Obama's plan includes mortgage prinicpal reduction!

[bozack]

Originally posted by: XMan
Take Joe Martinez of Bristow, Va., who fits the profile of the "responsible" homeowner Obama cited in the plan. The government contractor and his wife thought they did everything right when they bought their brand new $600,000 house two years ago. They put 5% down and got a 30-year fixed-rate mortgage they could afford.

Others in their neighborhood, however, couldn't keep up with the payments. As foreclosure rose, the value of the couple's home plummeted to $450,000, leaving them doubtful they'd ever recover their investment.

Martinez called their lender to try to get into the Hope for Homeowners program, which would reduce their loan balance to 90% of the home's current value. But they were turned down because they weren't in default.

So two months ago, the couple stopped paying their mortgage, hoping they could then qualify. But even if they don't, they are willing to take the hit on their credit scores to stop throwing money down the drain.

"There's just no point to stay here," said Martinez, 29, adding he could rent the house across the street for half his monthly mortgage payment. "We don't want to give up our home, but it's never going to come back."

So since when is only 5% down the right thing?? and now not paying is a smart move when your housing value drops??? wow I should start doing that.

 

[Red Dawn]

Originally posted by: bozack

Originally posted by: XMan
Take Joe Martinez of Bristow, Va., who fits the profile of the "responsible" homeowner Obama cited in the plan. The government contractor and his wife thought they did everything right when they bought their brand new $600,000 house two years ago. They put 5% down and got a 30-year fixed-rate mortgage they could afford.

Others in their neighborhood, however, couldn't keep up with the payments. As foreclosure rose, the value of the couple's home plummeted to $450,000, leaving them doubtful they'd ever recover their investment.

Martinez called their lender to try to get into the Hope for Homeowners program, which would reduce their loan balance to 90% of the home's current value. But they were turned down because they weren't in default.

So two months ago, the couple stopped paying their mortgage, hoping they could then qualify. But even if they don't, they are willing to take the hit on their credit scores to stop throwing money down the drain.

"There's just no point to stay here," said Martinez, 29, adding he could rent the house across the street for half his monthly mortgage payment. "We don't want to give up our home, but it's never going to come back."

So since when is only 5% down the right thing?? and now not paying is a smart move when your housing value drops??? wow I should start doing that.

Those who stop paying their mortgages because the value of their homes dropped even though they can still make the payments aren't responsible and shouldn't be getting any help what so ever.

 

[nobodyknows]

Originally posted by: Vic

Originally posted by: Budmantom
Layman sure that's me.

I didn't finance more than I can afford, I live well beneath my means, I didn't use my house as a bank, I go to work everyday and I don't purchase more than I can afford.

I'm also of the philosophy that you don't get out this this huge financial mess by spending trillions of dollars that we don't have and can't afford.

Call me crazy.

Given that we all know that just a couple of years ago, you would have criticized as pessimistically un-American anyone who didn't finance more than they could afford, or live beyond their means, or use their house as a bank, then I think it's very safe to say that yes, you are crazy.

And no, I'm not angry. It's just that you're an idiot. Ideologues like you could be shown reality by God Himself and you'd still deny it for the sake of your little make-believe pre-conceptions. What good are you except for scorn? Think of it this way. As you scorn those who purchased more than they could afford, I scorn you for believing more than you can understand.

Well, for starters he's good for his mortgage payment.

 

[nobodyknows]

Originally posted by: Red Dawn

Originally posted by: bozack

Originally posted by: XMan
Take Joe Martinez of Bristow, Va., who fits the profile of the "responsible" homeowner Obama cited in the plan. The government contractor and his wife thought they did everything right when they bought their brand new $600,000 house two years ago. They put 5% down and got a 30-year fixed-rate mortgage they could afford.

Others in their neighborhood, however, couldn't keep up with the payments. As foreclosure rose, the value of the couple's home plummeted to $450,000, leaving them doubtful they'd ever recover their investment.

Martinez called their lender to try to get into the Hope for Homeowners program, which would reduce their loan balance to 90% of the home's current value. But they were turned down because they weren't in default.

So two months ago, the couple stopped paying their mortgage, hoping they could then qualify. But even if they don't, they are willing to take the hit on their credit scores to stop throwing money down the drain.

"There's just no point to stay here," said Martinez, 29, adding he could rent the house across the street for half his monthly mortgage payment. "We don't want to give up our home, but it's never going to come back."

So since when is only 5% down the right thing?? and now not paying is a smart move when your housing value drops??? wow I should start doing that.

Those who stop paying their mortgages because the value of their homes dropped even though they can still make the payments aren't responsible and shouldn't be getting any help what so ever.

But those who gambled and bought more house then they can afford hoping that prices would continue to climb should get taxpayer help?

 

[tm37]

I am OK with with a government backed RATE reduction, however I take issue with a prinicple reduction.

Listen you borrowed 500K to buy something, it is now worth 400K. perhaps tommorow it will be workth 900K and yet you still owe 500K. People borrowed money to buy a house. and now that house has devalued. The lenders sold dumb people on loans they could not afford which drove the housing market UP. The ability to get the money made the prices rise. Put these people in lower rates perhaps but they still borrowed 500K from investors. Many of which bought a house @ 200K refied @ 500k K to buy a new car, college for the kids, pay off CC debt, took a vacation, whatever. They BORROWED 500K

Here is the proposal. You can borrow the prinicple of your Loan @ 4.5% in a standard 30 year fixed. You need to have insurance and taxes in an escrow account. If you can make the payement GREAT you get to keep your house. IF not Sorry. This will help 95% of people and there is a 1 or two year window. This will help EVERONE and you can even cap it (by region).

See easy. and we are not handing out 10 gazillion dollars to do it.

 

[Red Dawn]

Originally posted by: nobodyknows

Originally posted by: Red Dawn

Originally posted by: bozack

Originally posted by: XMan
Take Joe Martinez of Bristow, Va., who fits the profile of the "responsible" homeowner Obama cited in the plan. The government contractor and his wife thought they did everything right when they bought their brand new $600,000 house two years ago. They put 5% down and got a 30-year fixed-rate mortgage they could afford.

Others in their neighborhood, however, couldn't keep up with the payments. As foreclosure rose, the value of the couple's home plummeted to $450,000, leaving them doubtful they'd ever recover their investment.

Martinez called their lender to try to get into the Hope for Homeowners program, which would reduce their loan balance to 90% of the home's current value. But they were turned down because they weren't in default.

So two months ago, the couple stopped paying their mortgage, hoping they could then qualify. But even if they don't, they are willing to take the hit on their credit scores to stop throwing money down the drain.

"There's just no point to stay here," said Martinez, 29, adding he could rent the house across the street for half his monthly mortgage payment. "We don't want to give up our home, but it's never going to come back."

So since when is only 5% down the right thing?? and now not paying is a smart move when your housing value drops??? wow I should start doing that.

Those who stop paying their mortgages because the value of their homes dropped even though they can still make the payments aren't responsible and shouldn't be getting any help what so ever.

But those who gambled and bought more house then they can afford hoping that prices would continue to climb should get taxpayer help?

Not with principle reduction, only rate reduction. If you borrowed on the equity and were never able to make the payments then it should be that you are SOL for being irresponsible. The mortgage company that gave you the loan should be SOL for being irresponsible too.

IMO people like the Martinezes who are talking about walking away from their homes because the value has dropped are no different than those who play the stock market. They invested and played the market and they got burned. Tough shit.

 

[feralkid]

Originally posted by: nobodyknows

Originally posted by: Red Dawn

Originally posted by: bozack

Originally posted by: XMan
Take Joe Martinez of Bristow, Va., who fits the profile of the "responsible" homeowner Obama cited in the plan. The government contractor and his wife thought they did everything right when they bought their brand new $600,000 house two years ago. They put 5% down and got a 30-year fixed-rate mortgage they could afford.

Others in their neighborhood, however, couldn't keep up with the payments. As foreclosure rose, the value of the couple's home plummeted to $450,000, leaving them doubtful they'd ever recover their investment.

Martinez called their lender to try to get into the Hope for Homeowners program, which would reduce their loan balance to 90% of the home's current value. But they were turned down because they weren't in default.

So two months ago, the couple stopped paying their mortgage, hoping they could then qualify. But even if they don't, they are willing to take the hit on their credit scores to stop throwing money down the drain.

"There's just no point to stay here," said Martinez, 29, adding he could rent the house across the street for half his monthly mortgage payment. "We don't want to give up our home, but it's never going to come back."

So since when is only 5% down the right thing?? and now not paying is a smart move when your housing value drops??? wow I should start doing that.

Those who stop paying their mortgages because the value of their homes dropped even though they can still make the payments aren't responsible and shouldn't be getting any help what so ever.

But those who gambled and bought more house then they can afford hoping that prices would continue to climb should get taxpayer help?

No, the Banks that sold them the Mortgages and assured them they could afford it should get taxpayer help.

Choose your poison.

 

[tm37]

Originally posted by: XMan
Take Joe Martinez of Bristow, Va., who fits the profile of the "responsible" homeowner Obama cited in the plan. The government contractor and his wife thought they did everything right when they bought their brand new $600,000 house two years ago. They put 5% down and got a 30-year fixed-rate mortgage they could afford.

Others in their neighborhood, however, couldn't keep up with the payments. As foreclosure rose, the value of the couple's home plummeted to $450,000, leaving them doubtful they'd ever recover their investment.

Martinez called their lender to try to get into the Hope for Homeowners program, which would reduce their loan balance to 90% of the home's current value. But they were turned down because they weren't in default.

So two months ago, the couple stopped paying their mortgage, hoping they could then qualify. But even if they don't, they are willing to take the hit on their credit scores to stop throwing money down the drain.

"There's just no point to stay here," said Martinez, 29, adding he could rent the house across the street for half his monthly mortgage payment. "We don't want to give up our home, but it's never going to come back."


Holy crap, either there's something more to that story or that guy is a complete jackass.

Based on the way the article is written, neither he nor his wife have lost their job.

So what has changed, really? The appraisals of houses around them? So what? It's an arbitrary number that's meaningless until such a time as they choose to sell. At that point it's worth what the market will bear. So who cares what the houses down the block are worth - and then the guy trys to screw the bank over since he's not happy with the terms of the contract he agreed to? Unbelievable.

Too darn many people have been looking at real estate as a short-term investment vehicle. It's a home, man, it's not a frickin' 401(k). I lived in apartments my entire life until my wife and I bought our house, and I could care less what it's worth right now. If we move it won't be for 5-10 years.

Again he saw people getting help and figured that we was DUE to get the help himself.

Basically it would be me Tring to collect unemployment while still employed! He is concerned that the house will not rebound and while I appriate that people buy CARS all the time and most of them are upside down when they drive it home. Again lets do some rate reduction to help some folks out and then move on. In this market the cost of the loan should be looked at not the value of the house (because the market is just too wacky right now)

People are clamoring to get principle reductions should think about this. Lets say you bought a Plasma TV 4 years ago. You got the best one out there and it cost 10K. Now you bought that on a low interst credit plan say 6% and have 10 years to pay it off in two ytears the TV is now selling for 4K and you still owe 8K. Citi is not going to reduce the principle. The only difference between this oand your mortgage is the amount of money

 

[Red Dawn]

Originally posted by: Budmantom


I'm also of the philosophy that you don't get out this this huge financial mess by spending trillions of dollars that we don't have and can't afford.

Call me crazy.

So you would have been just as upset if McCain won because we'd be doing the exact same thing even if the Repubs have somehow taken Congress.

 

[Budmantom]

Originally posted by: Red Dawn

Originally posted by: Budmantom


I'm also of the philosophy that you don't get out this this huge financial mess by spending trillions of dollars that we don't have and can't afford.

Call me crazy.

So you would have been just as upset if McCain won because we'd be doing the exact same thing even if the Repubs have somehow taken Congress.

I would be more upset if McCain won and he had done this.

 

[Budmantom]

55 percent of loans modified in the first quarter 30 days late

 

[TheSlamma]

Originally posted by: Kelvrick
Why? Me and my fiance/wife currently live in a rented master bedroom with ~100k combined income and are hoping to buy a house in the ~250k range with 25k in savings. Eventually the market will correct.

I say let the banks that didn't screw themselves over buy up assets at a discount and grow.

This is where I think people still get into trouble. 250K with 25K down, 10%? I think that leads to potential danger. If one of you loses their job you are going to be strapped again. Why not buy a HUD home or a foreclosed house that you can resell in a few years after you have been able to PUNISH the principal on the mortgage?

 

[quest55720]

Originally posted by: tm37
I am OK with with a government backed RATE reduction, however I take issue with a prinicple reduction.

Listen you borrowed 500K to buy something, it is now worth 400K. perhaps tommorow it will be workth 900K and yet you still owe 500K. People borrowed money to buy a house. and now that house has devalued. The lenders sold dumb people on loans they could not afford which drove the housing market UP. The ability to get the money made the prices rise. Put these people in lower rates perhaps but they still borrowed 500K from investors. Many of which bought a house @ 200K refied @ 500k K to buy a new car, college for the kids, pay off CC debt, took a vacation, whatever. They BORROWED 500K

Here is the proposal. You can borrow the prinicple of your Loan @ 4.5% in a standard 30 year fixed. You need to have insurance and taxes in an escrow account. If you can make the payement GREAT you get to keep your house. IF not Sorry. This will help 95% of people and there is a 1 or two year window. This will help EVERONE and you can even cap it (by region).

See easy. and we are not handing out 10 gazillion dollars to do it.

Exactly the reduction is bull crap hell my car value is less than the loan like millions of people will they reduce our principle also?

I can't wait till the 1000 dollar a year just for making your payments on time gets out there. I told a few co-workers and they were pissed that someone is rewarded for what they should be doing. They pay their mortgages on time and play by the rules and all they get for it is a kick in the teeth from Obama.

 

[feralkid]

Originally posted by: quest55720

Originally posted by: tm37
I am OK with with a government backed RATE reduction, however I take issue with a prinicple reduction.

Listen you borrowed 500K to buy something, it is now worth 400K. perhaps tommorow it will be workth 900K and yet you still owe 500K. People borrowed money to buy a house. and now that house has devalued. The lenders sold dumb people on loans they could not afford which drove the housing market UP. The ability to get the money made the prices rise. Put these people in lower rates perhaps but they still borrowed 500K from investors. Many of which bought a house @ 200K refied @ 500k K to buy a new car, college for the kids, pay off CC debt, took a vacation, whatever. They BORROWED 500K

Here is the proposal. You can borrow the prinicple of your Loan @ 4.5% in a standard 30 year fixed. You need to have insurance and taxes in an escrow account. If you can make the payement GREAT you get to keep your house. IF not Sorry. This will help 95% of people and there is a 1 or two year window. This will help EVERONE and you can even cap it (by region).

See easy. and we are not handing out 10 gazillion dollars to do it.

Exactly the reduction is bull crap hell my car value is less than the loan like millions of people will they reduce our principle also?

I can't wait till the 1000 dollar a year just for making your payments on time gets out there. I told a few co-workers and they were pissed that someone is rewarded for what they should be doing. They pay their mortgages on time and play by the rules and all they get for it is a kick in the teeth from Obama.

So, in what world do you live, where car values appreciate?

 

[bamacre]

http://www.lewrockwell.com/blo...w/archives/025472.html

Now I'm confused.

 

[frostedflakes]

Originally posted by: XMan
Take Joe Martinez of Bristow, Va., who fits the profile of the "responsible" homeowner Obama cited in the plan. The government contractor and his wife thought they did everything right when they bought their brand new $600,000 house two years ago. They put 5% down and got a 30-year fixed-rate mortgage they could afford.

Others in their neighborhood, however, couldn't keep up with the payments. As foreclosure rose, the value of the couple's home plummeted to $450,000, leaving them doubtful they'd ever recover their investment.

Martinez called their lender to try to get into the Hope for Homeowners program, which would reduce their loan balance to 90% of the home's current value. But they were turned down because they weren't in default.

So two months ago, the couple stopped paying their mortgage, hoping they could then qualify. But even if they don't, they are willing to take the hit on their credit scores to stop throwing money down the drain.

"There's just no point to stay here," said Martinez, 29, adding he could rent the house across the street for half his monthly mortgage payment. "We don't want to give up our home, but it's never going to come back."


Holy crap, either there's something more to that story or that guy is a complete jackass.

Based on the way the article is written, neither he nor his wife have lost their job.

So what has changed, really? The appraisals of houses around them? So what? It's an arbitrary number that's meaningless until such a time as they choose to sell. At that point it's worth what the market will bear. So who cares what the houses down the block are worth - and then the guy trys to screw the bank over since he's not happy with the terms of the contract he agreed to? Unbelievable.

Too darn many people have been looking at real estate as a short-term investment vehicle. It's a home, man, it's not a frickin' 401(k). I lived in apartments my entire life until my wife and I bought our house, and I could care less what it's worth right now. If we move it won't be for 5-10 years.

Yeah, I really don't have a whole lot of sympathy for the people who are upside down on their homes. It's a crappy situation, but they should be thankful they still have jobs and can afford to pay their mortgage and stay in their home.

The only ones decreased home values are going to really hurt are the people who were flipping property. They made an investment hoping that home values would keep on climbing, but they didn't. Just because it ended up being a bad investment doesn't mean they can stop paying on it.

 

[tm37]

Originally posted by: feralkid

Originally posted by: quest55720

Originally posted by: tm37
I am OK with with a government backed RATE reduction, however I take issue with a prinicple reduction.

Listen you borrowed 500K to buy something, it is now worth 400K. perhaps tommorow it will be workth 900K and yet you still owe 500K. People borrowed money to buy a house. and now that house has devalued. The lenders sold dumb people on loans they could not afford which drove the housing market UP. The ability to get the money made the prices rise. Put these people in lower rates perhaps but they still borrowed 500K from investors. Many of which bought a house @ 200K refied @ 500k K to buy a new car, college for the kids, pay off CC debt, took a vacation, whatever. They BORROWED 500K

Here is the proposal. You can borrow the prinicple of your Loan @ 4.5% in a standard 30 year fixed. You need to have insurance and taxes in an escrow account. If you can make the payement GREAT you get to keep your house. IF not Sorry. This will help 95% of people and there is a 1 or two year window. This will help EVERONE and you can even cap it (by region).

See easy. and we are not handing out 10 gazillion dollars to do it.

Exactly the reduction is bull crap hell my car value is less than the loan like millions of people will they reduce our principle also?

I can't wait till the 1000 dollar a year just for making your payments on time gets out there. I told a few co-workers and they were pissed that someone is rewarded for what they should be doing. They pay their mortgages on time and play by the rules and all they get for it is a kick in the teeth from Obama.

So, in what world do you live, where car values appreciate?

Why is it that any INVESTMENT is always going to rise? They bought high, just like millions of americans who by TV's the day BEFORE thanksgiving. Also is your houses value drops your TAXES DROP as well. The fact is that SOme people bought an investment that they live in and not a home that is an investment.

If you had bough OIL futures on Margin just a few months ago you would have gotten KILLED, should the gov bail them out.

The point is sound, you borrowed 200K you need to pay back 200K. End of discussion.

 

[Vic]

Were people handing over their equity to the banks while their homes were appreciating?

What will these currently 'upside-down' homeowners do if their homes jump up again in value 5 years from now?

 

[nullzero]

Originally posted by: Vic
Were people handing over their equity to the banks while their homes were appreciating?

What will these currently 'upside-down' homeowners do if their homes jump up again in value 5 years from now?

Good question lol they will either dump them and sell... or try to refinance again! This real estate market is not going to rebound for +15 years. There is to many idiots that are waiting on the side lines to cash out once they go into positive territory.