How to fix the Mortage problem with no tax payer Money

[WackyDan]

Anything that artificially props up home prices only delays the pain and prolongs the time to full recovery.

I'm all for people that were victims of Known predatory lenders. Those that took no interest or interest only loans in order to keep up with the jones or because their eyes were bigger than their wallets can suck it up and walk away from their homes.

I was responsible in buying well within my means. I pay extra every month to pay the home off faster. Yes, my reward is a good credit score and a roof over my head.

For those that advocate a bailout of homeowners as a way to ensure that responsible home owners maintain their own home values, etc.... Think again. Real estate is LOCAL. My home hasn't decreased in value at all. I'm a responsible home owner - meaning I'm also not about to sell or buy another dwelling if it doesn't make sense during these economic times. Finally... I just might scoop up a foreclosure or two if the timing and price is right.

Let the market adjust naturally, as it should, and things will get back to normal far sooner than later.

 

[heyheybooboo]

Originally posted by: LegendKiller

Originally posted by: heyheybooboo
^^^^^
I don't want to enter the fray but the effective US corporate tax rate is something like 17-18%. Two-thirds don't pay taxes (I'm assuming these are all s-corps).

The only reason I jumped in here is that Bloomberg has an article today that says US banks have around $1.5tril in capital and overall losses approaching $3.5tril. Kinda crimps the OPs idea of locking interest rates.

The issue I have (and I'm sure many others) whatever the ultimate solution there will be an inordinate amount of crooks who make out like uber-bandits in this one ...

The $3.5tr in losses against 1.54tr in capital is a silly amount. The default rate simply doesn't work out, especially on a net basis, when comparing those losses to all of the assets originated in the last 5 years. Even at 20TR in assets, that'd be a 17.5% default rate on a net basis. I call bullshit on that.

That doesn't even take into account future revenues to offset the losses, nor current loan-loss reserves. Additionally, the losses projected are against ALL assets but only comparing to what the banks have in capital. Much of the assets he projects with 17.5% losses aren't even held by the banks.

The point I was incapable of making (did you not absorb it through osmosis? ) is that locking the rate thereby reducing the flow of capital during an extended liquidity crisis AS overall losses accumulate would not be my first choice in a survival plan.

I agree it's a 'snapshot' of questionable value but short of digging through a mountain of Fed data it would be interesting to chart with various cross-tabs and additional data of your own choosing so we gain insight as to future tipping points to avoid.

The best we can hope for in 2009 is a somewhat definitive explanation of how we got to this point in time and a general idea of how to pull ourselves out (and the least-intrusive regulatory system to prevent a future re-occurrence). From my warped sense from the summer of 2007 forward our 'management' has been an epic fail (or who knows? maybe a success that in five years we'll canonize these guys).

Like Ned Flanders was canonized on The Simpsons - LOL

 

[Bateluer]

Solid financial management curriculums starting in High School, possibly late Junior High, start teaching people how to manage their money effectively, to make and keep to a budget, to wisely invest, etc. It boggles my mind how people my age cannot know how to even make a rudimentary budget.

I kid you not, they bleed money on impulse items, fast food, and DVDs all month and they scratch their heads when they find they can't pay the rent. Poor fiscal management gets people into trouble all the time.