Stop The Foreclosures First!

[20score]

The Democrats should pass a bill, immediately, that stops the foreclosures and forces the banks to offer livable rates to those about to lose their homes. At a five or six percent rate, as opposed to a nine or ten percent rate, the banks will still make money, and people about to be foreclosed on will be able to retain their homes. This will help the entire economy.

Then, once this is done, if the Republican’s and the administration still want socialism for billionaires; let them explain to the country, why.

The contrast between the parties will be stark, and unmistakable.

Please, call congress before they cave again.

[Cessna Invesco Palin]

1. How would you suggest the government stop the foreclosures?

And why should those who bought homes they can't afford be rewarded with low mortgage rates while those who can afford the homes they purchased are offered no such benefit?

[20score]

4. It's not homes they can't afford. The interest rates on some of these

are at a rate no one can afford.
As for how - easy, you make a law the banks have to follow.

[Lance_Boyle]

6. Those interest rates were agreed to at closing. Contracts can't be

re-written because one party wakes up one day and realizes it was stupid, greedy, or irresponsible and cannot meet its contract obligations.

[20score]

10. Which side would that be???

[Bake]

27. You can do that as easily as you can bail out the Wall St. pigs.

There is a way to do it without running afoul of the constitution.

Bake

[Cessna Invesco Palin]

8. What Lance said, plus...

The thing you suggest does nothing to solve the problem with mortgage backed securities, which will basically continue to be in a world of shit unless the money from the mortgages comes in at the rate agreed at closing. In effect, the only way you could fix that is to have the government start making up the difference between the agreed rate and the lower rate you've mandated.

[20score]

11. Right now the banks lose hundreds of thousands on a foreclosed home.

At a livable rate, one where the bank still makes money, the difference is negligible compared to a foreclosure. Many people were greedy, but, like Jon Stewart, said 'you want to explain how poor people caused Enron too.'

[Cessna Invesco Palin]

20. That's not how MBSes work

If enough mortgages in the MBS are in default, or being paid at your theoretical lower rate, the *entire* MBS package is effectively in default.

[20score]

32. They won't be in default if they are renegotiated.

[Bonhomme Richard]

2. That move alone would begin to repair the housing market.

Take the influx of new foreclosed homes out of the picture and the market supply would stabilize.

[20score]

26. Thank you for understanding.

[20score]

28. What I was trying to say.

[Lance_Boyle]

3. Wrong move - let the chips fall where they may for the irresponsible

Banks and individuals alike.

I've been paying my mortgage reliably for years - if I hadn't been, I wouldn't expect to be able to keep my house.

[20score]

5. Good for you. But, so what, this effects everyone.

[Lance_Boyle]

7. Being expected to pay deadbeats' mortgages for them effects

everyone, too. I shouldn't have to buy anyone else a house. Period.

[DCKit]

15. Not pay their mortgages, refinance their mortgages.

Keeping another twenty million homes in owners hands and off the foreclosure market is a far better alternative than insuring the profits of Wall Street.

The bonus is that the $700B (at least most of it) will be paid back. The deal Paulson and Bernanke are putting forward doesn't include guarantees or restrictions of any kind. It's a naked giveaway.

[slackmaster]

18. Renegotating to fixed, affordable rates is great

But that should be done by the borrowers and lenders, not FORCED by government.

I'd like to see government provide expert assistance in negotiations, free of charge to the parties.

[DCKit]

25. Shock Doctrine.

The current owners of those mortgages want to sell them at full value to U.S., so they're acting as if they're helpless in the face of the avalanche *they* created.

They simply don't want to lose a dime on their bad investments and, with Paulson and Bernanke in their corner, they look to make a huge profit.

[20score]

36. Exactly!

[Thothmes]

37. I agree that it is better to work to keep them in their homes

but, before refinancing as say 5 or 6 percent fixed rate mortgage, the banks should determine if the individual refinancing that mortgage is capable of making the monthly payments on that mortgage. In addition, I would like to see the law changed to require the initial lender or refinancer to hold that mortgage for at least one third of the life of the mortgage. Fifteen year mortgage, the lender has to hold that paper for five years. Thirty year mortgage, the lender has to hold it for ten years before he can sell it to another insitution. The requirement for the lender to determine if a person can make the payments will probably cost some people their homes. There are folks out there that tried to buy that was to big for their financial
situation. JMO

[slackmaster]

14. Everyone is going to be affected no matter what is done or not done

Have you considered the negative impact of what you are suggesting on the people who hold securities that are made up of those mortgages?

They're not all wealthy individuals or faceless corporations. They include worthy entities like pension funds.

[AzDar]

9. Difficult as it may be ( I have some personal experience with this)

the housing market needs a major correction.

[slackmaster]

17. I agree with AzDar

The "affordability index" must be allowed to come back into a sane level, so regular people with regular jobs can afford to buy homes again.

[20score]

12. I'm done for now, have to work.

[slackmaster]

13. Where would Congress get the authority to unilaterally alter millions of existing valid contracts?

Don't tell me - the Interstate Commerce Clause.

:eyes:

[DCKit]

16. Refinance the mortgages.

[slackmaster]

19. I say government should encorage and facilitate refinancing

Not force it.

[20score]

21. That's where I'm at myself. Just want to stop the slide downward.

Then, in a non-panicked way, start the refinancing. But, you don't just hand the banks 700 billion, and let millions go homeless anyway. That's sure to cause a depression, and it's morally criminal.

[slackmaster]

22. Every foreclosure case is unique - I think individualized intervention is the way to go

The right way to fix this is going to involve a lot of work by skilled, dedicated, patient people. I agree that just handing out a bunch of OUR money is not the thing to do.

Working from the bottom up, helping people keep their homes whenever possible, will help lenders and investors up the food chain if it is done correctly.

[20score]

23. I thought that's what I was implying. But there does have to be an act of

congress to stop the bleeding. The banks have proved they won't do it. (I should never have posted from work, don't have the time for details.) But I stand by my statement that the foreclosures need to be stopped for now, then, if the banks are asking for tax payer money, then they damn well should abide by fair rules. Period.

[20score]

24. I thought that's what I was implying. But there does have to be an act of

congress to stop the bleeding. The banks have proved they won't do it. (I should never have posted from work, don't have the time for details.) But I stand by my statement that the foreclosures need to be stopped for now, then, if the banks are asking for tax payer money, then they damn well should abide by fair rules. Period.

[Javaman]

29. Good luck...

I post on this very topic all the time and I get nothing but flamed.

"they" always say it's impossible to freeze the rates, yet coughing up 700 billion is a piece of cake.

just like with the corporate welfare bill declare a "bank holiday" on interest rates so borrowers AND lenders can catch their breath.

But alas, I got so flamed by this idea that I have taken up residence in a furnace.

Good luck! :)

[20score]

30. LOL. Thanks! But I think you should keep trying. They will catch on.

[punkin87]

31. Okay, I've called!

[20score]

33. Great!

[punkin87]

34. Damn! They are going to sell us out again. We have to call in large numbers!

[20score]

35. That's my fear. And that's their habit.