Fannie / Freddie Mortgage Principal Reduction Rumor...

[MotF Bane]

-snip-

Snipped all the irrelevances. Do you or do you not acknowledge that both parties are bad for this country, and there is no longer a "lesser evil"?

 

[IndyColtsFan]

I agree. I'm sorry, but if you signed your name on the contract, you should have to pay the loan off or file bankruptcy if you cannot. This bullshit about "my house is worth less than I paid for it....boooohooo".....well sorry. You bought it, you pay for it. I and may other paid for ours.

Well said!

 

[MotF Bane]

My condo is worth a little less than I owe but I make my payments on time every month (and even pay some in excess of the note) so I won't get any free government money????

Stop paying! It's the new way!

 

[IndyColtsFan]

I doubt they intended it to come across this way, but the message they are sending is that if enough people do something stupid, it becomes the smart thing to do.

No, I understand they don't mean for it to come across that way, but let's face it. Those of us who are responsible citizens who always pay our bills on time, have no debt, etc. are the ones being punished for the stupidity of others. People making $50K have no business buying $250K or $300K houses and if they did and are under water and get hit with a loan reset, guess what? It is their problem, not mine. How DARE the government prop them up and basically pay a portion of their principal in order to keep them in that house?

As I said in another post, those of us who are the ones paying the bills in America are geting fed up and we might just use the "if you can't beat them, join them" philosophy.

This whole "You must bail these guys out and pay this principal!" is bullshit. They can continue making the house payments, refinance, or frankly, declare bankruptcy and foreclose. I don't care. That's what we call a market correction. I know many in here quake in fear when they hear those words.

 

[IndyColtsFan]

Yep, you heard it here first folks, if Obummer doesn't get his way we'll see 50 percent unemployment, you should be his next press secretary techs.

And then when the money Obama borrows for this comes due, you can bet he will be here with the "Bu....Bu...Bu...Booooooosh!" excuses to defend him.

 

[rudder]

Now keep going with that. In the lifetimes of most people on this forum, no republican presidency has ever done anything other than increase debt. The only president that didn't run a deficit all 4 years was a democratic president.

The old stereotypes about spending should be tossed out the window. It doesn't matter what side of the line they're on, they're going to spend your money like a drunken sailor.

This should be in P&N... but in 1996 Clinton submitted 5 budgets to Congress. The Republic congress led by Newt Gingrich kept rejecting them because there was too much spending. The Republican controlled congress promised the American people they would balance the budget. Clinton didn't do shit.

That is the kind of congress we need again... not like the one that allowed Bush the increase the federal budget by the greatest percentage since WWII. And certainly not like the one we have had since 2007.

Principal reduction... damn... the second I hear that this is true I will stop paying my mortgage and get in on the action. Time to be irresponsible.

 

[JoeBleed]

I keep hoping something with the bailouts everyone else is getting they might eventually look there too.

No - the problem was too many idiots decided to not exercise financial responsibility and actually buy a house they could afford and not live paycheck to paycheck

I've been house shopping for about 3 years now in a small area. In my price range there just isn't much changing and becoming available.

To this day i STILL get people telling me that I'M STUPID for not spending more. I point out that if i spend over my max amount set that would put me living pay check to pay check. Most of them always respond with, thats what you have to do..... WTF!!!?

Like said a few times above. Those that act responsibly get shit on and piratically forced to help those too stupid to own a house.

Edit: oh, fuck long term welfare programs, fuck bail outs, and fuck the people that think some banks and bossiness failing will cause massive long term problems.

 

[PingSpike]

for the people who pay our mortgages on time, we get nothing. lol

That's not true man, our taxes probably go up so we get something. We also get angry and feel like idiots, so there's also that.

 

[Exterous]

To this day i STILL get people telling me that I'M STUPID for not spending more. I point out that if i spend over my max amount set that would put me living pay check to pay check. Most of them always respond with, thats what you have to do..... WTF!!!?

Like said a few times above. Those that act responsibly get shit on and piratically forced to help those too stupid to own a house.

We spent 66% of what the bank had approved us for becuase we knew this would let us live a comfortable life and save for when life threw us a shit storm. And guess what - it did. In the last two and a half years my wife was hospitalized with a pulmonary embolism, she lost her job tiwce and I lost mine once. Because we were financially responsible we didn't ever miss a house payment. We had a cushion in case something like this happened. If we were both unemployed we could survive 6 months on savings alone (no unemployment) another 1 year if I had to cash out my Roth IRA and two more years if we cash out our 401k (penalties included)


We scrape and save. We don't take lavish vacations and at one point we had one car over 230,000 miles and another over 100,000 miles. Why the hell do I have to pay for someone who bought a huge house, buys a new car every year?! I am sick and tired of hearing sob stories from people who didn't plan well for life. Shit happens! This is no suprise. Plan for it! Hell - if i am 27 and we can do this what excuse do all those people have who are 40 and have no savings??!!

 

[Exterous]

That's not true man, our taxes probably go up so we get something. We also get angry and feel like idiots, so there's also that.

We get to watch other people play with expesive toys/houses they bought but couldn't really afford so the government took our money to pay for them

 

[IndyColtsFan]

We scrape and save. We don't take lavish vacations and at one point we had one car over 230,000 miles and another over 100,000 miles. Why the hell do I have to pay for someone who bought a huge house, buys a new car every year?! I am sick and tired of hearing sob stories from people who didn't plan well for life. Shit happens! This is no suprise. Plan for it! Hell - if i am 27 and we can do this what excuse do all those people have who are 40 and have no savings??!!

My story is pretty similar. We spent about 50% of what the bank approved us for. We both drive cars that are paid off and we'll drive them until they fall apart (mine is a 2001 Grand Prix with 140K miles on it; hers is a 2004 Civic with like 50K on it). We carpool every day to work as well to save on gas and put mileage onto my car. Between my retirement and savings, I'm saving an amount equal to about 30% of my income every year and my wife just got a new job with a huge raise so her savings should go way up as well. The only thing we treat ourselves to is nice vacations but other than our honeymoon, we usually get good deals on those too.

It isn't hard to be responsible. The problem is that people want, want, want! How many times do you see people who seemingly have a new car every year? I had a friend that I used to work with that had to finally declare bankruptcy. He blamed it on his wife having to quit her job, but I can tell you, that was an excuse and their spending was so out of control that it would've happened eventually even if she remained employed. They went out and bought a 2007 Yukon Denali, a 2007 Miata, and a 2007 Ford Escape (this was a few years ago, when 2007 was the new model year) within a month. He bought himself and her EACH 2 or 3 new laptops, a desktop, and a Mac in this same year. Almost every day, he would come to work telling about his latest purchase. He probably spent $300 on every trip he took to Fry's and he went 2 to 3 times per month. New TVs, new home theater equipment, new toys -- all the time! He was also planning on buying himself a new motorcycle but had to declare before that happened. When he went to the lawyer for help, the lawyer ripped him a new one about his incredible lack of fiscal responsibility and made him feel really stupid. I loved it. 🙂

I do buy myself toys on occasion, but I always pay for them outright and don't charge them and I never buy them if they interfere with our savings goals or other priorities.

 

[Greenman]

If we have massive foreclosures?
First hundreds of banks will fail.
Second property values will fall so low almost no one would have any equity in their homes anymore.
Third massive unemployment. Think 10 percent is bad? Try 30-50 percent
Fourth massive tax increases on homeowners to pay for needed services
Fifth rampant crime as real hunger strikes tens of millions of Americans
At this point America is a second world country as we pretty much cut the military to about 10 percent of what it is as America begs other countries to loan it money.

That may be necessary. Far to many people believe that government intervention is the answer to every problem, and politicians are happy to spend any amount of my money necessary to try and solve the problems they created.
We can't spend our way out of debt, we can't replace jobs with programs and we can't continue to allow government growth. The system will collapse under it's own weight.

 

[IndyColtsFan]

That may be necessary. Far to many people believe that government intervention is the answer to every problem, and politicians are happy to spend any amount of my money necessary to try and solve the problems they created.
We can't spend our way out of debt, we can't replace jobs with programs and we can't continue to allow government growth. The system will collapse under it's own weight.

Exactly, it will be painful either way but you have to draw a line in the sand and if this helps teach these people responsibility, I'm all for it.

 

[cKGunslinger]

I won't lie - I think this may not be a great idea (and possibly a really bad one,) but I'll damn-sure be in line with my hand out if this happens.

We were fully prepared to bite the bullet and continue to pay off our small house that dropped ~40% in value over the last 3-4 years. We completely changed our long-term plans of selling our starter home and building on some acreage, but if we can jump back on that track with some help from the taxes I've given to this country, I'll take it - no matter how begrudgingly.

Oh, as this seems to be an ePeen thread, let me throw out that I'm driving a $12K bare-bones Mazda 3 and a 1997 Dodge with 180K miles, as well as paying extra principle on my mortgage to try and lower it even faster. Woo! Look at me living the irresponsible high-life!

 

[IndyColtsFan]

Oh, as this seems to be an ePeen thread, let me throw out that I'm driving a $12K bare-bones Mazda 3 and a 1997 Dodge with 180K miles, as well as paying extra principle on my mortgage to try and lower it even faster. Woo! Look at me living the irresponsible high-life!

If by ePeen you mean we're all seeing who wins the award as the cheapest bastard in the thread, you're right. 😉

 

[Exterous]

Oh, as this seems to be an ePeen thread, let me throw out that I'm driving a $12K bare-bones Mazda 3 and a 1997 Dodge with 180K miles, as well as paying extra principle on my mortgage to try and lower it even faster. Woo! Look at me living the irresponsible high-life!

Well I have an $11,999k Mazda 3 and a 1996 Dodge with 181k miles on it. This means I am a better person than you

 

[IndyColtsFan]

Well I have an $11,999k Mazda 3 and a 1996 Dodge with 181k miles on it. This means I am a better person than you

Oh yeah? I still technically own a 1996 Cavalier that probably has 200K miles on it by now. It also has some rust on the hood. Do I win? 🙂

 

[drum]

What a joke

 

[JoeBleed]

We spent 66% of what the bank had approved us for becuase we knew this would let us live a comfortable life and save for when life threw us a shit storm. ~snip~

Exactly what i want to avoid. Or rather plan for and hope doesn't happen.

As for the cars, my old car has 25x,xxx on it and the only reason i got rid of it was i was rearended and it wasn't worth paying for the body work to be done and the insurance company gave me a lot more than it was worth. But i trusted it to drive all over the country with out a problem.

My current car is 106,xxx miles on it, i hope to keep it till 600,xxx and beyond. but i like keeping things so its partly me. But if you maintain your car well, it should last a long time. Just because it has 100,xxx miles or more doesn't mean it isn't reliable. you may need to looking into a timing belt/chain replacement and continue doing regular maintenance. But it isn't bad really. If you car's schedule says it needs a timing belt or chain at x thousands of miles, do it before it breaks. And dealers aren't always a good place to take a car for work. but it really varies as you might imagen.

Edit: oh yea, the bank approved me for well over what i could possibly afford. And the banks wonder why they had problems....

 

[techs]

That may be necessary. Far to many people believe that government intervention is the answer to every problem, and politicians are happy to spend any amount of my money necessary to try and solve the problems they created.
We can't spend our way out of debt, we can't replace jobs with programs and we can't continue to allow government growth. The system will collapse under it's own weight.

Have you ever read about the Great Depression or read any informed opinion of its affect today?
Our modern society is built on a certain level of stability. Another Great Depression would do things like leave us with a generation of Americans with no retirement, no education, no infrastructure, etc. It would take a generation or two just to get back to where we were, if ever.

The best solutions to our problems is basically a little of everything. First, of course, you stabilize the current situation. Then you hold back increases in spending and let the economy grow larger which reduces spending as proportion of GDP. We did that in the 1990's with paygo (and we just re-instituted to take effect once the economy is stabilized). You increase taxes a bit too. The key is no radical one sided changes like huge tax increases, or huge spending decreases. Ones sided changes can lead to catastrophe, such as we find ourselves in. You also find grossly inefficient parts of the economy, like health care and defense spending, where you can reduce spending without a huge drop in their effectiveness.

The idea that we should let the economy just crash, is in my opinion, the absolute worst thing. First off, the problem is not the "system" which has worked remarkably well for 80 years. It is radical economic policies that started in the 1980's and exploded in 2000.

btw there is some real discussion in this thread, despite the occasional ideologue posts.

 

[Exterous]

It is radical economic policies that started in the 1980's and exploded in 2000.

I think a big cause is the sudden ability of the average American to get 'credit' and the lack of financial education being taught in schools. (I am not sure when the credit lending really exploded but I think it falls in the time frame you mention)

I am not sure if you include this idea in the radical economic policies but there was an explosion of buying power without education as to the long term benifits/risks of the system. It became more and more acceptable to carry debt balances for everyday items like food, gas, entertainment etc which led to a, IMO, financially irresponsible mindset we seem to have as a society today

I am still torn as to how much responsibility the banks should have in terms of what they are willing to lend. Obviously they went to far but I still feel the majority of the blame rests on the people who let others decide what was financially acceptable for them to spend

 

[IndyColtsFan]

btw there is some real discussion in this thread, despite the occasional ideologue posts.

We are not talking about "letting the economy crash." We are talking about drawing a line in the sand and saying "enough is enough -- time for people to learn that Uncle Sam won't bail them out for every poor decision." We're talking about this specific "rumored" principal reduction policy which may or may not happen.

Being "under water" on a loan does not, in any way whatsoever, necessitate a foreclosure. Where is the personal responsibility? These people signed the loan papers and they need to pay their payments without Uncle Sam having to bail them out. Providing a bail out will only 1) help the house flippers, who have no sympathy from me or most people or 2) delay the inevitable for the irresponsible. For the others who may not fit into these categories -- sorry, but that's life and you'll have to trudge through. As I said previously, my wife is likely under water on her condo but we're doing the right thing -- continuing payments until we can sell it. We may have to take a loss on the sale, but that's life.

Why are people buying houses they clearly can't afford? People's ignorance of how to handle their finances is not an excuse for them to bail on paying their debts, the same as ignorance of a law is not an excuse to avoid prosecution if you accidentally break a law. You might be able to partially blame the banks for approving such big loans, but in the end, the people see what their payment will be when they sign and it is just too damn bad if they're not smart enough to avoid something they can't afford. And if they were dumb enough to sign a loan which would reset in a few years without understanding all the implications, it is time for them to learn a lesson.

 

[IndyColtsFan]

I am still torn as to how much responsibility the banks should have in terms of what they are willing to lend. Obviously they went to far but I still feel the majority of the blame rests on the people who let others decide what was financially acceptable for them to spend

:thumbsup:

 

[ch33zw1z]

for the people who pay our mortgages on time, we get nothing. lol

tell me about it.

 

[alkemyst]

nope. paid enough down not to get that problem.

Not sure how much you put down, but you are blind to the problem. Some put 30, 40, 50% down and more and are still upside down.

I bought at the tail end of all the problems...nearly 2008. Still my home tanked more than $150k...the remaining value is about $110k currently.

I am in a modification, there was no principle reduction. However, I am down to a 2% rate that goes up 1% per year until the current rate at the time of my mod, 5.5%.

My rate was 6.875% previously so it's not like this bail out was like gaining a free home as many think these modifications do, nor did it screw up other sales.