More Government Housing Shenanigans

[her209]

I can only assume that your post is in jest, otherwise my head will probably explode.

You mean it hasn't already?

:hmm:

 

[dmcowen674]

I saw a billboard advertising MakingHomeAffordable.gov and decided to see how my money was being given to irresponsible homeowners this time. There are too many programs to list here, but here are a few that I find particularly endearing:

So, to qualify for this program, you must have bought a house which is far too expensive for you (>31% of your income for payments), must owe more than your home is worth, and must be behind in payments. Those all sound like behaviors that government should be rewarding.

If you can't be bothered to pay off your house, but don't want to deal with the stigma of foreclosure, the government (read: the rest of us) will actually pay for you to move somewhere else and clean up your mess for you.

I like this one because my wife and I would qualify if I made 2% less last year... and didn't pay my mortgage for a few months. Since I make more than the threshold value and pay my bills, I simply get the pleasure of paying for someone else's mortgage.

This is the heart of big-government insanity: rewarding people for negative behaviors. If I want to buy a new house after saving for years, I have to pay more because people who aren't saving get assistance from HUD/FHA, and now I will be the only fool on the block paying the full amount the house costs because the requirement to get government help is simply not paying your bill and buying too much house.

Good, hopefully you pay so much that you want out of here since you hate the country so much.

 

[werepossum]

How much do I pay in taxes? Do you have any idea? I can't lose hundreds of thousands off the value of my home because I bought a home at its real value to me within my budget. The sale of said home has been held up for two months because of FHA shenanigans, during which time we can't accept offers from other buyers because we're under contract. The house I'm currently buying on the other end can lose 80% of its value and I'd be ok with that because I can easily afford the payments. The other 20% would be a loss of down payment because I'm actually qualified to buy the place.

Baseless personal attacks aside, maybe you could read the actual program website to get real information rather than simply calling real facts a "whine" when it disagrees with your half-hearted anecdote. The problems in the housing market are created by government manipulation of the market, forcing loans to people who would not otherwise qualify. Meanwhile, I rented a hellhole apartment to save up for a down payment of a cheap condo while paying taxes to subsidize the people buying without one. Now, the government is bailing these people out of the houses they couldn't afford, sticking the responsible few among us with the bill in two ways:
1. Paying taxes for the government subsidy, and
2. Paying more than market value for houses because demand is inflated by government meddling.

Man, with behavior like that you're never gonna get free government money!

I too hate the idea of paying for someone's much nicer house simply because I bought something I could easily afford. I'm not sure how many people really benefit though. I had a neighbor who had to sell her house; she had refinanced several times to pull out cash, went through a divorce, blown much of the refi cash on gambling trips, hadn't made a house payment for a year, and wound up owing almost as much as the house was worth even though they bought the same price house six months after I bought and mine was paid off. She qualified for an earlier program, but the forgiven mortgage amount was only going to drop her $1,100 primary mortgage payment around $20 a month. What the bank was pushing was a refi into a separate program that provided "government protection" for her home - which boiled down to the federal government assuming responsibility for the loan so that if the bank popped it or had to do a short sale, the taxpayers would pay the bank the difference.

So while I don't want to pay for these people's McMansions, I doubt they are the only party in the program looking to pocket some tax receipts.

 

[drebo]

I'm talking about the homeowners who bought way before the bubble started. They saw their home values double and triple from their purchase price due to the government and banks encouraging anyone with a heartbeat to buy a home. Where were these people screaming "Please make my house value stop going up!" The only people who were complaining about the ridiculous home prices were the people were waiting like you and me.

Those people have nothing to worry about...unless they banked on their house never going down in value and taking way too much out in equity loans and refis. In which case, they're stupid and absolutely should have to pay back everything they borrowed.

The fact that houses are now closer to being worth market sustainable rates doesn't change the fact that Joe Blow took a home equity loan of $100k to buy that RV or that Jane Dumbass took $30k out to go to Europe for a month.

Additionally, shame on people for treating the house they live in as an investment. It's not. It was never meant to be. It's an asset. Only an idiot expects an asset to increase in value 100% of the time.

 

[Argo]

Good, hopefully you pay so much that you want out of here since you hate the country so much.

What's up with you and the "leave this country crap". You sound like a loser that quits the basketball game as soon as his team goes down by 5 points.

 

[Jhhnn]

I'm hardly jealous of the people who are getting assistance from these programs. I'm simply pissed that money is going from my pocket to the pocket of someone else simply because I acted responsibly and they did not.

Seems like jealousy to me.

As I've offered, many of the people affected made what appeared to be reasonable choices at the time, choices validated by the authority figures they trusted, validated by the mortgage companies that sold 'em the mortgage. Even people who scrimped, saved & bought conservatively like you have been wiped out in this debacle. None of this will save people who were extremely foolish & are in way over their heads, anyway, so there's no point in raving about them.

And it's not the govt distorting the market that caused this at all. In the postwar period, pre-Reagan, nothing like this happened when the regulatory constraints of the New Deal were in place. When the Reagan admin tinkered with it, we got the S&L collapse & bailout. When Repubs finally drove a stake through the heart of Glass Steagall as part of a budget deal during the Clinton years, it set the stage for the Bush Admin to blithely allow the greatest looting spree in the history of finance, then create a bailout plan to save the system they created with ideological blindness & greed.

Righties think they just love free market capitalism, until it works itself up to the point where it demands bailout or it'll collapse. And then, well then, it's the government's fault for not letting it collapse, right?

Or do you think it should only collapse partway, so you'll benefit, still show a profit on your condo while buying low on a bigger place? That's not how it works. You're probably lucky that the govt is interfering, otherwise you'd be so far underwater on the condo that moving up would be out of the question.

 

[HendrixFan]

So these people are below-average intelligence and are therefore free from any personal responsibility for their actions? What happened to "let the buyer beware?" If these people buy a lemon from a used car dealer, are we going to bail them out? The problem is that these people wanted huge houses that they clearly couldn't afford. Banks were stupid for giving it to them - no one has disputed that, nor do I agree with the policy of bailing out the banks for their own failures - but that does not alleviate the fault of the buyers who took the loans. Two wrongs doesn't make a right, and it takes two to tango. Did I miss any cliches that clearly address your concerns?

Banks were engaging in illegal activity to get them into the homes, not just immoral.

Illegal.

 

[CycloWizard]

Seems like jealousy to me.

Yes, just like I'm jealous of bank robbers who rob a bank and get my money.

As I've offered, many of the people affected made what appeared to be reasonable choices at the time, choices validated by the authority figures they trusted, validated by the mortgage companies that sold 'em the mortgage. Even people who scrimped, saved & bought conservatively like you have been wiped out in this debacle. None of this will save people who were extremely foolish & are in way over their heads, anyway, so there's no point in raving about them.

The requirements for these programs are as follows:
1. you owe more than your house is worth
2. you haven't been making your payments

#1 is only a problem if you didn't make a down payment (only allowed by government regulation), if your property value dropped by over 20%, and/or you were only paying interest on your loan. Even if your home value dropped by 20% after you made your down payment, you should still be able to afford payment on your loans unless you also fell in to #2. This leaves only the people whose homes lost 20% and need to move a substantial distance for work, in which case one can often negotiate a relocation package with the future employer.

If #2, then you bought too much house and/or chose the wrong kind of loan. Most people would choose the wrong kind of loan in order to buy more house than they could really afford. Choosing an ARM to get a marginally lower short-term interest rate to keep your monthly payments below your "budget" is a decision to take a risk that your payments will go up with time (indeed, in this case, it was virtually guaranteed that they would since the prime rate was virtually zero).

And it's not the govt distorting the market that caused this at all. In the postwar period, pre-Reagan, nothing like this happened when the regulatory constraints of the New Deal were in place. When the Reagan admin tinkered with it, we got the S&L collapse & bailout. When Repubs finally drove a stake through the heart of Glass Steagall as part of a budget deal during the Clinton years, it set the stage for the Bush Admin to blithely allow the greatest looting spree in the history of finance, then create a bailout plan to save the system they created with ideological blindness & greed.

Righties think they just love free market capitalism, until it works itself up to the point where it demands bailout or it'll collapse. And then, well then, it's the government's fault for not letting it collapse, right?

Or do you think it should only collapse partway, so you'll benefit, still show a profit on your condo while buying low on a bigger place? That's not how it works. You're probably lucky that the govt is interfering, otherwise you'd be so far underwater on the condo that moving up would be out of the question.

It should collapse back to equilibrium. If government took its borrowed money out of the puzzle, all house prices would decline back to what they should be, thereby making housing more affordable for everyone. Short-term pain for everyone in the game now, but it would alleviate permanent issues which have already manifested because of all of this meddling.

 

[CycloWizard]

Banks were engaging in illegal activity to get them into the homes, not just immoral.

Illegal.

Then throw their asses in jail - I won't shed a tear. The victims of illegal activity could also sue for damages. Again, the problem reduces to the same problem as before: government dicking around rather than doing its job. Who is at the head of law enforcement in this country? Obama. Instead of punishing these douchebags, he's trying to do congress' job by working on the budget. Very few people in the federal government do their jobs, from the random supervisor at your local VA who spends 98% of her time talking to her managees all the way to the top. This "MHA" BS simply adds another layer of shenanigans, putting "counselors" on the phone 24/7 to help give my money to people who don't deserve it.

 

[HendrixFan]

Then throw their asses in jail - I won't shed a tear. The victims of illegal activity could also sue for damages. Again, the problem reduces to the same problem as before: government dicking around rather than doing its job. Who is at the head of law enforcement in this country? Obama. Instead of punishing these douchebags, he's trying to do congress' job by working on the budget. Very few people in the federal government do their jobs, from the random supervisor at your local VA who spends 98% of her time talking to her managees all the way to the top. This "MHA" BS simply adds another layer of shenanigans, putting "counselors" on the phone 24/7 to help give my money to people who don't deserve it.

Agreed 100%. Obama's lack of initiative in seeking punishment for those that brought on this collapse is to me his biggest failure.

 

[etrigan420]

Very few people in the federal government do their jobs,..

And you know this how?

 

[Jhhnn]

Yes, just like I'm jealous of bank robbers who rob a bank and get my money.

The requirements for these programs are as follows:
1. you owe more than your house is worth
2. you haven't been making your payments

#1 is only a problem if you didn't make a down payment (only allowed by government regulation), if your property value dropped by over 20%, and/or you were only paying interest on your loan. Even if your home value dropped by 20% after you made your down payment, you should still be able to afford payment on your loans unless you also fell in to #2. This leaves only the people whose homes lost 20% and need to move a substantial distance for work, in which case one can often negotiate a relocation package with the future employer.

Housing prices have fallen by a lot more than 20% in many areas, rendering that argument nonsense, as the whole song and dance about being paid for relocating to get a job. There is no magical somewhere else in America- employment opportunities suck everywhere, just worse in some places. Only people possessing very specialized skill sets can expect that sort of treatment, and they're such a small part of the workforce as to be insignificant.

If #2, then you bought too much house and/or chose the wrong kind of loan. Most people would choose the wrong kind of loan in order to buy more house than they could really afford. Choosing an ARM to get a marginally lower short-term interest rate to keep your monthly payments below your "budget" is a decision to take a risk that your payments will go up with time (indeed, in this case, it was virtually guaranteed that they would since the prime rate was virtually zero).

It should collapse back to equilibrium. If government took its borrowed money out of the puzzle, all house prices would decline back to what they should be, thereby making housing more affordable for everyone. Short-term pain for everyone in the game now, but it would alleviate permanent issues which have already manifested because of all of this meddling.

If #2, it just means you're unemployed, and there aren't any jobs to be had. Those who've been laid off are staying laid off, regardless of their skills or experience. Employment hasn't budged in years, and the average length of unemployment is at a record high & climbing-

http://economix.blogs.nytimes.com/2...h-of-unemployment-reaches-high-of-37-1-weeks/

As for the rest of it, you've chosen simply to deny, to ignore the fact that we didn't have these problems when the financial constraints of the New Deal were in full force in the post WW2 period. It was the most stable and prosperous period in our history. The bank really wouldn't loan you more money for a house than they thought you could afford, because they couldn't hedge their bunk many times over in synthetic derivatives.

http://www.propublica.org/article/a...one-hedge-fund-helped-keep-the-housing-bubble

You obviously don't understand how speculative markets work when left to function on their own. After any manic peak, the price falls well below equilibrium as a means of clearing excess inventory, then recovers to a new equilibrium from there. That would completely wipe out the major financial institutions, making buying a house strictly a cash transaction. In the ensuing debt/deflation scenario, the only people who have cash are the wealthy, because employment spirals downward with the general economy. That's precisely what happened in the wake of the stock market bust of 1929, which wasn't nearly as big a bust as the bust following the ownership society.

You really have no idea just how close we've come to a complete financial meltdown, nor the desperate measures used to avoid it, and that are still necessary to keep avoiding it. You think that your position & brains will keep you safe, when you're obviously not nearly rich enough to make that true. If you depend on a paycheck, you're vulnerable.

 

[CycloWizard]

And you know this how?

I was one of them until last week. I can show you the "performance incentive" I received by certified mail while sitting on the couch watching the World Cup last summer. I can tell you exactly where to go to observe all of these things yourself. Or, I can just point you to the observation already made by others in this thread: those perpetrating illegal activities on a level organized crime could only dream of have had NO people imprisoned or fined. Instead, they received rewards.

 

[CycloWizard]

Housing prices have fallen by a lot more than 20% in many areas, rendering that argument nonsense, as the whole song and dance about being paid for relocating to get a job. There is no magical somewhere else in America- employment opportunities suck everywhere, just worse in some places. Only people possessing very specialized skill sets can expect that sort of treatment, and they're such a small part of the workforce as to be insignificant.

If your house price fell over 20%, your payments still don't change. If you can't find a job anywhere else, then you don't need to unload your house. Suck it up and pay your bills. The only possible exception is someone who has become unemployed for an extended period, but at some point these people need to be realistic and take other jobs or create a job for themselves. If they still can't pay their bills, then that's what foreclosure is for. Government does not have the money to pay everyone's bills for them, nor do I have the money to pay someone else's mortgage. Reality is a bitch, but it's reality. The longer you avoid it, the worse the withdrawal will be when it catches up with you.

If #2, it just means you're unemployed, and there aren't any jobs to be had. Those who've been laid off are staying laid off, regardless of their skills or experience. Employment hasn't budged in years, and the average length of unemployment is at a record high & climbing-

http://economix.blogs.nytimes.com/2...h-of-unemployment-reaches-high-of-37-1-weeks/

As for the rest of it, you've chosen simply to deny, to ignore the fact that we didn't have these problems when the financial constraints of the New Deal were in full force in the post WW2 period. It was the most stable and prosperous period in our history. The bank really wouldn't loan you more money for a house than they thought you could afford, because they couldn't hedge their bunk many times over in synthetic derivatives.

Now you're making my point for me. When government could no longer afford to interfere, people somehow survived. Now, government can't afford to interfere, yet it's finding new, very expensive ways to do so. For example, the FHA alone:

During budget planning for 2008 HUD had been projecting $143,000,000 budget shortfall stemming from the FHA program. This is the first time in three decades HUD had made a request to Congress for a taxpayer subsidy. Even though FHA is statutorily required to be budget neutral, the GAO is projecting taxpayer funded subsidies of half a billion dollars over the next three years, if no changes are made to the FHA program.[citation needed]

Following the Subprime mortgage crisis, FHA, along with Fannie Mae and Freddie Mac, became the source of much of the United States mortgage financing. The share of home purchases financed with FHA mortgages went from 2 percent to over one-third of mortgages in the country as conventional mortgage lending dried up in the credit crunch. Without the subprime market, many of the riskiest borrowers ended up borrowing from the Federal Housing Administration, and the FHA could suffer substantial losses. Joshua Zumbrun and Maurna Desmond of Forbes have written that eventual government losses from the FHA could reach $100 billion.[6][7]

Government intervention in the housing market is a litany of trying to help people out but causing huge problems. Rather than seeing this, you want them to find new, more expensive ways to screw the pooch?

http://www.propublica.org/article/a...one-hedge-fund-helped-keep-the-housing-bubble

You obviously don't understand how speculative markets work when left to function on their own. After any manic peak, the price falls well below equilibrium as a means of clearing excess inventory, then recovers to a new equilibrium from there. That would completely wipe out the major financial institutions, making buying a house strictly a cash transaction. In the ensuing debt/deflation scenario, the only people who have cash are the wealthy, because employment spirals downward with the general economy. That's precisely what happened in the wake of the stock market bust of 1929, which wasn't nearly as big a bust as the bust following the ownership society.

You really have no idea just how close we've come to a complete financial meltdown, nor the desperate measures used to avoid it, and that are still necessary to keep avoiding it. You think that your position & brains will keep you safe, when you're obviously not nearly rich enough to make that true. If you depend on a paycheck, you're vulnerable.

I knew exactly how bad things would have been and planned accordingly. I saved cash and lived in a cheap apartment rather than buying a house. I have now been rewarded by having my money taken to pay for those who didn't (homebuyers), made reckless loans (banks), and knuckledraggers who created the mess to begin with (politicians). I had plenty of cash in hand to buy a pretty decent house when everything went to hell in a handbasket, but douchebags like you decided that wasn't fair for me to come out ahead when all of these other people deserve to keep their ill-gotten gains. Not only that, but I should pay their bills to ensure that they can stay in their nice McMansion while paying for my own modest place.

The only reason I'm not sitting pretty now is because you and the rest of your kind think that someone else deserves to have their gamble pay off, they ought not be held responsible for the gambles they took, and that I gamed the system by not taking part in all of the tomfoolery. The person of below-average intelligence who was willing to make a stupid investment that they couldn't afford is more deserving of owning a nice home than I am. You're right: I don't understand. This is an evil logic you and plenty of others have concocted for the greater good where I get thrown under the bus to reward those who deserve better.

I'm not sure if the contempt is coming across as strongly as I would like, so here I'll just make it explicit. You want to take my money and hand it to someone else to penalize my right action to rewarding their wrong action. That is unequivocally evil. You want me to work harder for less so that others can work less for more. That's evil. You want to penalize me for not playing the game to make me foot the bill for everyone who gambled and lost. DIAF.

 

[MooseNSquirrel]

Whatever point you are trying to make Cyclo is instantly discredited by you clinging to the fallacy that anyone else other than financial institutions bore the majority of responsibility for the financial meltdown.

This has been studied ad-nauseum. Feel free to Google away.

 

[OneOfTheseDays]

You cannot expect the average Joe to be financially responsible. That onus MUST fall on our banking institutions.

The fact that you disparage Americans for being financially reckless, while completely avoiding any criticism of the banking institutions that willfully engaged in this kind of fraud is ludicrous.

I'm glad the right wing is being exposed like the loony nutcases they truly are. The Tea Party is going down, and this ridiculous debt ceiling debacle will be their undoing. Common sense needs to make a resurgence and America has to send this lunatic fringe far far away.

 

[HamburgerBoy]

You cannot expect the average Joe to be financially responsible.

You have an alarmingly low faith in humankind.

 

[CycloWizard]

Whatever point you are trying to make Cyclo is instantly discredited by you clinging to the fallacy that anyone else other than financial institutions bore the majority of responsibility for the financial meltdown.

This has been studied ad-nauseum. Feel free to Google away.

I've stated repeatedly that banks share in the responsibility and should be held accountable. Here, I'm simply arguing that the people who took the loans should not be rewarded for doing so, leastways at the expense of those who did not.

 

[CycloWizard]

You cannot expect the average Joe to be financially responsible. That onus MUST fall on our banking institutions.

The fact that you disparage Americans for being financially reckless, while completely avoiding any criticism of the banking institutions that willfully engaged in this kind of fraud is ludicrous.

I'm glad the right wing is being exposed like the loony nutcases they truly are. The Tea Party is going down, and this ridiculous debt ceiling debacle will be their undoing. Common sense needs to make a resurgence and America has to send this lunatic fringe far far away.

Read the damn thread. I've repeatedly stated that the banks should burn as well. The real problem is that NO ONE - banks or individuals - is being held accountable for their idiotic actions.