Obama has new bail out for underwater homeowners

[sm625]

The problem is that in 1999, every public pension plan in the country made projections based on 1999 stock market returns. Those pension funds still hold onto those projections! This is arguably fraud, but the real problem is that the banks are doing the same thing with mortgage values. In many cases they are holding notes with book values of 200-400k even after the home has been stripped of all its copper! The tech wreck wasnt big enough to sink the entire country. But the housing crash might be.

One thing is certain though: if it turns out that they are able to paper over hundreds of thousands of 300k mortgages on ransacked homes, then the inflationary blow off from it will be so enormous we will not know what hit us. I dont think its possible to paper over this, but IF it is, expect to see at least 10 trillion in new debt created in the next 3 years. I just cant see how that can happen, but it is the next step up from previous bubbles.

 

[brandonbull]

People on hear act like everyone did a $500k refi on their house and are now mad because they owe too much money. We bought a house because everything for rent was being sold so people we moving several times because you either had to buy or move. Only a very few people knew what financial institutions were really doing and truly knew the entire depth of fraud that was being committed.

There are several houses in my neighborhood that are abandoned and literally across the street they started building new homes. So how can people every expect to ever break even on their home when someone can buy a new one for the same price?

It's not that people want a handout it's that banks/lenders handed out loans like they were free, and when the bubble popped their bad investments were cleaned away. Homeowners got stuck with the bill and get hassled about getting a fair shake.

 

[alkemyst]

In many places all house values have plummeted to values around the tail end of 2002...so almost anyone buying 2003 or later have been affected.

 

[spidey07]

Brandon,

New homes are a bad idea right now and are priced some 30% higher than a used one. People wanting to buy shouldn't nor are looking at new homes. Way too much of a price premium.

 

[Jhhnn]

Wrt GSE mortgages, I don't see how this will cost the taxpayers any money- it may save money. Current mortgages are 100% guaranteed by the govt as would be any refinanced mortgages under the plan. The fact that it may make it more affordable for some people to maintain the payments on their underwater mortgages would mean lower default rates.

It just means that people who are paying their bills can refinance to a lower rate whether they're underwater or not. Some people who got caught when their ARM's reset or recast are paying very high rates and currently can't refinance because they're underwater. This actually rewards people who are trying to do the right thing.

The notion that it'll reinflate housing prices is hogwash. The only reason prices are as high as they are is because servicers are stretching out foreclosures so as to avoid a glut on the market. They claim it's for other reasons, and if you believe them, you're delusional-

http://www.usatoday.com/money/economy/housing/2011-02-21-unpaidmortgages21_ST_N.htm

17 months average, and growing- that's after falling behind by 3 months' payments.

 

[jayzds]

In many places all house values have plummeted to values around the tail end of 2002...so almost anyone buying 2003 or later have been affected.

I bought in 2001 and the value has dropped well below that. I would say what it cost in the 90's...this is in AZ which was hit fairly hard from the down turn.

 

[JEDIYoda]

last time i checked Obama was going to give all those homeowners who are underwater a full set of scuba diving gear.....

 

[Ausm]

last time i checked Obama was going to give all those homeowners who are underwater a full set of scuba diving gear.....

You got that right when he was waiting for Congress to make some Legislation to fix the mess 😉

 

[Ninjahedge]

We elected true representatives then.

A bunch of guys that point fingers at everyone else because their thumbs are still stuck up their asses.

 

[blackangst1]

Wrt GSE mortgages, I don't see how this will cost the taxpayers any money- it may save money. Current mortgages are 100% guaranteed by the govt as would be any refinanced mortgages under the plan. The fact that it may make it more affordable for some people to maintain the payments on their underwater mortgages would mean lower default rates.

It just means that people who are paying their bills can refinance to a lower rate whether they're underwater or not. Some people who got caught when their ARM's reset or recast are paying very high rates and currently can't refinance because they're underwater. This actually rewards people who are trying to do the right thing.

The notion that it'll reinflate housing prices is hogwash. The only reason prices are as high as they are is because servicers are stretching out foreclosures so as to avoid a glut on the market. They claim it's for other reasons, and if you believe them, you're delusional-

http://www.usatoday.com/money/economy/housing/2011-02-21-unpaidmortgages21_ST_N.htm

17 months average, and growing- that's after falling behind by 3 months' payments.

100% correct. This is not a bailout and will cost taxpayers nothing.

 

[quest55720]

100% correct. This is not a bailout and will cost taxpayers nothing.

Actually it will cost the tax payers. If fannie and freddie give breaks to those who pay their bills that means the government bail outs to them will be even bigger. As freddie and fannie will have less money coming in. There is a cost for basically everything the faster people learn this the better. Want to thank the OWS heros Frank and Dodd for letting fannie and freddie get into such bad shape.

 

[blackangst1]

Actually it will cost the tax payers. If fannie and freddie give breaks to those who pay their bills that means the government bail outs to them will be even bigger. As freddie and fannie will have less money coming in. There is a cost for basically everything the faster people learn this the better. Want to thank the OWS heros Frank and Dodd for letting fannie and freddie get into such bad shape.

WTF? Using your logic, any spending cuts would be classified as a taxpayer expense. "We're cutting defense spending by 5%" followed by "No! It's a taxpayer bailout!"

lol

 

[Munky]

Contrary to popular belief, it's a bailout for the banks, not the homeowners. Anything to avoid a default and force the banks to eat the dogpile of crap, aka "the asset"

 

[Zebo]

Brandon,

New homes are a bad idea right now and are priced some 30% higher than a used one. People wanting to buy shouldn't nor are looking at new homes. Way too much of a price premium.

All homes are a bad idea right now. 40% of all mortaged homes are upside down and since only 1/3 own thier homes outright that's a lot of homes. 25% of upside-downers are not even paying mortgage and living 2 years rent free in places. Banks are all bankrupt if they were to start mass foreclose so they can't do shit. But what can't continue won't and one day SWHTF and you'll have a flood of homes on the market.

 

[Zebo]

The problem is that in 1999, every public pension plan in the country made projections based on 1999 stock market returns. Those pension funds still hold onto those projections! This is arguably fraud, but the real problem is that the banks are doing the same thing with mortgage values. In many cases they are holding notes with book values of 200-400k even after the home has been stripped of all its copper! The tech wreck wasnt big enough to sink the entire country. But the housing crash might be.

One thing is certain though: if it turns out that they are able to paper over hundreds of thousands of 300k mortgages on ransacked homes, then the inflationary blow off from it will be so enormous we will not know what hit us. I dont think its possible to paper over this, but IF it is, expect to see at least 10 trillion in new debt created in the next 3 years. I just cant see how that can happen, but it is the next step up from previous bubbles.

300k? Maybe in the sticks. I'm originally from the OC and a 3000 sqft stucco box was selling for 1.5-1.7 million and there are tons of them. Lots of my friends from HS and growing up with aint paying shit. Matter a fact I'm taking my trailer and picking up a $25,000 HELOC BBQ for $1000 from one house on Friday.

 

[Yreka]

Your lawyer is an idiot and your story reeks of falsehood. Proving you've paid your payments on time is as easy as providing cancelled checks.

I think most "normal people" who haven't experienced something similar would be very surprised at the shit some of the banks are pulling with mortgages.

Being right isn't enough. Wading through criminal incompetence (or outright fraud) to get some kind of resolution without 3rd party legal mediation is often impossible. Again, most people think "well i would just go down there and raise hell rabble rabble rabble"... Not the case, doesn't do a damn bit of good.

Many of these people getting screwed are smart, did the "right thing", & played by the rules .

I just hope it gets fixed before more have to learn the hard way.. You aren't special you just haven't been fleeced yet.

 

[Ninjahedge]

What should be sought is away to reduce overall loss, not a way to enable a few to get as much as they can before everyone else has to pay more.

That was the bubble bursting selloff.

As I said before, finding some way to keep the people IN their houses with the hopes that they can keep it will keep the houses occupied and HOPEFULLY in decent repair.

THAT keeps their value up. You drive people off, you get a deteriorating ghost-town with $0 income that, at best, can be declared as a loss on your companies tax statement.

More financial BS. (Even those losses are being depreciated due to the reduced value of the homes...)

 

[Texashiker]

In many places all house values have plummeted to values around the tail end of 2002...so almost anyone buying 2003 or later have been affected.

Negative, there are places all over the country where the price of housing has held steady.

Just because parts of the country had a bloated housing market, does not mean everyone did.

 

[Gibson486]

Come on obama...what about us kids with student loans?

Sent from my HTC mytouch using Tapatalk

 

[NoCreativity]

Come on obama...what about us kids with student loans?

Sent from my HTC mytouch using Tapatalk

Ditch the data plan and pay an extra $30/month on your loan. 😉

 

[mshan]

I was flipping through channels at stock market close on Monday and Dylan Ratigan had this professor on who was involved in S & L clean-up.

He said that at least 50% of all loans were fraudulent and I think he basically implied criminal activity by banks because you just pick up loan documents and it is obvious numbers don't add up.

Part of this "bailout" is letting original fraudster banks out of future liability when the refi occurs.

So the banks are getting a lot back out of this deal and it is not just a bailout for supposedly reckless borrowers...

 

[Darwin333]

I was flipping through channels at stock market close on Monday and Dylan Ratigan had this professor on who was involved in S & L clean-up.

He said that at least 50% of all loans were fraudulent and I think he basically implied criminal activity by banks because you just pick up loan documents and it is obvious numbers don't add up.

Part of this "bailout" is letting original fraudster banks out of future liability when the refi occurs.

So the banks are getting a lot back out of this deal and it is not just a bailout for reckless borrowers...

If you look close enough all of these programs are intended to help the banks and the banks alone. The politicians must make it look like its really to help the people in order to sell said program but in the end its just smoke and mirrors.

 

[Jhhnn]

If you look close enough all of these programs are intended to help the banks and the banks alone. The politicians must make it look like its really to help the people in order to sell said program but in the end its just smoke and mirrors.

Lots of unsubstantiated attribution in that. Any homeowner who can refi to a substantially lower rate benefits, almost w/o exception. That's plain & simple. This program, as I understand it, will allow underwater homeowners to do so, not just those with positive equity.

It only applies to people who make their payments, and it acts just like a normal refi in all other respects. Current investors get paid off, new investors buy securities based on the new lower rates from people with a history of being able to pay even more than they will under the new mortgage.

I mean, really, what's not to like?

 

[alkemyst]

Lots of unsubstantiated attribution in that. Any homeowner who can refi to a substantially lower rate benefits, almost w/o exception. That's plain & simple. This program, as I understand it, will allow underwater homeowners to do so, not just those with positive equity.

It only applies to people who make their payments, and it acts just like a normal refi in all other respects. Current investors get paid off, new investors buy securities based on the new lower rates from people with a history of being able to pay even more than they will under the new mortgage.

I mean, really, what's not to like?

Well the problem is where those that invested in the mortgage pools get paid off in full and then they are resold (probably back to the same investors).

 

[Thump553]

Contrary to popular belief, it's a bailout for the banks, not the homeowners. Anything to avoid a default and force the banks to eat the dogpile of crap, aka "the asset"

If they were conventional loans there would be a big element of truth to what you say. But these loans are already 100% Fannie Mae or Freddie Mac insured so in effect they are 100% government/taxpayer insured already. No increase in risk to the government results from this program.

The notion of giving responsible homeowners the opportunity to refinance at present day low market rates, when they could not otherwise solely because of the decline in the value of their homes, seems to me to be a nonpartisan no-brainer. If we do nothing and they default we pay the loss anyway. This way lower finance payments = more disposable income (hopefully) = more consumer spending causing economic growth.

I fully understand (but do not excuse) the GOP's mindset to criticize anything Obama does for the good of the party, but these people should start looking at the good of the country, and the people in the country, first.