Bill CLinton: Fixing the economy by forgiving underwater mortages?

[ProfJohn]

If they have a job and pay on time then they aren't part of the problem.

The problem is the people who have lost jobs and can't get out of the house they have owned or people who got screwed into loan terms they can't make.

 

[Engineer]

If they have a job and pay on time then they aren't part of the problem.

The problem is the people who have lost jobs and can't get out of the house they have owned or people who got screwed into loan terms they can't make.

A big part of the problem is people who CAN pay and won't because they have this feeling of "Why am I paying $500,000 for a home that is only worth $250,000" and they just quit paying and walk away. 100% straight up bullshit right there. Might be a smart business decision but to me and many others who honor our debt, it's outright bullshit.

Personal responsibility my ass....that's for the other guy.

 

[senseamp]

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

They can do it now.

 

[senseamp]

If they have a job and pay on time then they aren't part of the problem.

The problem is the people who have lost jobs and can't get out of the house they have owned or people who got screwed into loan terms they can't make.

They can get out of the house and turn in the keys at any time. The only collateral for the loan is the house.

 

[ProfJohn]

One solution might be a law that extends the time one is behind before they can foreclose on a house.

Require someone to be a year behind before they can foreclose on the house that way people have more time to come up with solutions etc etc.

In the big scheme it shouldn't hurt banks that much since a year worth of payments is less than 10% of the value of the house and when you foreclose the bank is going to lose more money than that.

 

[ProfJohn]

They can get out of the house and turn in the keys at any time. The only collateral for the loan is the house.

But there are long term issues with just walking away.

And my point was more about people who are laid off and want to move, but can't.

 

[ProfJohn]

A big part of the problem is people who CAN pay and won't because they have this feeling of "Why am I paying $500,000 for a home that is only worth $250,000" and they just quit paying and walk away. 100% straight up bullshit right there. Might be a smart business decision but to me and many others who honor our debt, it's outright bullshit.

Personal responsibility my ass....that's for the other guy.

I agree completely.

But you can't stop that.

But you can help the people who are effected by the slow down and loss of jobs and those are the people who need the help the most and who are often suffering due to no fault of their own.

 

[Doppel]

A big part of the problem is people who CAN pay and won't because they have this feeling of "Why am I paying $500,000 for a home that is only worth $250,000" and they just quit paying and walk away. 100% straight up bullshit right there. Might be a smart business decision but to me and many others who honor our debt, it's outright bullshit.

Personal responsibility my ass....that's for the other guy.

That's part of the game. If the bank gave you $500k to buy a house that shouldn't have been worth that somebody has to eat it, so it's either you or the bank, right? You both screwed up. Both of you should exercise your rights as dictated by legal, extensive contracts. And if those say you can walk away and the main hit is your credit you probably should. The banks acted fraudulently in compelling the housing bubble to grow so expecting a typical family to honor it simply based on, well, honor is not realistic. The banks are probably using what you pay them to pay lobbyists to fvck you anyway, so who cares

And no I've not strategically defaulted. I would if I were in an insane market quite possibly but I was lucky enough not to get caught up in it. My responsibility is not to any bank. It's to my family and to the law only. If the law says I can give the bank the middle finger and make them eat the $150k I'd do it. Just like they'd have no problem having me pay mortgage on a $400k house that's only worth $250k. A few years ago I didn't think this way about it.

Require someone to be a year behind before they can foreclose on the house that way people have more time to come up with solutions etc etc.

Average foreclosure time is that long now anyway if not longer I think (certainly it isn't much shorter). Nobody that far behind will ever, ever catch up anyway.

 

[Ausm]

I agree completely.

But you can't stop that.

But you can help the people who are effected by the slow down and loss of jobs and those are the people who need the help the most and who are often suffering due to no fault of their own.

I think someone hacked into PJ's account

 

[Ausm]

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.

No but I am checking into it.

 

[ProfJohn]

I think someone hacked into PJ's account

I am all for helping people who need temporary help.

The problem with our society is that we offer too much long term help to people who can help themselves.

 

[Engineer]

That's part of the game. If the bank gave you $500k to buy a house that shouldn't have been worth that somebody has to eat it, so it's either you or the bank, right? You both screwed up.

If the bank gave the loan when the house wasn't worth as much, sure. But at the time, the sales going on made the homes worth that much because people were WILLING to pay that much for them.

If you walk away from a loan that you WILLINGLY took and CAN PAY for it, you're an asshole, business decision or not. I would love for people who do this to get a "special ding" on their credit for it that would last for a decade (or more) but that's not going to happen.

Pay your damn bills.....you took them out so pay them.

 

[JSt0rm]

I don't agree. Those banks would walk away in the same situation. I think writing people's debts down to some number like 10% higher then value would keep people there as the house would grow into that. A 250k home isn't going to hit 500k for a long time and no sane person would fork over that money.

I rent btw

 

[OutHouse]

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.

between the banks, builders and lawmakers the consumer go fucked.

 

[OutHouse]

A big part of the problem is people who CAN pay and won't because they have this feeling of "Why am I paying $500,000 for a home that is only worth $250,000" and they just quit paying and walk away. 100% straight up bullshit right there. Might be a smart business decision but to me and many others who honor our debt, it's outright bullshit.

Personal responsibility my ass....that's for the other guy.

that has no meaning anymore, especially from our government

 

[dank69]

They can do it now.

It is damn near impossible to get a bank to approve a short sale.

 

[SparkyJJO]

More Bill Clinton stupidity. How surprising.

We need more stupid bailouts like we need a hole in the head.

 

[classy]

John McCain actually suggested something similar to this in 2008 when he said he would buy up all the bad mortages. Then we all laughed at the notion, but now?

 

[Jaskalas]

You destroy the banks and you destroy the economy.

Forest fires are a healthy part of life with many benefits. Out with the old, in with the new. The banks needed to fail for what they did.

 

[JSt0rm]

Forest fires are a healthy part of life with many benefits. Out with the old, in with the new. The banks needed to fail for what they did.

Yeah no shit. Now the banks think they are entitled to profits. fucking punks.

 

[tm37]

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.

You are trying to use facts when people just want to bash the evil Wall Street Banker who forces Joe the plumber to take a 120% equity line of credit to buy a new boat.

The fact is I think that if there should be programs to refinance and perhaps reduce the rate IF the owner can show a willingness and ability to pay. One of the main issues is you need to be in dire straits to use the current program and the banks are making 5-6 points on a 8% loan. If you have a job and are in an ARM then you are screwed if you can make the payment and people that can pay are walking away.

 

[Lithium381]

bullshit, i pay my mortgage month in and month out...... do NOT forgive the debt, just be more lenient with the payments...... FFS why do i even bother being responsible when in the end i'm the chump for making payments

 

[WackyDan]

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?

Holy shit. Investment 101 called, they want you back in class.

I'd say if they bought their house 14 years ago and it is now worth less, they made a very bad decision. I can see if they bought at the height of the bubble before the crash say in 2006/2007, but if they bought ten+ years ago and are below water then the scenario is that they cashed in on the home equity to remodel, buy the new SUV, Boat, or vacation home.

Houses are investments. For some they are long term, and for others, short term. There is nothing wrong with either mentality. When I bought our house in 2004, I bought well under market value, a fixer upper, and knew the risks of the investment. I bought a house we could afford on one salary, and didn't throw money at it to immediate fix all the issues with it. I didn't go out and buy all sorts of furniture on credit, etc...

Math must be hard for many. They bought way too much house, abused the rising equity, and somehow they are surprised to find themselves living paycheck to paycheck when their pink slip comes from their employer. Dumb.

 

[OutHouse]

I'd say if they bought their house 14 years ago and it is now worth less, they made a very bad decision

Is your house worth more or less than when you bought it in 2004?

humm, the thing is i have talked to my co-workers and neighbors, friends and so on about this and everybody i have spoken to has said their house is worth less now than 10-14 years ago.

 

[senseamp]

But there are long term issues with just walking away.

And my point was more about people who are laid off and want to move, but can't.

There should be long term issues for taking out a loan and not paying it.
The long term issue is that you can't get a loan for a while. GOOD. If you can't pay off your loans, you shouldn't get one for a while.
And they can move by walking away from the house.