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depakid Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 04:58 PM
Original message
House Passes Housing Bill After Bush Says He Will Sign It
Source: NY Times

The House on Wednesday afternoon approved the most far-reaching government assistance for the nations housing market since the New Deal.

The measure, which passed by a vote of 272-152, includes broad authority for the Treasury Department to protect the nations two largest mortgage finance companies and an aggressive plan to help hundreds of thousands of troubled borrowers avoid foreclosure by refinancing their mortgages.

The White House, citing an urgent need to restore market confidence in the two mortgage giants, Fannie Mae and Freddie Mac, said Wednesday morning that President Bush would sign the measure despite his opposition to $3.9 billion in grants included in the bill for local governments to buy and refurbish foreclosed properties. Mr. Bushs support clears the way for the bill to become law after final approval by the Senate later this week.

The Treasury Department says that it hopes to never use the authority to spend hundreds of billions of dollars to maintain the solvency of the mortgage giants because they remain in sound financial condition, but shares in the two companies rose sharply on Wednesday

Read more: http://www.nytimes.com/2008/07/24/business/24housing.ht...
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earthside Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:06 PM
Response to Original message
1. Bad Economics
Did you catch this part?

To accommodate the rescue for Fannie Mae and Freddie Mac, the bill also raises the national debt limit to $10.6 trillion, an increase of $800 billion.


So, we are using one credit card to pay-off another credit card.

The day will come when this whole house of cards collapses.


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CountAllVotes Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:13 PM
Response to Reply #1
2. also, more money for Iraq & other wars
good catch there. No wonder the god damned thing passed without too much grunting!

:kick:

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SpiralHawk Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:06 PM
Response to Reply #1
9. Yay - republicon 'conservatives' set a new DEBT record under Commander AWOL
eom
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ElectricGrid Donating Member (211 posts) Send PM | Profile | Ignore Thu Jul-24-08 09:43 AM
Response to Reply #9
26. What the hell? You realize whose idea this was...
pubs are not the only ones with their hands bloody on this one.
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OKthatsIT Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:05 PM
Response to Reply #1
15. The day will come when this whole house of cards collapses?
Not until we are sold up the river...and more widespread JackBoot paramilitary police forces funding are in place.
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high density Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:19 PM
Response to Original message
3. Why not give everybody a housing grant or better loan terms?
This idea of rewarding bad behavior, whether it be by a company or an individual, is a bad precedent in my opinion. We need to have safety nets in our society, but we cannot endlessly prop up the people who made bad or ignorant financial decisions. The people in the middle class who are just skating by seem to be always ignored in this country.
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 05:34 PM
Response to Reply #3
4. I'm middle class, or so I'd like to think...
and find that this bill would help me out immensely. Not only would it benefit my career as I'm in the reverse mortgage industry, but it would also help me out personally by giving me the opportunity to switch my Option ARM into a Fixed 30-Year Fixed loan. I think it would be better for banks and consumers to take a bit of a decline as opposed to losing the whole darn thing. I mean, would it be better to not allow this bill to go through, allow the 9000+ foreclosures daily to continue and allow our country to completely spiral downhill? I truly see this housing bill benefiting a lot of folks that truly need it in these trying times.

Yes, I do agree about there being hidden incentives for banks and corporate re-thugs and some others of the top 1%, but they always benefit no matter what we do. There's always a downside, but I'm trying to see the positives here, and it would boost us somewhat (or at least prop us up for some time longer to prepare for the inevitable).
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Mojorabbit Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:20 PM
Response to Reply #4
5. Some talking head on tv
said it would only benefit five percent of mortgage holders in trouble.
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 06:23 PM
Response to Reply #4
6. You want the Fed's to bail you out of a Neg-Am (Option-ARM) loan?
Did you take out the Neg-Am loan because you couldn't afford a conventional fixed loan? If so why should the rest of us pay for you to be a homeowner, why not just rent? You're in the loan business so you should have known better. Unless you think propping up home prices is a good idea why should anyone support this bank bailout?
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CountAllVotes Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 07:35 PM
Response to Reply #6
7. as a home owner I do NOT support this bill
the reason is is because I was a renter for about 25 years because I could not afford to buy a house. I paid lots of bucks to greedy landlords over the years. I really wanted a home, yes, but I had to wait until the right situation that was affordable that I qualified for to come up, and yes, it was a very long wait.

Finally I got my own home and I was damn lucky and I know it. I am grateful for it, but I did not get it by lying about what I had to some company handing out mortgages to people that did not qualify for them in reality. These liars should have had to wait too, just like most other Americans that have had do - tow the line to get a house. If they claim they did not know what they were getting into, that they were lied to, etc. - that still is no excuse IMO. They should have read the paperwork they signed and if they couldn't understand it - hire an attorney to review it and tell you what is means.

There are many out there that are not so fortunate and must rent, albeit many do rent by choice. In any event, why should these very people (renters) that perhaps cannot afford their own home (or simply do not want one for whatever reason) have to be the ones to foot the bill for this disgusting theft that is going on?

:kick:
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Political Heretic Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:12 PM
Response to Reply #7
10. You've got that ass-backwards, pal
There's pretty solid evidence which seems to indicate that in most cases, it wasn't so much individuals "lying" as it was snake oil mortgage lenders lying and misleading about the actual terms of the mortgage.

You say that being lied to is no excuse. Really? Wow. Because I'm pretty sure in this country, being lied to about the terms of a legal contract is a crime. And skirting as close to that line as possible is unethical business practice.

And even if all of that wasn't true - you're attitude still sucks. I live in Idaho, I have plenty of hard core conservatives I can talk to if I want to hear a compassionless "Why should they get help, I never had any!" bullshit.

As a forced-renter myself, I can tell you that I am more than happy to spend some of my taxes to help out some other folks. I'm happy to do this if they were taken advantage of. I'm happy to do this if they though they would be okay, but turned out to have make a mistake that they are responsible for.

I'm happy to do this, because I'm less interested in who deserves what and more interested in helping people. Especially in this case, when there is tons of evidence that mortgage companies were incredibly dishonest and shady in pushing people into these loans swearing up and down that they would be able to afford them.


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CountAllVotes Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:32 PM
Response to Reply #10
13. frankly ..
I would NEVER sign a contract involving thousands of dollars, if not hundreds of thousands of dollars involved if I did not completely understand it. If these people were LIED to that is another story altogether and YES I do have sympathy for them.

However, it is also my impression that some of the people that took out these loans LIED as well.

So in this case, sometimes one hand washes the other it seems to me.

Now the USA is over $10 trillion in debt. That is not good. Where does the extra money in this bill go? What does it pay for?

These are the questions that remain unanswered.

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Political Heretic Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 09:25 PM
Response to Reply #13
14. Yeah... and some people game the welfare system too.
So, in standard conservative argument mode, we shouldn't have any welfare at all because some people are dishonest.

Have you not read any analysis in the last... god..almost year about the creation of the so-called mortgage crisis? Read about key executives in several mortgage firms stepping down under allegations of misconduct? One arrested? Haven't read the examples published in the NYT and most other papers (frankly) about the methods by which mortgage people would distort the terms of the loan when presenting them to people, or how they would run down these complicated processes to convince people that they really could afford them?

The USA isn't 10 trillion dollars in debt because its spent too much money helping the bottom 80% of America when they're in trouble... that's for damn sure.
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 12:58 AM
Response to Reply #14
17. Let me tell you there were a lot of liar loans in California...
Option ARM's, HELOC's, I/O ARM's etc. The liars were on both sides, the brokers and the owners stating an income that far exceeded their means. It was especially enticing when you could get a million dollar home with No Income, No Job, and No Assets (NINJA loans). Many, many owners were using their houses as ATM's figuring they could always re-fi or sell their house a year or two down the road for a much higher value. You can't steal from Peter to pay Paul.
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 01:45 AM
Response to Reply #17
21. Why assume the owners lied about their income?
Here's one owner that bought two years ago and honestly made twice then what they make now; same company. Economy sucks right now, and I'll take all the assistance I can get :)
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:01 AM
Response to Reply #21
22. You're in the mortgage industry and your income has doubled?
Edited on Thu Jul-24-08 03:02 AM by SahaleArm
You might be the only one left...
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 10:46 AM
Response to Reply #22
28. Please re-read what I posted...
It says that I "made twice then what they make now", which is basically saying that I'm making half of what I used to make two years ago. And, just so you know, I'm steering away from any assistance so far by working 4 jobs. Guess I'm a true Amurican, huh?

:sarcasm:
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:21 PM
Response to Reply #28
37. Yeah, my mistake n/t.
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Megahurtz Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:35 PM
Response to Reply #21
40. As long as it serves you, it's okay?
Renters are getting fucked over this one. No one is giving any assistance to us.

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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:41 PM
Response to Reply #40
41. Quick Question...
How is your rent a topic of national discussion? I mean seriously... our whole economy is not collapsing because of yours or anyone's rent. It is collapsing because of a lies and manipulations in numbers by mortgage lenders, brokers, governement agencies, etc.

I guess we should forget the housing bill and just let our economy and everyone in our country tank; whether they deserve it or not, huh?

:sarcasm:
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:46 PM
Response to Reply #41
43. I'd rather clean out the bad debt now and take my medicine.
Rather than go into a slow slide ala Japan where housing craters down 90% over a prolonged period. There were a lot of homeowners who used their houses as ATM's - I have trouble believing they played no part. This bailout will prop up house prices in the short term but the people it helped will be underwater again in 1-3 years as soon as Option ARM's start recasting.
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:52 PM
Response to Reply #43
46. Not if new government programs
help those with these ARMs to switch over to 30 year fixed loans. Then there is no resetting of rates and payments and one can expect to pay the same payment in 20 years as they are now... that would be much more realistic and at least its a shot rather than allowing a spiral... no?
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:58 PM
Response to Reply #46
49. Most people with ARM's couldn't afford fixed loan rates back when they were cheap.
30-year fixed loan rates have risen 1.5% since the heyday and the only way for this to work is loan reduction. That will cost the trillions of dollars because the bank will have to be paid off. Where will the Fed's get that money from, taxes, borrowing?
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:03 PM
Response to Reply #49
50. Well...
the talk in my office is that price reductions would be much better than a total loss. Not only that, but the further talk is that when a company agrees to offer a reduction, there would be some sort of equity sharing involved for when the property increases in value when this is all over with.

I don't know where you are located, but here in San Diego, we had the opportunity to petition for a reduction in our assessed values with the county tax assessor. The deal, however, is that the values are reviewed on an annual basis and the assessor will increase your values/taxes based on the market up to the point where the assessed value should be from the time you bought plus annual increases. They cannot increase over the current values.

In that sense, I see lending institutions following suit to some nature.
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:14 PM
Response to Reply #50
53. How will your bondholders feel when you stiff them?
There's a huge difference between the county reducing tax valuation and the bank writing off real money. Did you know your loan has been packaged and resold on wall street as bonds (Collateralized Mortgage Obligation)? That's how the credit markets including mortgages work. If investors quit buying bonds then were all screwed.
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:20 PM
Response to Reply #53
55. From what I'm noticing...
investors have already stopped buying bonds. This is why it is so difficult to obtain a mortgage right now. There's a processor in my office that had a customer that was planning to put 40% down and finance the other 60%... the lender approved everything throughout processing but then at the last minute they denied the loan and said that the investor now requires a minimum 50% down...

Things are getting scary and this is why, I believe at least, the government is trying to do something so jumpstart the country again. I have another coworker, on the other hand, and her family lives in Houston. They boast having maintained track on their property appreciation and that they actually just did a refi, no problems at all. I venture to think that this must be because they reside in His Glorious Fuhrer's state...
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:25 PM
Response to Reply #55
59. 40% down works even in a depreciating market...
Provided that the Debt/Income ratio is low enough. Do you work for a broker or a wholesaler? If a broker, who's your wholesaler(s)?
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:39 PM
Response to Reply #59
63. Broker...
We do loans with BofA, Countrywide, IndyMac/Financial Freedom, EverBank, SunWest, Gold Reverse Generation Mortgage, World, Paul Financial, and Flagstar.

Myself, I am strictly Reverse Mortgages and have nothing to do with the conventional loans that go through my office. I'd love to have the experience, but kinda glad that I'm not in that end of the mortgages. :)
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high density Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 09:23 AM
Response to Reply #10
24. Wrong.
This is the biggest financial transaction in their lives, and people can't slow down to read the paperwork? Ignorance, willful or otherwise, is not a reason to bail people out who made poor choices. I did mortgage processing, so I am well aware that the cost of these loans is made very clear to the borrowers thanks to federal laws which require specific disclosures.

Now if the paperwork was in error or otherwise not in compliance with the Truth in Lending act, then by all means prosecute the fraudulent lenders. It's very likely that in some cases fraud occurred on the lending side, but that doesn't automatically mean all of the other borrowers are now off the hook. If they can't use a calculator to figure out how much home they can afford then they shouldn't be buying a house to begin with. Home buyers that blindly take the advice of salespeople (such as realtors and loan originators) are setting up their own demise.
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Lorentz Donating Member (302 posts) Send PM | Profile | Ignore Thu Jul-24-08 11:09 AM
Response to Reply #24
31. Good points. I blame both -- I think there's a mix of dishonesty and ignorance here.
Many people lied to get a mortgage because they felt they "deserved" a home. Others were probably cheated by predatory lenders. But I'm curious: if so many people were innocently duped by the mortgage companies, why aren't there a rash of lawsuits agains the industry? Why are people taking it lying down?
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:50 PM
Response to Reply #31
45. Lawsuits...
From what I read, there are quite a bit of lawsuits flying around right now within the lending institutions; however... have you heard of the term "You can't squeeze blood from a turnip"? I would compare 99.9% of all lending institutions right now a turnip because there's no cash. Why go through all the legal hassle to get nothing but attorney fees.

Your statement about how many people lied to get a mortgage because they felt they deserved it, well that's just a blanket statement. There are hundreds of thousands of folk out there right now in a similar housing predicament, but I'm sure that there are a lot of unique situations. Not to mention that it wasn't just predatory lenders, but an entire government system that assisted lenders in propping up our economy.
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Political Heretic Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:19 PM
Response to Reply #24
35. Wrong.
It has nothing to do with the paperwork. It has to do with being pressured, manipulated and conned into believing that they could honestly afford the terms of the loan, which start out fine then become impossible. The system shouldn't work that way. It should be so incredibly transparent, honest, and cautious in lending that even a child would understand. And until it is, I'm not going to deny people assistance en masse because there may be some people who deserve what they got.

And once again, I'm not a conservative asshat. So even if some people were "setting up their own demise" doesn't mean I don't want to help them, and don't want to go after companies that do everything in their power to mask the truth.

Once again we have privatized profit and socialized losses... if a big company fails, its bailed out at taxpayers expense. No one talks about "personal responsibility" of the people who failed to make it in the market when that happens. But when individuals "fail," people freak out and start spewing condescending, arrogant, judgmental bullshit and freaking out about how "their tax dollars" will go to help some people.

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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:25 PM
Response to Reply #7
12. I can understand
where you come from, but where I live, it can actually be cheaper to own a home than to rent. In that sense, it's an incentive to own a home as opposed to rent. As for my personal home purchase... I did no lying whatsoever, so I don't think it's quite fair to just assume everyone lied; but I guess life's not fair.
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Megahurtz Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:32 PM
Response to Reply #7
39. Thank You!
:applause:

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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:20 PM
Response to Reply #6
11. Well, as long as I have a job, I pay my mortgage.
So, in that sense, how is the government bailing me out? They would simply refinance me into a 30 year fixed, something affordable on the long term, as opposed to what I have now. I could easily try and refi with another company right now, but I challenge you to find a company that's funding loans presently here in Southern California without having 30+% down.

Myself, I am in my 20's and may not have as much life experience to know better than to rely on my government and my boss and simply most folks I grew up to trust and listen to. So I apologize for my past, but here it is in the now. I recognize the issues at hand right now and know what I can do to help my family out as best possible and so I just try to do the best thing possible for us. It's like a dog eat dog world, or maybe just country, but you definitely have to look out for yourself.

And on another note, from a Reverse Mortgage stand point, it would greatly help a lot of baby-boomer and older folks from losing their homes. I'd hate for my grandma to lose her home because they got jipped into some HELOC that is an ARM and here in So. Cal. are no longer. Everyone here has received letters from their HELOC lenders that simply state, your homes have gone down in value and you can no longer have this available credit against equity. Yes, I understand why they don't lend the money, but a lot of people have assumed they could use their equity for retirement or partial savings and come to find out it's simply gone. What would Grandma do if she got kicked out and had to rent on her $780/month retirement in LA? You can't even find a place to live for that much in LA (That I would consider decent for Grandma :) ).

I've heard other parts of the country that don't have it so severe, so I can understand that point of view, but this is mine.

:hi:
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 01:03 AM
Response to Reply #11
18. How much would your monthly change if you went to a 30-year fixed?
Most Option ARM loans are in Neg-Am because owners are paying less than interest. When these loans recast (not reset) the payments will go up 2x-3x the prior amount, can you really afford that? If not then you can't afford a fixed unless your interest rate goes negative... You're in your 20's so save up for 10 years and then buy something. It's almost always cheaper to rent than to buy.
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 01:42 AM
Response to Reply #18
20. It's too late... I already bought.
So, that is why I am for the housing bill. My loan is interest only and I do pay a slight extra each month, which equates to about a payment and a half extra per year on my 2nd. Not all Option ARMs were neg-am; there were all sorts of ARM breeds out there. But I guess I kinda am still in a neg-am in some sense because my property value has dropped $130,000 below what I owe and its still dropping daily.
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:12 AM
Response to Reply #20
23. Yeah, you're f*cked...
Edited on Thu Jul-24-08 03:19 AM by SahaleArm
You're not neg-am, just upside down on the mortgage (house value < mortagage balance). In SoCal it happened in the early 90's as well; history repeats itself. An I/O ARM loan is not an Option ARM (Pick-a-Pay) loan and if you're paying more than interest then you're potentially paying down principal on the 1st.

All Option ARM's allow paying less than interest which leads to an increase in loan balance (neg-am); they also allow you to pay I/O or P+I. About 80% of Option-ARM loans are paid at less than interest which is going to be a serious problem in 2009-2011 when the loans recast to P+I. In your case you may have a 10-year I/O loan which allows you to pay I/O for 10 years and potentially break-even if the house prices go back up. BTW is that $130k below your 1st and second or just the 1st?

The amount of money in this bill is not nearly enough to bail out everyone who's upside down, probably wouldn't even cover SoCal. Another option is to short sell the property with the banks permission.
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 10:55 AM
Response to Reply #23
29. I'm banking on the fact that my lender
will work out a deal on my mortgage and reduce the balance for some type of equity share when values go back up. That would be the best option for me. My option to my lender is, work with me or there might come a point where I need to walk and then they'll get nothing as opposed to someone that's still maintaining their mortgage with no late payments. Another option would be to simply buy a new home and then let my old home go into foreclosure because my lender won't work with me.

Right now I owe:
1st: $348,000
2nd: $ 87,000

Home is worth between $260-300,000 depending on which appraiser you are speaking with right now.

SD County Tax Assessor reduced my value to $300,000 based on my petition to them a few months back.
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:20 PM
Response to Reply #29
36. Most likely they would go for a short sale...
Write off the difference and send you a 1099 so you'll have to pay taxes on the $135k difference (say $35k). If this is your primary residence then you won't pay taxes due to the Mortgage Forgiveness Debt Relief Act of 2007. House prices are going to continue to fall for the next 2-3 years so it might be best to get out now.
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:44 PM
Response to Reply #36
42. Well, I'm not looking to get out, but continue on with my primary residence.
I don't want to lose my home and let my home and my family become a statistic of GWB and his reign. My motive is to do everything in my power to maintain my mortgage.
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:47 PM
Response to Reply #42
44. Why not rent a house for half of your mortgage?
Why the need to own a depreciating asset? You can always buy later.
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:56 PM
Response to Reply #44
47. Well, let's take a look at it...
My payments, after taking tax breaks into account, are $1800. I moved into my home from a two bedroom condo in Encinitas, CA where the rent is right now going for $1875/month. I now, also, cannot fit into that condo and would require something bigger since I now have a 70lb dog along with a newborn on the way and my sister living with me. So, actually, my $1800/mo mortgage equates to $1300/month after I get rent from my sister. It's not a bad deal to own in SD County right now because of the rents being outrageously high.
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:08 PM
Response to Reply #47
51. Your current payments are artifically low because you have an interest only loan...
A 30-year fixed would make your payment $2700/month on a loan balance of $435k. Is your loan resetting or recasting soon and how long is your interest-only period? If you can get a loan modification to $300k then your P&I works out to $1800/month.
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:14 PM
Response to Reply #51
52. My payments are larger than $1800...
I pay $3000, but get about $1000 back each month from the interest and tax benefits. So, maybe I'm paying more like $2000 and not $1800, but still. Also, the I/O portion totals $2800, so I am paying towards the principal as best I can.

I received a 10 year I/O Fixed and will switch to an ARM at the end of the 10 years. My goal was to pay down my 2nd as best possible in those 10 years. I had thought that 10 years was plenty to overcome this housing crisis. Now it's two years later and we're in much more of a mess than I could even comprehend two years ago.

I would be happy even if I could keep my payments where they are now... I mean, I can make the bills with 4 jobs and all :) Oh, and don't forget that my wife has two jobs.

GWB would be oh so proud!! :)
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:22 PM
Response to Reply #52
57. Back of the envelope says your current ARM rate is 7.75%
Seems awfully high for being only two years into the 10-year fixed period. Did you have a teaser rate that already reset? Also in 8 years you may be back to even on the loan balance but I wouldn't bank on it. Rates are going to go up, there is not other choice because bondholders want more return for increased risk. What's the max you rate is capped at for each reset and max for the life of the loan?
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:32 PM
Response to Reply #57
60. The rate has remained the same all along...
Those I/O ARMs didn't come with the best rates ever... especially since we had no money down. We did, however buy our rate down by 1/2 a point at the closing to help out that little bit. The only way we had that money is that we demanded so much from the seller in closing costs and the CC were much less than anticipated, so it went towards the rate buy-down.

I agree, 8 years can definitely bring a lot of positive, but my perspective on our government and economy has changed DRAMATICALLY in the last two years. I feel much more informed now than I have ever before. I am scared to think of how long a recovery can take if the onset took so long...

As for the max rate on each reset and LOL... I'd have to pull my loan docs (which I know exactly where they are!!) That's stuff I was aware of, but of course led down the path of oh you can refi, blah... you have 10 years, blah... blah, blah, blah.
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:36 PM
Response to Reply #60
62. Ouch, 100% Loan-to-Value, No Money down, and I assume little to no assets...
The question is should you have qualified for a loan in the first place or do you feel you were snookered?
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:48 PM
Response to Reply #62
65. Well, I truly felt the loan was "do-able" at the time
The issue is that the real estate industry is down quite a bit now, commissions are next to none, and there aren't really any jobs to supplement the income. This isn't just for the mortgage industry as well. The SMW thread posts daily all the layoffs and one can see that the entire country is facing this dilemma. More and more folks are working multiple jobs just to survive; extended family households are becoming more popular; carpooling is more enticing; folks are doing everything they can to save money everywhere possible.
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 04:07 PM
Response to Reply #65
71. But why did you feel compelled to *buy* a house?
As opposed to rent given that your ability to pay was marginal at best. Were rents not cheaper at the time?
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 04:13 PM
Response to Reply #71
73. At the time, my rent was $1600...
the increase in monthly costs to buy a house was not that much more, and considering that I was mid-twenties, recently married, and planning to start a family; I guess maybe I just got carried away.

Please keep in mind, though, that this is (or at least used to be) the American Dream... Why would I think differently if I had grown up with this philosophy for my 25 years on this planet???

Also, please remember that I do live in San Diego. We are known for our outrageous costs of living. You can't find a two bedroom apartment in the ghetto here for under $1000.
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krabigirl Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 04:55 PM
Response to Reply #44
79. Renting isn't all roses, either.
Edited on Thu Jul-24-08 04:56 PM by krabigirl
Especially with kids who are in school. I'm 37, have two kids, and we're renting a house. Well, looks like the owner wants to put her house on the market sometime soon. So, time to find another place to live. And deal with an unknown landlord, or move into an apartment, and have your neighbors complain about your kids all the time (ugh.) Luckily, my kids aren't school-aged yet, so I won't have to worry about changing schools, but where I live, merely changing a street can change what elementary school your kids go to. So, some people like to have stability.

I will be buying next year, even though the bottom won't be here. I plan to stay in the home for 20 years. It will probably go down in value, but hopefully up again in 20 years. (lol) I can't see renting for 5-6 more years, once the kids are in school.
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krabigirl Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 04:57 PM
Response to Reply #23
80. If you can hold the property through the downturn somehow, being upside-down now won't matter.
Edited on Thu Jul-24-08 04:58 PM by krabigirl
Whenever I do buy, I will stay for 20 years. lol, I know that's a long time, but I refuse to buy anything where I plan to move any sooner. (It helps that I hate moving!)
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 05:07 PM
Response to Reply #80
84. I am the same way...
I just hope that things turn for the positive in the near future :)
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Maine-ah Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-25-08 11:40 AM
Response to Reply #6
94. heh, that's what I was thinking
how about those of us who were responsible and got mortgages we could more than afford, and now are looking at possible forclosure in the future because of the shit-ass economy? I'm having a tough time reaching my measly 700 a month mortgage payment. It only gets worse for us as winter is right around the corner.
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ElectricGrid Donating Member (211 posts) Send PM | Profile | Ignore Thu Jul-24-08 09:47 AM
Response to Reply #4
27. Yeah, I love the fact that I have to subsidize your bad mortgage...
even though you likely make more than I do and have a better house. Sucks and I could give a damn about your crappy reverse morgage scams.
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 10:57 AM
Response to Reply #27
30. And good morning to you to...
There really isn't a need to take jabs at folks just because you feel a certain way. I personally don't offer crappy reverse mortgage scams, but thanks for your input.

:eyes:
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snooper2 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 11:24 AM
Response to Reply #4
32. Reverse Mortgage...
The latest and greatest scam for banks to own more property and rob seniors...



http://www.daveramsey.com/etc/askdave/?intContentId=629...

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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 11:39 AM
Response to Reply #32
34. Those are valid concerns, but...
what about the senior that sells their home and can now only afford a condo? Then there's HOA fees and they would be in a smaller place. Most seniors I speak with would prefer to stay in their home that they've lived in for so long.

One example that I know of for a fact is my grandma. She did not go through me, but has done a few RM's. In her defense, she lives on $7-800/month and cannot support the medical costs along with day-to-day expenses. I would much rather let my grandmother live without any money worries and use the equity she has worked so hard to build, rather than wondering if she'll be able to pay the electric bill, water bill, or something else that is a necessity. Not to mention, what will happen to the house and equity when she passes? Yes, it will go to the heirs, but the heirs are entitled to the estate once she passes. The concern that she won't have as much to leave is a little absurd when it's a matter of financial stability and peace of mind or not.

I always explain to my customers personally how the RM works and explain how the balance increases month to month. When they ask my opinion of whether they should do it or not, I again further confirm the neg-am aspects and tell them that it may not be the best thing for them, but if they need the money, they need the money. It's strictly up to them, and I do urge them to discuss with family and friends to make sure they are doing something they are comfortable with.

Should we not try to help the seniors and just require them to go back to work at 80 years old because their retirement savings just dropped considerably due to our weak economy? I think that there are many different situations out there, and the RM does benefit certain folks, while others don't require the benefit. That's where seeking advice really comes into play and also why I fully try and educate them.
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Political Heretic Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 08:04 PM
Response to Reply #3
8. We haven't been "endlesssly" propping up anyone.
unless you mean our "endless" history of bailing out big corporations. As far as the individuals go... this is kind of a surprising and rare occurrence.
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depakid Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jul-23-08 10:59 PM
Response to Reply #8
16. The community development block grants are also a good idea
(which of course is why they were singled out in Bush's veto threat).

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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:58 PM
Response to Reply #16
48. Exactly...
The housing bill is well over 700 pages long and there are some moot points, while there are some very positive points. There's always give and take, but I'm all for helping our society in whole; against helping the top 1%...
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depakid Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:16 PM
Response to Reply #48
54. Libertarian underground would seemingly prefer an economic collapse
If and when that happens, they'll be among the first to whinge that the government didn't do enough to forestall it....
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:21 PM
Response to Reply #54
56. I agree... we're screwed either way...
is Libertarian Underground the old Liberal Underground or a different group?
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:33 PM
Response to Reply #54
61. I didn't realize you were a fan of reagan/bushanomics - borrow and spend.
That's what this bill is and it will line the pockets of Wall Street.
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depakid Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:46 PM
Response to Reply #61
64. I'm a fan of not cutting of our collective noses to spite our faces
Edited on Thu Jul-24-08 03:47 PM by depakid
Not arguing about what policies put America into this position- Republicans AND DINO's know all about that....

Fact is, we're here and the situation requires action, lest it gets out of hand that much faster.

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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:52 PM
Response to Reply #64
67. Dodd and Frank are in Wall Street's pocket...
I'd much rather have a bill that allowed people to return the deed in lieu with no effect on their credit so they can rent and rebuild their savings. Yes some banks will fail and some people will lose their homes. We may also have to add money to the FDIC but we will all be in a better position in the long run. Take the medicine now or let it linger for 10 years.
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depakid Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:53 PM
Response to Reply #67
68. No reasonable person would deny that
Edited on Thu Jul-24-08 03:54 PM by depakid
But allowing the financial system to meltdown in the process isn't what most consider to be "good medicine."
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 04:01 PM
Response to Reply #68
69. It won't melt down completely - it will just contract back to the pre-bubble days.
Yeah, banks will actually require 20% down, lower debt/income ratios, 6-month assets, etc. Our existence has been fueled by cheap credit. The Fed's can't stop credit contraction and housing deflation forever. This is going to happen regardless of how many trillions are borrowed to prop up an anemic economy. To fix the problem we need to quit being a pure service economy and start producing things.
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skoalyman Donating Member (751 posts) Send PM | Profile | Ignore Sat Jul-26-08 01:43 AM
Response to Reply #69
97. the banks wont be doing much business with everyone having bad credit from
this mess.What it did was open up a bottomless pit for folks who got caught up in the housing crash.
They will just join the growing number of the poor,check to check wage earners.Some will even become homeless because there credit will be to bad to qualify to rent a place.
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 05:11 PM
Response to Reply #67
85. I'm confused...
how would allowing people to turn their deeds in with no effect on credit benefit us as a whole? Just thinking out loud, but wouldn't it be better for the banks to take smaller losses and fix things so that people can afford the homes they bought as opposed to making the banks take baths on it all thus causing complete havoc?
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 03:51 PM
Response to Reply #61
66. That might be one side, but...
what about the folks that it will help. There is always a give and take, and at least in this proposal its not all about take, take, take from the public and there is maybe the slightest concern for us less-priveleged.

As for Reagan/Bushanomics... I don't really understand that term, so I would probably have to do a little reading up on it so I can truthfully answer you how I feel. But I do know that I have not borrowed and spent, so...?
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krabigirl Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 05:01 PM
Response to Reply #54
81. Seriously...totally agree with you.
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 01:05 AM
Response to Reply #8
19. No we really have been propping up this fake credit bubble housing market...
Here's a hint: Calculated Risk
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superconnected Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 04:31 PM
Response to Reply #3
75. No. They should have gone after the lenders, not helped them, and
punnished them for the predatory lending to the people.

Attacking the people on this actually is unfair. Most people bought a house the only way they could - by trusting their banks for a loan - gotten through these brokers, and having those loans skyrocket on them and not being offered any other kind of deal to begin with. It was have a house at rates they call or never be able to get a house. Most people cannot save enough to pay for a whole house at once.

It's really lending tactics that are at fault. And the rate cap on loans that was thrown out in the late 70's. They need to put back the rate cap.
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Megahurtz Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-25-08 11:35 AM
Response to Reply #3
93. Agreed. n/t
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ElectricGrid Donating Member (211 posts) Send PM | Profile | Ignore Thu Jul-24-08 09:42 AM
Response to Original message
25. I am in the bottom half of taxpayers and I think this is a terrible
idea. Stupid politicians. I want everyone to look at who voted for this and not for for them next time. I have lived within my means for years. Living in a house that I did and do not really like and is not as big or as nice as I like, but it was within comfortable means for me. Now our incompetent politicos want to subsidize stupid actions. Us smart folks will pay for the ineptness of some. Great. Just great.
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Political Heretic Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 04:04 PM
Response to Reply #25
70. I for one, am glad to live in a country that isn't stingy with its help
Right now I'm living just above the poverty level. I went through bankruptcy last year, and have struggled to keep a tiny apartment and enough food to eat while at the same time trying to continue my education and longer term career goals without completely falling apart.

What I loathe about your attitude is this: people shouldn't have to be perfect to receive compassionate help when they are in trouble. I look at myself, and there were many things about my situation that were not my fault. But as with all people part of the fault for ending in bankruptcy lies with me. I wasn't wantonly negligent, I tried to manage, and some things that happened were beyond my control. But I'm still human, I still made mistakes that were my fault.

Conservatives believe that you must deserve help and they use a standard of perfection in determining who is "deserving." That's not what we do. We operate from a principle of compassion, meaning that we are more inclined to help unless there is simply overwhelmingly compelling reason why we can't responsibly do so.

In this situation, its true I'm sure that people could have been "more perfect" in their decision making about home loans. But we also know that the mortgage market was exceptionally aggressive making pie-in-they-sky assurances to consumers and failing to do their duties to responsibly turn down applicants that clearly couldn't not afford the terms of the loan.

People who are losing there homes should receive any help we can offer, and I don't require that the pass a perfection test first before we try to help them.

You want to cry about your tax dollars going to help some folks who got into trouble, some of which may have been their fault? How instead crying about how much of your tax dollars are wasted on oil subsidies or corporate welfare or the ever expanding "defense" racket, or our endless wars of aggression around the world. Spending some money to help real people out who are in trouble is a good use of MY tax dollars.

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krabigirl Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 05:04 PM
Response to Reply #70
82. Great post. I totally agree. I never hear people crying about their tax dollars going to the war..
or the offense (defense) industry. But help people, OH MY GOD HOW HORRIBLE! ugh. And I'm a "renter" too. I don't like renting, but I don't feel like people should be punished for buying a home at the peak.
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Megahurtz Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-25-08 11:43 AM
Response to Reply #25
95. I'm not happy about it either
I think it's bullshit.

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snooper2 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 11:27 AM
Response to Original message
33. Another fucking bailout...
For all of us who are "responsible" they could have at least told the mortgage companies to do this. Everyone who has a fixed APR and has made payments on time gets their rate dropped 1 point..

But of course not.... :puke:
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Megahurtz Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 02:29 PM
Response to Original message
38. How about
bailing us renters out on our monthly rental bill? :think:

What an unfair and majorly fucked-up "System" we have. :grr:

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Tiberius Donating Member (798 posts) Send PM | Profile | Ignore Thu Jul-24-08 03:23 PM
Response to Reply #38
58. How about bailing out those...
...who lost money in the tech bubble? After all, those DOT COM companies LIED to us and told us they would be profitable! Boo-hoo-hoo.... waaaaaaaaaa

Seriously, though, I don't understand the obsession with keeping an asset class artificially inflated. I say, let the value of houses fall where they belong, and us renters can have a chance to own.
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 05:54 PM
Response to Reply #58
87. I agree about housing prices, but...
the housing bill isn't being designed to further inflate the home values; it is geared towards a revamping of FHA, resecuring Fannie/Freddie and assisting those in or near foreclosure from losing their homes. Another entity to benefit from this bill would be cities in whole. As foreclosures rise, the number of vacant homes rise and thus crime rises and other sorts of negative activity. Housing prices drop even further because nobody is keeping up on the foreclosed properties.
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Megahurtz Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-25-08 11:20 AM
Response to Reply #58
91. Exactly! n/t
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Political Heretic Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 04:08 PM
Response to Original message
72. Boy, aid anyone other than Corporate Persons sure brings out the conservative asshats
Edited on Thu Jul-24-08 04:09 PM by Political Heretic
...masquerading as "progressives."

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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 04:23 PM
Response to Reply #72
74. Is that a f*ck you to all non-homeowners? n/t
Edited on Thu Jul-24-08 04:23 PM by SahaleArm
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Political Heretic Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 04:35 PM
Response to Reply #74
76. No, since I'm a non-home owner. It's a fuck you to people spewing conservative rhetoric.
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 04:38 PM
Response to Reply #76
77. Saying no to borrow and spend is a conservative talking point?
Saying no to a wall street giveaway is a conservative talking point?

Saying no to increasing the debt ceiling is a conservative talking point?

This bill is awful and will have little to no effect other than to socialize losses and privatize profits.
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Political Heretic Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 04:51 PM
Response to Reply #77
78. Funny you have assumed I am directing my comments at you...
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krabigirl Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 05:05 PM
Response to Reply #74
83. You sure do have a complex about being a renter, don't you?
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 05:50 PM
Response to Reply #83
86. Why do you assume I'm a renter? n/t
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 06:00 PM
Response to Reply #86
88. Could it be
because you refer to how great renting is with just about every post in this thread? I do know, however, that you are not a renter, because in one of your postings you did mention that you saved for years and years and did finally buy a home. I would assume it's an easy mis-understanding, and maybe even more so of a mis-understanding from your point since you've been a homeowner for so long now that you might not be so in tune with the current rental issues going on.

Either way, renters do feel the pain as well... my parents were just kicked out of a home that got foreclosed on. They are on Social Security and Veterens Disability Fixed Incomes, and could not afford to move. What did they do, bite the dust and move into a trailer in the middle of the CA desert, another hour from my home. Renters don't necessarily have the best options either right now.

I think it might be safe to assume that our economy is so depressed right now that everybody is feeling the pains; those that maybe prepared themselves (because they predate us youngsters) and those that didn't prepare. Either way, we're here to help and not to say screw you... right? :)
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SahaleArm Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-24-08 06:13 PM
Response to Reply #88
89. No that definitely wasn't me...
Edited on Thu Jul-24-08 06:15 PM by SahaleArm
who said "saved for years and years". I am a homeowner (soon to be a renter) but it's always assumed that "pride of home ownership" is better than renting - this has been propagated by real estate agent and the mortgage industry for years as a ploy to get people to buy homes. If the average person helped by this bill needs a $100k loan modification then $3.9 billion will help 39000 home owners. That's a drop in the bucket compared to what will be needed to modify all failing loans. That $3.9 billion can be used to build public housing to help the elderly, disabled veterans, the homeless, etc. Instead it will go into the pockets of Wall Street.

Paul Krugman: Home Not-So-Sweet Home
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-25-08 10:58 AM
Response to Reply #89
90. Here's some info on the bill for you to read up on...
I truly think this will go to benefit a lot of people including those you've listed above (elderly and veterans at the least; don't know if this will really help the homeless). In that defense; I was able to implement a program with my local farmers market where people donate excess items they have purchased to the San Diego Food Bank, which ultimately reaches the homeless. :)

Housing Bill Has Something for Nearly Everyone: http://www.nytimes.com/2008/07/25/business/25money.html...
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Megahurtz Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-25-08 11:32 AM
Response to Reply #90
92. Misleading headline.
This Bill only helps people owning homes or people that can afford to buy homes. The economy will continue to suck for the rest of us.
I would not call that "something for nearly everyone".

The economy will continue to crash and this Bill will only make it worse. Just watch.

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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-25-08 06:48 PM
Response to Reply #92
96. I would venture to disagree
I say it's better to attempt helping the situation that is causing our country so much grief presently than to just sit back and do nothing. But hey! Thanks for your input!! :)

:sarcasm:
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