.

To which I say "Fuck that!"

You bought it, you own it. And if you can't pay, the house gets foreclosed and sold in an auction for 30 cents on the dollar. Will that hurt me if that auctioned house is on my block ? Probably. But I don't care. I would rather suffer another 20-30% decline in the housing market than establish the moral hazzard of people thinking they can get away with less responsibility.

Does anyone realize everything the Fed and the govt is trying to do is primarily to prevent people having to take a loss? And I don't mean the poor bastard who's going to go bankrupt for being stupid. The money printing and suspension of mark to market rules, etc, is mostly trying to protect lenders and investors.

Seriously, enough with the bailouts! Let them take the fvcking loss, let's get on with the depression already, so the true HEALING can begin. Or it's only going to be that much harder when it all blows up later anyway. It is unavoidable, that's what these guys don't yet understand.

You really don't understand economics do you?

What about the tens of millions of homeowners who did not play the refinance game and are now upside down for tens of thousands or more?

Why do the banks get a free ride and bailouts, yet the average joe who has lost his job or faces cut backs and pay cuts and can not afford their home mortgage, through no fault of their own suffer at the hands of these same leeches?

Its people like you, Cain and Santorium who need a cup of STFU, and a boot in your butt.

Your lack of compassion for your fellow American is so touching.

 

[brencat]

You really don't understand economics do you?

What about the tens of millions of homeowners who did not play the refinance game and are now upside down for tens of thousands or more?

Why do the banks get a free ride and bailouts, yet the average joe who has lost his job or faces cut backs and pay cuts and can not afford their home mortgage, through no fault of their own suffer at the hands of these same leeches?

Its people like you, Cain and Santorium who need a cup of STFU, and a boot in your butt.

Your lack of compassion for your fellow American is so touching.

Of course I feed bad for people who were paying their mortgage just fine and are now struggling because they are out of a job. In fact I was out of work for much of 2008 but had savings to fall back on.

Did we EVER in the past going back 50+ years give banks bailouts, suspend mark to market rules, print massive sums of money, and run up this kind of national debt, all in a futile attempt to avoid the unavoidable?

Where does this end? How much money are you prepared to put up or have the govt put up to bail out your fellow man to avoid suffering? You say I lack compassion but in fact I'd argue what you and others thinking like you possess is misguided compassion. Life is tough and everyone is expected to run in their own lane and persevere.

 

[Jaskalas]

We should have disallowed foreclosures from the very beginning, and given all homes to the home owner, the person living there. That would have destroyed the banks, but allowed us to save the American people.

We can still try it, but I fear it's far too late, too many have been removed from homes already.

You want to save our people in this crisis? Keep them in their homes.

 

[jstern01]

Of course I feed bad for people who were paying their mortgage just fine and are now struggling because they are out of a job. In fact I was out of work for much of 2008 but had savings to fall back on.

Did we EVER in the past going back 50+ years give banks bailouts, suspend mark to market rules, print massive sums of money, and run up this kind of national debt, all in a futile attempt to avoid the unavoidable?

Where does this end? How much money are you prepared to put up or have the govt put up to bail out your fellow man to avoid suffering? You say I lack compassion but in fact I'd argue what you and others thinking like you possess is misguided compassion. Life is tough and everyone is expected to run in their own lane and persevere.

Yes we did in the 1930's it was during what we commonly called the Great Depression and guess what. The gov't created an agency that helped many who faced foreclosure to refinance their mortgages, of course making the banks eat the difference (http://books.google.com/books?id=jJ...onepage&q="Homeowners Refinancing Act&f=false)

 

[Doppel]

Actually they should probably be foreclosed so that those "late to the game" are not screwed out of a house they otherwise could afford if the market properly stabilized prices. Many are severely underwater and should lose their home. Yeah it sucks for them but it sucks for others who cannot buy a house at a reasonable price (3X earnings) because all these other people are stuck in upside down homes being kept off the market.

 

[ConstipatedVigilante]

We should have disallowed foreclosures from the very beginning, and given all homes to the home owner, the person living there. That would have destroyed the banks, but allowed us to save the American people.

We can still try it, but I fear it's far too late, too many have been removed from homes already.

You want to save our people in this crisis? Keep them in their homes.

...Except they are not "their" homes...

 

[Engineer]

You bought it...you pay for it. Sorry, life doesn't always come along on a silver platter. Every Tom, Dick and Harry were buying houses with zero down on interest only mortgages "just knowing" that they were going to flip the house just a year later for fantastic returns. I bought my house to live in. If I could not have paid the mortgage, I would have lost it.

I worked my ass off and paid mine off early (6 years and 8 months on a 30 year mortgage that was 7% APR at the time). I feel bad for anyone losing their house but they bought the house and should pay for it. It should not have been looked upon as an investment but as a place to live. My 2 cents on that subject.

With that said, it would be nice for people to be able to refinance underwater mortgages to get a needed break. They are already on the books for money to the bank, not sure why it's so difficult to let the same bank give them the lower rates to keep them above water and paying on the house.

It would be a slap in my face if not only did I work and pay my mortgage off but the government use my (tax) money to pay down mortgages of others just after using my (tax) money to bail out the banks. Talk about a big ole kick in the nuts.

Edit: If the banks will lower the debt on their own good will (good luck with that) and using no tax money, great. More power to the home owners in that case.

 

[Zebo]

I've been saying this since it started. Search zebo and restructure

http://www.youtube.com/watch?v=wvOlDlYlOIU

The feds and benny the B could have solved this crisis years ago just by restructuring the mortgage debt. There are a number of ways such as refinancing the debt at 1%, which is still 4X higher than the rate being charged Wall Street Banks for thier debt....or even taking those bailouts and issuing vouchers for consumers to bailout the banks.

Of course after this reset youd need old fashioned (read worked) lending laws.

 

[Ausm]

Hint: The taxpayers already ate it when the federal government gave money to the banks to modify mortgages. The banks kept the money and didn't do shit to help the homeowners.

DING DING DING Because the idiots in Congress thought the banks would do the right thing instead of putting it in black in white in the Legislation.

 

[brencat]

You bought it...you pay for it. Sorry, life doesn't always come along on a silver platter. Every Tom, Dick and Harry were buying houses with zero down on interest only mortgages "just knowing" that they were going to flip the house just a year later for fantastic returns. I bought my house to live in. If I could not have paid the mortgage, I would have lost it.

I worked my ass off and paid mine off early (6 years and 8 months on a 30 year mortgage that was 7% APR at the time). I feel bad for anyone losing their house but they bought the house and should pay for it. It should not have been looked upon as an investment but as a place to live. My 2 cents on that subject.

It would be a slap in my face if not only did I work and pay my mortgage off but the government use my (tax) money to pay down mortgages of others just after using my (tax) money to bail out the banks. Talk about a big ole kick in the nuts.

Exactly! Well put sir. Key points bolded for emphasis...

 

[Ausm]

You bought it...you pay for it. Sorry, life doesn't always come along on a silver platter. Every Tom, Dick and Harry were buying houses with zero down on interest only mortgages "just knowing" that they were going to flip the house just a year later for fantastic returns. I bought my house to live in. If I could not have paid the mortgage, I would have lost it.

I worked my ass off and paid mine off early (6 years and 8 months on a 30 year mortgage that was 7% APR at the time). I feel bad for anyone losing their house but they bought the house and should pay for it. It should not have been looked upon as an investment but as a place to live. My 2 cents on that subject.

With that said, it would be nice for people to be able to refinance underwater mortgages to get a needed break. They are already on the books for money to the bank, not sure why it's so difficult to let the same bank give them the lower rates to keep them above water and paying on the house.

It would be a slap in my face if not only did I work and pay my mortgage off but the government use my (tax) money to pay down mortgages of others just after using my (tax) money to bail out the banks. Talk about a big ole kick in the nuts.

Edit: If the banks will lower the debt on their own good will (good luck with that) and using no tax money, great. More power to the home owners in that case.

I agree wholly on what you have posted but on the other side of the coin shouldn't the other perpetrators of this Financial disaster have to pay also...I.E.Big Banks,inept Politicians and Predatory lenders.

It's almost like letting a serial killer off with a slap on the wrist.

I think this is the main crux of Occupy Wall Street.

 

[Jaskalas]

...Except they are not "their" homes...

How useful will they be, if left empty to sit and rot for 10 years? No one to upkeep them, no one to secure them from vandals.

What of the people forced out with nowhere to go, think that's good for the economy? It isn't. We're making purposeful choices here to make things worse. To ruin lives.

It doesn't have to be that way.

 

[ProfJohn]

We should have disallowed foreclosures from the very beginning, and given all homes to the home owner, the person living there. That would have destroyed the banks, but allowed us to save the American people.

You destroy the banks and you destroy the economy.

Where does new business owner go to get a loan so he can expand or start a business?

Want to open a gas station? Hope you have the money to build one from scratch because no one will be able to loan you the money to build one etc etc.

 

[brencat]

What of the people forced out with nowhere to go, think that's good for the economy? It isn't. We're making purposeful choices here to make things worse. To ruin lives.

It doesn't have to be that way.

No, what we're doing is honoring the rules of fairness and common sense. How is it fair to me if I've paid my mortgage in full per the legal terms of my contract while my neighbor who was reckless or unlucky gets bailed out? Seriously dude...misguided compassion FTL. Life sucks sometimes.

 

[brencat]

I think this is the main crux of Occupy Wall Street.

Have you seen the 'list of demands' from these assclowns? It reads like an anarchist playbook. Forgive all debt, free college education, $20/hr living wage, etc. WTF!

A bad joke and total fail. These people need to get their ass out of that park and start putting some effort into being creative and getting a job.

 

[ProfJohn]

Fixing underwater mortgages makes no sense because the economy will eventually come around and in 5-10 years the house will no longer be underwater.

A better plan would be:
1. Develop a plan to help people who got screwed via bad loan terms such as ARMs and no interest loans and now they are stuck not being able to make payments. Expand modification programs or allow them to stay at their original payment for a longer period before having to sell the house.

2. Develop a plan to help unemployed people keep their current houses by expanding unemployment assistant programs. aka live in the house free or at reduced payment for 1-2 years and then have that money put back into the mortgage when you get back to work.

Average unemployment period now is 40 weeks. By time you hit that point the house is gone. So we are in a negative feed back loop.

Cheap houses flood the market -> this causes construction slow downs as fewer new houses are built -> this causes higher unemployment due to less economic activity -> this causes layoffs and high unemployment -> this causes people to lose their houses -> cheap houses flood the market

 

[ProfJohn]

These people need to get their ass out of that park and start putting some effort into being creative and getting a job.

There are no jobs to get right now. The country isn't creating enough jobs to keep up with population growth at this time which means if you don't have a job you are screwed.

That is probably the biggest reason for foreclosures right now and until the employment problem is fixed you can't fix the foreclosure problem.

We need to develop plans to help people who are unemployed survive long enough to get a job and start producing again. Plus kicking people out of homes just extends our economic problems as I pointing out in my last post.


BTW the Occupy people are idiots, but proclaiming "get a job" doesn't really work with 10% unemployment.

 

[Thump553]

Hint: The taxpayers already ate it when the federal government gave money to the banks to modify mortgages. The banks kept the money and didn't do shit to help the homeowners.

That's not the way that program works. The government pays nothing unless the loan is restructured, and most of the time, only if there is a default & foreclosure after the restructure.

You are confusing the Wall Street bailout with the mortgage programs.

 

[OutHouse]

No, what we're doing is honoring the rules of fairness and common sense. How is it fair to me if I've paid my mortgage in full per the legal terms of my contract while my neighbor who was reckless or unlucky gets bailed out? Seriously dude...misguided compassion FTL. Life sucks sometimes.

please explain to me how a person who bought a house 14 years ago during the prime of the mortgage bubble when all house prices were inflated is reckless because the housing bubble popped and now their home is worth less than what the mortgage is? how is it their fault? Keep in mind they still have a job, still pay their note on time. how is that irresponsible and reckless?

 

[Patranus]

please explain to me how a person who bought a house 14 years ago during the prime of the mortgage bubble when all house prices were inflated is reckless because the housing bubble popped and now their home is worth less than what the mortgage is? how is it their fault? Keep in mind they still have a job, still pay their note on time. how is that irresponsible and reckless?

How is that the banks fault?

So what if the house is worth less than the mortgage. If you can still pay for it then you should still pay for it.