I think we should start an organization of student debtors. We will refuse to pay our student loan debt en masse and see how the banks and government deal with it. If it works for homeowners, why wouldn't this work for student loan debtors? Eventually, they'll rework our loans as well.
By the way, I'm also a renter about to get screwed over by this little deal. So much for saving for a downpayment while waiting for the market to return to rationality.
Yeah, Citi calls my co-signer (my mom) every month to ask them to make my payment because I haven't paid a week before the due date. Unfortunately, my mom is a saint and won't tell them to go to hell. This month, they mailed her payment coupons - something they've never sent to me. If only it were a mortgage...
You tried to be responsible? Screw you! You should have bought a mansion instead of renting a rickety old apartment with no heat where the ceiling collapsed on you for $200/month. That's how I really feel.
spacejamz
Lifer
- Mar 31, 2003
- 10,995
- 1,745
- 126
Text
Obama to unveil $75B mortgage relief plan
The Associated Press
updated 10:22 a.m. CT, Wed., Feb. 18, 2009
PHOENIX - President Barack Obama?s plan to tackle the foreclosure crisis will spend $75 billion in an effort to prevent up to 9 million Americans from losing their homes.
In tandem, the Treasury Department said it would double the size of its lifeline to Fannie Mae and Freddie Mac. The government, which seized the mortgage finance companies last fall, said Wednesday it would absorb up to $200 billion in losses at each company.
The plan, which Obama is releasing later Wednesday, is more ambitious than initially expected ? and more expensive. It aims to aid borrowers who owe more on their mortgages than their homes are currently worth, and borrowers who are on the verge of foreclosure.
The initiative is designed to help up to 5 million borrowers refinance, and provides incentive payments to mortgage lenders in an effort to help up to 4 million borrowers on the verge of foreclosure.
?All of us are paying a price for this home mortgage crisis,? Obama says in a prepared text of remarks scheduled shortly after 12 noon EST Wednesday at a Phoenix area high school.
Headlining the plan was a $75 billion Homeowner Stability Initiative, under which would provide incentives to lenders to cut monthly mortgage payments to sustainable levels. It defines this at no more than 31 percent of a homeowners income.
Another key component: a new program aimed at helping homeowners said to be ?under water? ? with dwellings whose value have sunk below the principal still owing on their mortgages. Such mortgages have traditionally been almost impossible to refinance. But the White House said its program will help 4 to 5 million families do just that.
Of the nearly 52 million U.S. homeowners with a mortgage, about 13.8 million, or nearly 27 percent, owe more on their mortgage than their house is now worth, according to Moody?s Economy.com
Announcing his plan in a state hard hit by the housing crunch, Obama said that stemming the tide of foreclosures is key to turning around the recession-bound economy.
?In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to deepen,? he said, according to the advance text.
The plan also seeks to bolster confidence in Fannie Mae and Freddie Mac, the mortgage giants effectively taken over by the government last year. The White House said the Treasury will increase its funding commitment to the two using money Congress set aside last year, and will continue purchasing mortgage-backed securities from them.
The Treasury said the increased support for Fannie Mae and Freddie Mac didn?t reflect projected losses at the two companies, which were seized by government regulators last September. The two companies are currently projected to need a combined government subsidy of about $66 billion, well short of the new promise of up to $400 billion.
But Treasury Secretary Timothy Geithner said in a statement that the support ?will provide forward-looking confidence in the mortgage market and enable Fannie Mae and Freddie Mac to carry out ambitious efforts to ensure mortgage affordability for responsible homeowners.?
The biggest players in the mortgage industry already had halted foreclosures pending Obama?s announcement.
The president?s announcement was coming a day after he signed into law a $787 billion economic stimulus plan he hopes will spark an economic turnaround and create or save 3.5 million jobs.
In a ceremony at the Denver Museum of Nature and Science, he hailed the plan?s spending on green technology, education and health care, as well as badly needed repair of roads and bridges, and said those, plus middle-class tax cuts, represent the ?essential work of keeping the American dream alive in our time.?
Obama cautioned that the initiative isn?t ?the end of our economic troubles. Nor does it constitute all of what we are going to have to do to turn our economy around. But today does mark the beginning of the end.?
Republicans dismissed the stimulus plan as hugely expensive and unlikely to succeed. To House Minority Leader John Boehner, R-Ohio, it was ?a missed opportunity, one for which our children and grandchildren will pay a hefty price.?
At the same time, the administration was grappling with the darkening prospects for the U.S. auto industry.
Even as Detroit carmakers submitted restructuring plans to qualify for continued government loans, General Motors Corp. and Chrysler LLC asked for another $14 billion in bailout cash.
White House press secretary Robert Gibbs said the car companies? plans were being reviewed, but added, ?It is clear that going forward, more will be required from everyone involved ? creditors, suppliers, dealers, labor and auto executives themselves ? to ensure the viability of these companies.?
© 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
- Oct 10, 2000
- 25,696
- 1
- 81
No it wouldn't, all that it would do is further inflate the real estate values. People that bought in the last 5 - 10 years (fixed or adjustable) will see no appreciation or depreciation depending on how long ago they bought.
Moreover lowering your payments is no different than just handing out checks (better alternative, doesn't distort the market) and we saw that didn't do anything in 2008.
Fingolfin269
Lifer
- Feb 28, 2003
- 17,948
- 34
- 91
So how do I make it look like I'm an irresponsible home owner so I can get my slice of the irresponsibility pie? Look, I feel for the people who have been out of work for a long time and have now gone through their unemployment benefits and savings to stay afloat. That's a completely different animal than the #($@#$ people who bought into houses they could not afford, mortgate rates that only an idiot would sign up for, etc.
I was one of the smart people who bought a house with a payment that is 1/4 of my income. I don't have much of a car payment and refused to even think about buying a house until I was out of all other debt other than the car. So now for being responsible I get to pay for the #%%$# people. Yes, this shit pisses me off.
And please understand that I do not have some rich person's income which is why I am in a house payment that is 1/4 of my income. Instead of buying the big ass houses like most of my friends I went affordable. And don't worry, if I even hear some of my friends mention this shit as a positive for one of them I am going to let them know what I think about their situation. These are college educated people that KNEW better than to nod their head and say okay when a mortgage adjustor said 'Let's put down you make double what you really make so you can get the house you really want, okay?' F them.
I was one of the smart people who bought a house with a payment that is 1/4 of my income. I don't have much of a car payment and refused to even think about buying a house until I was out of all other debt other than the car. So now for being responsible I get to pay for the #%%$# people. Yes, this shit pisses me off.
And please understand that I do not have some rich person's income which is why I am in a house payment that is 1/4 of my income. Instead of buying the big ass houses like most of my friends I went affordable. And don't worry, if I even hear some of my friends mention this shit as a positive for one of them I am going to let them know what I think about their situation. These are college educated people that KNEW better than to nod their head and say okay when a mortgage adjustor said 'Let's put down you make double what you really make so you can get the house you really want, okay?' F them.
- Oct 10, 2000
- 25,696
- 1
- 81
All of us? Shared equity mortgages will slow down/stop the foreclosure rates by stopping the snowball action (reflexivity as Soros calls it). The more foreclosures -> the lower house prices -> the more foreclosures for people that are now under water-> the lower house prices etc.
There is no difference between keeping the person in the house with a lesser mortgage value and foreclosing on the house.
Sheik Yerbouti
Lifer
- Feb 16, 2005
- 14,080
- 5,453
- 136
Like myself and my wife, who did have a mortgage we could easily afford, but because she just got laid off unexpectedly, we are clearly in the wrong and don't deserve a chance to keep our home.
I do agree that people who made 60k a year and bought a 500k home don't deserve a bailout, but there are plenty of honest people who got ROYALLY FUCKED by this economy through no fault of their own.
I know we will scrimp and cut corners wherever we can, like millions of others, and hopefully that will get us through this, I don't even know if my wife and I qualify, our home value did drop dramatically, but i don't know in what ratio to what we owe.
So basically, try to empathize with some of the people out there. They deserve some help and empathy, and just aren't sucking the govt teat to get by.
I emphasize. My best friend bought a house on an arm 5 years ago and it adjusted last year. He could still make the payments, but then mervyns declared bankruptcy and he lost a job. He went out and got another job at Steve and Barry's and then they went under as well. There aren't many places hiring retail store managers anymore.
I feel for him because he's worked really hard and put a lot of money in that house. But, he's probably going to lose the house and I don't want him bailed out. I have a couple of coworkers in similar situations and I'm looking forward to another wave of foreclosures.
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.
If you could afford it so easily, why are you at risk of losing it if one of you lost your job? Why not move to a different house? Why should I pay for you to live in the big house on the hill while I live in a tiny condo?
I have a friend with a degree in mechanical engineering. He was making $65k a year and lived in a modest apartment for four years after school to save up for a nice down payment. He bought a $109k house. The factory he was working in closed and his job went to Mexico. Is he going to get government money? Hell no. Why? Because he planned ahead, bought things he could afford, and saved the rest. Now, when he gets a job again, he'll be taxed out the wazoo to pay for all of the people who decided that they didn't have to live modestly.
What's the moral of the story? People don't get "ROYALLY FUCKED" by an economy. They get "ROYALLY FUCKED" because they bit off more than they could realistically chew. Why should you be rewarded for failing to live conservatively?
sandorski
No Lifer
- Oct 10, 1999
- 70,862
- 6,396
- 126
Read much?
Extraordinary times call for extraordinary measures. This kind of program not only stabilizes the Livs of HomeOwners, but also stabilizes Financial Institutions. It's a Win-Win when stability is the thing that lacks the most.
Clearly not all will qualify for such a refinancing, but many will. Hell, many have simply abandoned Homes they could afford in order to avoid the Losses incurred by falling House Prices. They no longer will have to with this kind of plan.
I have been thinking why should the government take responsible for people's mistake? If people buy a house tht is beyond their mean, they should be punishede for it.
Unless somebody sees something else, the reduction in principal balance isn't covered by the government. The reduction in interest is going to be marginal and won't be nearly as big as the principal.
Kind of my point. I'm still screwed and living in a room while trying to save and other people get to keep their house on my taxes? Not exactly what I'd like to see.
Maybe another wave of foreclosures and the houses I'm looking at will drop to 200k and I can buy a house now. We're planning it so if one of us loses our job, we can still make house payments on a 30 year fixed rate on one income.
StageLeft
No Lifer
- Sep 29, 2000
- 70,150
- 5
- 0
Why focus on just home owners? I am one, but what about people who aspire to buy a home and are financially on the fence as being able to do it? How do they benefit by this bubble being patched? We already know there are people who didn't buy during the bubble because it just seemed completely retarded to them. They are still employed, still financially viable, and still want a house. Do they deserve one any less than somebody who's put on financial life support by the government to stay in a house?
I didn't say they are all sucking the teat, but in the economy that has made the US the strongest country on the planet, the rules are such that--or rather were--if you cannot make your house payments you get foreclosed on. Economies have been "ROYALLY FUCKING" people for a long time and will in the future, too. That's how the cards fall in a capitalist economy, right?.
Not everybody is upside down because of a glaring error, but it's something they got caught up in. I suppose, it is what it is. The pain has to come either to them or be spread among the many.
BTW, "laid off expectantly" is a bit redundant. You should never have a household budget made on the assumption of unending double employment. One of the best things that ever happened to me was being laid off for 6 months at the start of my professional career. It gave me a very conservative perspective. When buying a house or car we have always asked ourselves "If one of us loses our job, can we break even?" If the answer is no, we don't buy it. I have a couple of neighbors in a similar boat as yours, one who I imagine must have been very close to defaulting if the wife hadn't gotten another job recently, but the back picture is they have two car payments and overextended themselves, even when they were both working.
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