No ‘magic bullet’ in Obama housing relief plan
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I found some info on the details of the plan.
President Obama's foreclosure plan:
• Remove restrictions on Fannie Mae and Freddie Mac that prohibit the institutions from refinancing mortgages they own or have guaranteed when more is owed on a home than it is worth. The White House says this could reduce monthly payments for up to 5 million homeowners.
• Create incentives for lenders to modify subprime loans at risk of default or foreclosure. For lenders that agree to reduce rates to levels borrowers can afford, the government will make up part of the difference between the old monthly payment and the new payment. Participating lenders will be required to cut payments to no more than 31 percent of a borrower's income. Up to 4 million homeowners could benefit.
• Keep mortgage rates low for millions of middle-class families seeking new mortgages. Using money already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to buy Fannie and Freddie mortgage-backed securities to maintain stability in the marketplace. The department will provide up to $200 billion in capital for this purpose.
• Pursue reforms to help families avoid foreclosure. The administration will continue to support changing bankruptcy rules so judges can reduce mortgages on primary homes to their fair market value, as long as the borrower sticks to a court-ordered repayment plan. As part of the $787 billion stimulus package that Obama signed into law on Tuesday, the administration will award $2 billion in grants to communities experimenting with innovative ways to prevent foreclosures.
It's not as bad as you all make it out to be. It's not as if they are giving people free houses.
Also, the plan will not rescue investors, reckless borrowers who took out more than they could afford to repay or dishonest lenders.
OMG...
• Remove restrictions on Fannie Mae and Freddie Mac that prohibit the institutions from refinancing mortgages they own or have guaranteed when more is owed on a home than it is worth. The White House says this could reduce monthly payments for up to 5 million homeowners.
so, wasn't fannie and freddie responsible, in large part, for loaning money to those that weren't qualified? deregulation led to this mess, and they're gonna deregulate F&F again?
un-xxxxing-believable!!
• Create incentives for lenders to modify subprime loans at risk of default or foreclosure. For lenders that agree to reduce rates to levels borrowers can afford, the government will make up part of the difference between the old monthly payment and the new payment. Participating lenders will be required to cut payments to no more than 31 percent of a borrower's income. Up to 4 million homeowners could benefit.
trying to fix the mess that was created by lowering interest rates? why is the fed needed to mandate something the market used to regulate?
• Keep mortgage rates low for millions of middle-class families seeking new mortgages. Using money already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to buy Fannie and Freddie mortgage-backed securities to maintain stability in the marketplace. The department will provide up to $200 billion in capital for this purpose.
so after deregulating F&F, they're guaranteeing to buy any other volitile securities.....smells like apple pie....
• Pursue reforms to help families avoid foreclosure. The administration will continue to support changing bankruptcy rules so judges can reduce mortgages on primary homes to their fair market value, as long as the borrower sticks to a court-ordered repayment plan. As part of the $787 billion stimulus package that Obama signed into law on Tuesday, the administration will award $2 billion in grants to communities experimenting with innovative ways to prevent foreclosures.
oh boy....
It's not as bad as you all make it out to be. It's not as if they are giving people free houses.
Also, the plan will not rescue investors, reckless borrowers who took out more than they could afford to repay or dishonest lenders.
should i go on? gov't doesn't learn its lesson.....
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Where's your outrage at the Bankers who got billions of dollars in public money and awarded themselves hundreds of millions of dollars in bonuses?
I suppose they deserve it because they went to college. Even though they ran their companies into the ground and caused this whole mess.
Where's your outrage at the Bankers who got billions of dollars in public money and awarded themselves hundreds of millions of dollars in bonuses?
I suppose they deserve it because they went to college. Even though they ran their companies into the ground and caused this whole mess.
You mean even though the Libs wrote legislation to force banks to lend to high risk borrowers in the first place? Yeah, them evil CEOs belong in jail- not kidding. I own a few stocks, and believe me every time a vote comes up on limiting executive pay, I'm all for it. Too bad the fat cats on the board with their $$$millions in stock options can outvote tens of thousands of us peons.
That aside, my point is the fiscally responsible borrowers are getting screwed. I want a rebate on the mortgage I paid off!!! I deserve it!!!
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""QUOTE
• Pursue reforms to help families avoid foreclosure. The administration will continue to support changing bankruptcy rules so judges can reduce mortgages on primary homes to their fair market value, as long as the borrower sticks to a court-ordered repayment plan. As part of the $787 billion stimulus package that Obama signed into law on Tuesday, the administration will award $2 billion in grants to communities experimenting with innovative ways to prevent foreclosures.
oh boy...."""
The classic Democratic solution- just throw money at a problem, and it will go away. Where's the guarantee said borrowers will stick to the repayment plan? First Food Stamps, now House Stamps. What's next Mr. Obama Car Stamps? So people in danger of defaulting on their car loans can still drive to work?
As was pointed out in another article, we just borrowed in one fell swoop more money than the US did in the first 170 years of it's existence- borrowing that financed the Civil War, and a few others. Those who think the bill is never going to come due are out of touch with reality. I'm deeply concerned at some time we're going to solve the problem by hyperinflating the currency- and pay everyone off with money not worth the paper it's printed on.
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good god the lack of understanding of economics and the idea of "free" money is astounding.
1. THEY ARE NOT TAKING YOUR MONEY.. This is called DEFICIT SPENDING meaning loaning against the value of our currency and economic system.
2. FANNIE AND FREDDIE DONT LEND MONEY!! They are basically INSURANCE companies.
3. This is NOT about rewarding bad financial habits and decisions, this is about Market forces that need to be corrected before we slam into a full depression. Anyone here watching their 401k drop? WE ARE INTERCONNECTED financially.
Stopping widespread foreclosures helps slow down real estate value decreases EVERYWHERE, which also helps Banks operate with more profit and cash on hand because foreclosure takes them out of cash for usually at least 1-2 years while they liquidate the asset that normally pays them something monthly. It also stops adding more toxic debt to their portfolios which means they contract CREDIT TO ALL ENTERPRISES.
Our economy is BASED ON CREDIT.. we need to to operate on the market and in daily business. I am not talking credit cards but BUSINESS credit and other forms. Falling housing values due to uncontrolled foreclosures kills construction and purchases because it creates a self feeding negative feedback cycle that spirals downward.
All of this leads to NO market confidence domestically and internationally... The market is basically like a big popularity poll that needs popular opinion to be positive in order to foster more people who think and hope they will make money if they put money into it.
This is about slowing down a negative feedback cycle so Banks and other institutions can loosen credit and help restore market confidence which then leads to investment/expansion meaning JOBS AND MONEY.
This is not about politics and political ideology at this point, this is about BASIC economics and what needs to be done to restore credit cash flow and market confidence.
Good for you if you paid your mortgage, you helped positive cash flow and net value for the banks, you need to get used to the idea we are all interconnected economically and without market confidence in the first place fostering investment the bank would not have had the money to loan to you for that house. INvestment can mean confidence and profit but conversly also mean possible loss. We are in a self feeding cycle of lack of confidence combined with massive loss which if not stopped WILL lead us into a DEPRESSION.
Obama is not "Deregulating" Fannie and freddie by adding and adjusting lending guidelines or infusing them with captial so they can insure these loans FOR Future possible profit. Thats a ridiculous and completely incorrect assessment.
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In other words like Obama said to Joe the Plumber, Sev is saying "share the wealth", ROFLMAO!
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what dont you understand Diehard... They are not spending your tax contribution... they are BORROWING AGAINST our currency and economic system.
ANYone who uses phrases to define the stimulas and other tactics the admin is using like "share the wealth" are showing their complete ignorance in basic macro economics.
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good god the lack of understanding of economics and the idea of "free" money is astounding.
1. THEY ARE NOT TAKING YOUR MONEY.. This is called DEFICIT SPENDING meaning loaning against the value of our currency and economic system.
2. FANNIE AND FREDDIE DONT LEND MONEY!! They are basically INSURANCE companies.
3. This is NOT about rewarding bad financial habits and decisions, this is about Market forces that need to be corrected before we slam into a full depression. Anyone here watching their 401k drop? WE ARE INTERCONNECTED financially.
Stopping widespread foreclosures helps slow down real estate value decreases EVERYWHERE, which also helps Banks operate with more profit and cash on hand because foreclosure takes them out of cash for usually at least 1-2 years while they liquidate the asset that normally pays them something monthly. It also stops adding more toxic debt to their portfolios which means they contract CREDIT TO ALL ENTERPRISES.
Our economy is BASED ON CREDIT.. we need to to operate on the market and in daily business. I am not talking credit cards but BUSINESS credit and other forms. Falling housing values due to uncontrolled foreclosures kills construction and purchases because it creates a self feeding negative feedback cycle that spirals downward.
All of this leads to NO market confidence domestically and internationally... The market is basically like a big popularity poll that needs popular opinion to be positive in order to foster more people who think and hope they will make money if they put money into it.
This is about slowing down a negative feedback cycle so Banks and other institutions can loosen credit and help restore market confidence which then leads to investment/expansion meaning JOBS AND MONEY.
This is not about politics and political ideology at this point, this is about BASIC economics and what needs to be done to restore credit cash flow and market confidence.
Good for you if you paid your mortgage, you helped positive cash flow and net value for the banks, you need to get used to the idea we are all interconnected economically and without market confidence in the first place fostering investment the bank would not have had the money to loan to you for that house. INvestment can mean confidence and profit but conversly also mean possible loss. We are in a self feeding cycle of lack of confidence combined with massive loss which if not stopped WILL lead us into a DEPRESSION.
Obama is not "Deregulating" Fannie and freddie by adding and adjusting lending guidelines or infusing them with captial so they can insure these loans FOR Future possible profit. Thats a ridiculous and completely incorrect assessment.
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what dont you understand Diehard... They are not spending your tax contribution... they are BORROWING AGAINST our currency and economic system.
ANYone who uses phrases to define the stimulas and other tactics the admin is using like "share the wealth" are showing their complete ignorance in basic macro economics.
what don't you understand Diehard... They are not spending your tax contribution... they are BORROWING AGAINST our currency and economic system.
Anyone who uses phrases to define the stimulus and other tactics the admin is using like "share the wealth" are showing their complete ignorance in basic macro economics.
OK, thanks Sev for clarifying that. I will admit that I'm not an economist
, and I was confused about the whole thing. I'm just a retired Military guy with an Associates Degree in Criminal Justice. I can be an a---hole a lot of times, but usually because I'm being "baited" by the super intelligent people. Thanks again, and peace. -
Lets take a look here, 9% of homeowners are in default.
If I am getting this right?
What the plan is for the homeowner in default will file bankruptcy and then tell the judge what he or she can pay and the banks will have to make an adjustment. while the otheres who have not fallen upon hard time the other 91% will have to pay higher intrest to cover those who are in default. That would be those with a variable intrest rate.
Then why the 275 Billion who gets that money?
And if this money is going to be given to the lending institution to shore up bad debt, then will they be required to pay it back to the Fed?
And what happens if the 9% will continue not to pay?
I know that there are families who are hit with unemployment but there again there those who are just a bad risk.
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what dont you understand Diehard... They are not spending your tax contribution... they are BORROWING AGAINST our currency and economic system.
ANYone who uses phrases to define the stimulas and other tactics the admin is using like "share the wealth" are showing their complete ignorance in basic macro economics.
what dont you understand Diehard... They are not spending your tax contribution... they are BORROWING AGAINST our currency and economic system.
ANYone who uses phrases to define the stimulas and other tactics the admin is using like "share the wealth" are showing their complete ignorance in basic macro economics.
Yeah, and the BORROWING AGAINST is what scares me. Our friends in Washington are acting like the repayment will never come due. I believe in the entire history of the world, no nation has dug itself in a hole as deep as we're in, and ever come out unscathed. I would wager just the interest on the national debt is already more than the GNP of say 50% of the nations in the world.
Thanks to the ability to print money- Uncle Sam can pay everyone off to the last penny- but the end result won't be very pretty.
EDIT Gee, I was conservative. That $480 billion interest on the National Debt in '08, soon to be way more than that & only kept in check by the Fed keeping interest rates low gave me quite a surprise when I checked it against the world's countries GDP. Seems loaning money to Uncle Sam is the world's 25th biggest economy- give or take a few slots.
You can build a hell of a lot of bridges and roads with $480 billion dollars, instead of shipping half of it to China and Mid East Oil Sheiks in interest payments. Nah- that can't possibly be a drag on our economy- or could it? Shades of Howard Beale in the movie "Network"- except this time it's for real. "They're going to buy us out with our own money." It's happening already. Abu Dhabi essentially is going to buy a controlling interest in AMD, and there's several other examples. What happens if the Chinese get POed and decide to cash in their almost $1 trillion in IOUs? Fer instance, we borrowed money from the Chinese so we could buy the $hundreds of millions worth of set-top digital converters (that they made) the FCC wants the 'po folk to have, & then paid 'em back with their own money!!! Now there's some creative financing for ya.
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I find it incredulous that lib Dems in Congress wailed about the terrible deficit, but now that
Obama is in there...
"duh... what deficit?"
"who cares, big deal"
"what, me worry?"
"don't worry, be happy"
So, in conclusion, being honest with consistent VALUES went out the window long ago...
Then, "the bad risk poor have a right to buy homes, or you're racist"
Then, "the bad Republicans don't care if you can't pay your mortgages, we'll bail you out"
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hoorta I have a problem with defecit spending, unfortunately I have a bigger problem with us heading into a depression.
The government is acting correctly in being the player who is bigger than business and the market by acting to RESTORE confidence and enact legistlation and funds to stop the FREEFALL.
How much is Iraq and Afghanistan costing us? OVER 2 TRILLION dollars and counting.... over a CRIMINAL ACT LIKE THE OKLAHOMA CITY BOMBING.
We did not act or spend the same way to deal with domestic criminals.... That figure is not even counting the oil inflation due to instability.
The Repblicans and Bush screwed up..... This is just now a massive overcorrection due to their steps toward deregulation of insurance and banking along with a overreaction to 9-11.
At least this is going to be spent domestically and stop yourself the dems want the funds used for materials bought from Domestic companies... Seems pretty smart to me.
You want to have everyone in the nations retirements accounts and 401k destroyed? what would that do..... How would you solve this problem....
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Sev, I can't believe you are comparing 9/11 to the Oklahoma City bombing. That is just crazy. Do you really think the two compare? Give me a break.
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I find it incredulous that lib Dems in Congress wailed about the terrible deficit, but now that
Obama is in there...
"duh... what deficit?"
"who cares, big deal"
"what, me worry?"
"don't worry, be happy"
So, in conclusion, being honest with consistent VALUES went out the window long ago...
Then, "the bad risk poor have a right to buy homes, or you're racist"
Then, "the bad Republicans don't care if you can't pay your mortgages, we'll bail you out"
I find it incredulous that lib Dems in Congress wailed about the terrible deficit, but now that
Obama is in there...
"duh... what deficit?"
"who cares, big deal"
"what, me worry?"
"don't worry, be happy"
So, in conclusion, being honest with consistent VALUES went out the window long ago...
They had to reshuffle their priorities to hedge against heading into another depression.
Maybe this is crazy talk, and I'm just thinking out loud here, but maybe prioritizing spending money on our OWN country to hedge against depression is a TAD different than wildly spending billions of dollars in Iraq to find Dubya Em Deez.
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hoorta I have a problem with defecit spending, unfortunately I have a bigger problem with us heading into a depression.
The government is acting correctly in being the player who is bigger than business and the market by acting to RESTORE confidence and enact legistlation and funds to stop the FREEFALL.
How much is Iraq and Afghanistan costing us? OVER 2 TRILLION dollars and counting.... over a CRIMINAL ACT LIKE THE OKLAHOMA CITY BOMBING.
We did not act or spend the same way to deal with domestic criminals.... That figure is not even counting the oil inflation due to instability.
The Repblicans and Bush screwed up..... This is just now a massive overcorrection due to their steps toward deregulation of insurance and banking along with a overreaction to 9-11.
At least this is going to be spent domestically and stop yourself the dems want the funds used for materials bought from Domestic companies... Seems pretty smart to me.
You want to have everyone in the nations retirements accounts and 401k destroyed? what would that do..... How would you solve this problem....
hoorta I have a problem with defecit spending, unfortunately I have a bigger problem with us heading into a depression.
The government is acting correctly in being the player who is bigger than business and the market by acting to RESTORE confidence and enact legistlation and funds to stop the FREEFALL.
How much is Iraq and Afghanistan costing us? OVER 2 TRILLION dollars and counting.... over a CRIMINAL ACT LIKE THE OKLAHOMA CITY BOMBING.
We did not act or spend the same way to deal with domestic criminals.... That figure is not even counting the oil inflation due to instability.
The Repblicans and Bush screwed up..... This is just now a massive overcorrection due to their steps toward deregulation of insurance and banking along with a overreaction to 9-11.
At least this is going to be spent domestically and stop yourself the dems want the funds used for materials bought from Domestic companies... Seems pretty smart to me.
You want to have everyone in the nations retirements accounts and 401k destroyed? what would that do..... How would you solve this problem....
"Those that don't remember the past are doomed to repeat it." We didn't learn from Vietnam we can't be the world's traffic Cop. I hope Obama's been reading up on what went wrong in the Weimar Republic back in the 1920's.
I'm not an economist. Paul Krugman he of the Nobel Prize in that field- has Obama's full attention. PK seems to think we can spend our way back to prosperity. My gut feeling says he's wrong. Nothing personally I can do about it- we're already heading down that road. Logic tells me what goes for micro economics, holds for macro too. You keep borrowing endlessly, you're going to reach a point where you no longer can afford to make the interest payments on your debt service. And as I said earlier, those US interest payments are the world's 25th biggest economy already. Uncle Sam has his ace in the hole there- his printing press, and right now I don't see any viable alternatives to him cranking it up at warp speed.
T posted that other article about Fannie & Freddie, and the Asian markets aren't biting. We're a debtor nation, and effectively we just got downgraded to junk bond status. Ain't that just special. If China should happen to demand repayment of Uncle Sam's IOUs in hard assets instead of paper, we're dead in the water my friend.
As to there being a real live Depression, I'd put the odds at 50-50, and rising fast- regardless of what Obama & Co. do. Regarding the 401s and retirement accounts, if you're in the Boomer Generation (and put me in that category) they're ALREADY destroyed. Unless there's a miracle economic recovery, anyone within 10 years of retirement will never make up in the potential loss of compounding the amount their funds tanked by- they might get back to where they were- with a little bit extra. If you didn't notice, unless you were totally in cash- it didn't matter what you were invested in- you got seriously spanked. Those just a year or two from retirement that were in 2010 lifecycle funds- which by all rights should have been really conservative, got especially blasted. Those funds lost anywhere from 20 to 30% of their assets. Instead of retiring to Hawaii, they'll have to use Google Earth to take a virtual trip there.
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hoorta you are forgetting one MAJOR thing, WE are the CONSUMER for China, they crash if we crash . The interest and investment into our Country is So they can be a industrial age economy. They are tied to us like Siamese twins and their Government controlled Currency and protectionist laws are why We cant compete with their manufacturing cost or sell anything to them.
Macro international economics between nations dont work like small business or personal micro economics because of nations import/export laws plus currency and market influences between different exchanges.
Yes we are borrowing against ourselves but the 2Trillion dollar cost of the 9-11 decisions along with Republican deregulating the insurance/banking and energy industries did this to us in the first place. Now all of the "conservatives" are up in arms over what their party and Laissez faire principles caused in the first place.
IT IS WITHOUT A DOUBT REPUBLICAN LAISSEZ FAIRE PRINCIPLES AND BUSH OVERREACTION PREDETERMINED IRAQ WAR AGENDA WHICH CAUSED THIS.
Yes Diehard Oklahoma City and 9-11 are the same, criminal organizations/groups made attacks against economic and government targets not NATIONS.
Where is Osama again? Oh thats right Al Qaueda ( a criminal group with religous justification) are still operating and free. Pretty much just like our own Mafia's. You cant kill crime and wage a "war" on a TACTIC. Stupid slogans people buy into. How is the "WAR on drugs" going have we won that war on a commodity yet? Dumb.
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Strongly disagree with your analysis, but opinions are like you know what.
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hoorta you are forgetting one MAJOR thing, WE are the CONSUMER for China, they crash if we crash . The interest and investment into our Country is So they can be a industrial age economy. They are tied to us like Siamese twins and their Government controlled Currency and protectionist laws are why We cant compete with their manufacturing cost or sell anything to them.
Macro international economics between nations dont work like small business or personal micro economics because of nations import/export laws plus currency and market influences between different exchanges.
Yes we are borrowing against ourselves but the 2Trillion dollar cost of the 9-11 decisions along with Republican deregulating the insurance/banking and energy industries did this to us in the first place. Now all of the "conservatives" are up in arms over what their party and Laissez faire principles caused in the first place.
IT IS WITHOUT A DOUBT REPUBLICAN LAISSEZ FAIRE PRINCIPLES AND BUSH OVERREACTION PREDETERMINED IRAQ WAR AGENDA WHICH CAUSED THIS.
Yes Diehard Oklahoma City and 9-11 are the same, criminal organizations/groups made attacks against economic and government targets not NATIONS.
Where is Osama again? Oh thats right Al Qaueda ( a criminal group with religous justification) are still operating and free. Pretty much just like our own Mafia's. You cant kill crime and wage a "war" on a TACTIC. Stupid slogans people buy into. How is the "WAR on drugs" going have we won that war on a commodity yet? Dumb.
hoorta you are forgetting one MAJOR thing, WE are the CONSUMER for China, they crash if we crash . The interest and investment into our Country is So they can be a industrial age economy. They are tied to us like Siamese twins and their Government controlled Currency and protectionist laws are why We cant compete with their manufacturing cost or sell anything to them.
Macro international economics between nations dont work like small business or personal micro economics because of nations import/export laws plus currency and market influences between different exchanges.
Yes we are borrowing against ourselves but the 2Trillion dollar cost of the 9-11 decisions along with Republican deregulating the insurance/banking and energy industries did this to us in the first place. Now all of the "conservatives" are up in arms over what their party and Laissez faire principles caused in the first place.
IT IS WITHOUT A DOUBT REPUBLICAN LAISSEZ FAIRE PRINCIPLES AND BUSH OVERREACTION PREDETERMINED IRAQ WAR AGENDA WHICH CAUSED THIS.
Yes Diehard Oklahoma City and 9-11 are the same, criminal organizations/groups made attacks against economic and government targets not NATIONS.
Where is Osama again? Oh thats right Al Qaueda ( a criminal group with religous justification) are still operating and free. Pretty much just like our own Mafia's. You cant kill crime and wage a "war" on a TACTIC. Stupid slogans people buy into. How is the "WAR on drugs" going have we won that war on a commodity yet? Dumb.
So, who forced the banks to lend money to anyone who could fog a mirror? The Conservatives? Um, no. "Let us put you in a house you can't afford, regardless of your credit rating."
You can't have it both ways- borrowing to finance a war, or borrowing to bail out bad debt is still borrowing. You mean China can't sell their stuff elsewhere? And they won't be nearly as hard hit as the US- they're net exporting, we're sending money overseas as fast as we can print it, and now it's getting to the point we're literally getting bought out by foreign companies with the money we sent them. I'll agree, if the US tanks, we take the rest of the world down with us. It won't be a US depression, it will be a world wide depression- we saw that already with banks in Iceland having trouble.
I could say the housing crash in essence is no different than the infamous tulip bulb crash in Holland way back when, or the Beanie Baby Craze. A commodity got bid up to stupid levels, (with speculators betting there was no end in sight ) and now there's a big correction going on. Har, har- not learning from history? The Tokyo real estate crash wasn't exactly 100 years ago. Put the Japanese economy in the dumper for a decade. That's where we differ- you happen to think the government can fix the problem better than free market forces can.
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