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88 Comments
- wonderchemist, on 03/06/2009, -7/+23If the bankers hate it, then I'm for it!
- AManWithNoName, on 03/06/2009, -4/+17House decided this would be the best course of action, after having Foreman and Taob run an MRI on the real estate market, working under the assumption that the market has lupus. After, he proceeded to nail all of Cuddy's office furniture to her ceiling, while giving Wilson unwanted psychological advice.
- inactive, on 03/07/2009, -9/+20Free debt write off for stupid people
The fact is not everyone is supposed to own a home. Go anywhere except Britain and the US and you will find this notion is true. If you can't afford a home, don't buy one. Except in America, that is the American dream. So naturally everyone should have a home, even if the government basically pays for it.
A Bank makes a loan, allowed by government regulators, encouraged by both Democrats and Republicans, and suddenly now they are the bad guys who need to be punished and don't deserve investment return because the government claims they are bad people? - redcolumbine, on 03/06/2009, -6/+16The banks are so out of touch. Would they rather get paid (albeit more slowly) or get stuck with real estate they can't unload?
- lordmike, on 03/07/2009, -1/+8That doesn't help their more "worthy" neighbors, who now have to deal with vacant foreclosures dragging their property values down...
- pacerx, on 03/07/2009, -1/+8Conservatives are angry, news at 11.
- Barackalypse, on 03/07/2009, -7/+14"The American people are sick and tired of Washington forcing taxpayers to pay for those who have been irresponsible."
Mark this day in history, a politician that not only correctly stated what I am feeling, but he actually voted in such a way to make me feel like I have some small amount of representation in Washington. Predictably, he's not actually my Representative, mine are all good little big Government apologists. - PhotoJustin, on 03/06/2009, -0/+6No, it might be Guillain-Barre syndrome. It's always Guillain-Barre syndrome.
- jgzman, on 03/07/2009, -0/+6No. The loans didn't cause this collapse. It's the shuffling of paper which causes money to magically come out. Either fraud is occurring, or that money is coming out of someone's pocket.
I always get worried when an accountant can juggle numbers on paper and more money comes out than went in. Admittedly, I look at it from a matter/energy perspective. I'm aware that money can apparently be 'created' out of thin air, but it worries me. The fact that our economy keeps inflating in a way that the economists describe as 'artificial' and then collapsing seems to bear me out. - Logrusmage, on 03/07/2009, -6/+12If you took out a mortgage you can't afford, you should be homeless now.
Sorry. Less QQ, more common ***** sense. - Marmot, on 03/07/2009, -0/+5How is the government paying for a home here?
This is about a bankruptcy judge having the ability to modify the terms of a loan as part of a personal bankruptcy filing, not subsidizing homeowners. Right now, they can only do this for second / vacation homes.
If the judge reduces the principal owed / interest rate / etc, the government does NOT kick in to cover the difference. The investors / bank will take a loss, but it's one they're going to take anyway, especially if the house goes to auction. - kward711, on 03/07/2009, -1/+6actually its aimed more towards people who lost their jobs and can't pay off their mortages.
- Marmot, on 03/07/2009, -1/+6What if you *could* afford the mortgage when you took it out, but now you've taken a pay cut, or your wife has lost her job? Oh, and the house is now worth about $100,000 less than you owe on it?
It's already hard to sell a home in this market -- they're still overvalued, and now, people are afraid to commit to mortgage payments when they may not have a job in six months. Now, for you to sell your home and get out cleanly, the bank has to agree to write off $100,000 or more in an approved short sale -- something the banks are very slow to approve.
Maybe the thing to do is just take the credit hit, move out and walk away from the home, letting the bank deal with it? After all, if you loaned money to somebody who clearly couldn't afford to pay it back, you should lose that money...right? - fr0mundacheese, on 03/07/2009, -4/+9Fire up the printing press, and push out billions more depreciating U.S. dollars. Keep the snowball rolling
- Autodidaddict, on 03/07/2009, -0/+5fail
- idontlikeyou2, on 03/07/2009, -4/+8Do you honestly that balancing the budget, get rid of the debt will solve all these issues ? Are you really willing to accept the consequences of this fringe libertarian economoic ideology.
- Lomstradamus, on 03/07/2009, -0/+4Yep, thats mortgage fraud dumbass!!
"Blame da dumb folk fo wantin' a house"
You make me sick you ignorant *****! - butterpat, on 03/06/2009, -14/+18Absolutely amazing! A policy that truly benefits homeowners. We're so used to seeing policies that benefit only the banks, that this is almost hard to believe.
- Lomstradamus, on 03/07/2009, -0/+4Oh please, it was your party that created this mess and refused to do anything about it. People got pissed and voted for a change in direction and we have a new president who is NOT going to follow the same lockstep failed course that the Republicans keep chanting.
Will it be perfect? NO, but it will get us out of this mess. - Marmot, on 03/07/2009, -1/+5The debt will be written off by the bank... much like it would be if the home went into foreclosure and was eventually sold at auction.
- lordmike, on 03/07/2009, -1/+5So, you'd rather have your neighbor's house foreclose next to you? BTW, it's not like the "irrisponsible ones" don't take a hit... they still have a bankruptcy on their credit report.
- jgzman, on 03/07/2009, -2/+6And the bank bailouts benefited irresponsible corporations. What's your point?
- sangjmoon, on 03/07/2009, -5/+9What this will do is prolong the financial pain caused by the many bad mortgage loans. Instead of getting over this as fast as possible by just letting the foreclosure process go through, all this is going to do is increase the cost to the economy because most of those redone mortgages are just going to go into default again, and banks are going to loosen their lending later rather than sooner. Politicians really are shortsighted when they try to "help". They end up hurting us far worse in the long run.
- lordmike, on 03/07/2009, -0/+4No, actually, it will force the banks to accept reality... that those property values are lower than they wanted and they just can't ride it out anymore... They will have to take the loss, which will be a smaller loss than a foreclosure...
- cotl, on 03/07/2009, -0/+3It's not about what I would "rather" have. We do not live in nor are we guaranteed a Utopia. The irresponsible ones deserve to take a hit for their actions. I certainly would not expect anyone to to answer for my decisions.
My neighbor has told me in the past that they planned to "grow into their mortgage". What idiotic type of planning is that? It's not as if I expect anyone to do what I wouldn't do (unlike the majority of our politicians) which is live at or below your means and PLAN for the unfortunate and unexpected.
BTW, I do not live in an extravagant home/neighborhood. At best, it would be classified as working middle class. We lived in a crappy apartment for years, working two jobs to save up for a down payment on a home - which certainly not the one of our dreams, but it will do. We do not purchase things we don't NEED, ie: 54" flat screen TV's, brand new cars every two years, expensive designer clothing, $200 purses (like so many of the "unfortunate" seem to carry these days), Sony Play Station etc.
You do realize it is not just all the evil republicans/rethuglicans/neo cons that want keep more of what they work so hard for???? Of course, I expect to continue to be Dugg down because of the group-think mentality that runs rampant. - olenick, on 03/08/2009, -0/+3Unless there's collusion between the banks there won't be "higher prices in the future." As for the higher costs because of the potential for a cram-down: same thing -- people can already go bankrupt after a foreclosure and the bank gets nothing. There's no added risk or cost. The real reason the banks oppose this is it'll force them to mark their worthless notes down from the 5-10 cents/dollar they're "worth" now (that somebody besides the government would pay for them to real market value, which is more like 1-3 cents/dollar.
- dcbebop, on 03/07/2009, -0/+3I disagree partly, and only because of this elitist "not everyone is supposed to own a home". For many people that is a life goal and when the opportunity arose for them to take advantage of it they did. Allbeit this is just one case and there is plenty of supporting evidence of foul play amongst amateur real estate speculators, people who had no capability of affording a mortage, etc, you can't stereotype the entire real estate borrowers group.
So what happens when the house next to you forecloses and your house is, which you've lived in for years, is suddenly worth 100k less because of the average local household price? There are more people affected in this crisis than you think. - zomgflamer, on 03/07/2009, -5/+8uhhh im sorry how are they going to pay for mortages with unemployment going up? Dont feed us *****, it has to be paid no matter what, and how are you going to do it without taxing those that were fiscally responsible and want to buy those homes at a reasonable price.
- cotl, on 03/07/2009, -0/+3NO We need to stop rewarding irresponsible behavior, otherwise where is the incentive for anyone to work hard?
- lordmike, on 03/07/2009, -0/+3This doesn't cost any taxpayer... all it does is empower judges to do what they've been allowed to do for second homes and farmland for decades.
- pacerx, on 03/07/2009, -0/+3Tax cuts?
- Lomstradamus, on 03/07/2009, -1/+4Then you better start asking for Wall Street and the banks to return that $Trillion that was handed over to them before Obama took office buddy!
- Lomstradamus, on 03/07/2009, -2/+5...that your so cool with the government bailouts to the irresponsible idiot banks who gave the loans to the homeowners.
We'll be paying for the irresponsible idiot Bush's Iraq war for so long you'll forget about the economic recovery costs. - cotl, on 03/07/2009, -0/+3It has nothing to do with "worthy" it all about each person choices and the subsequent consequences, good or bad.
- Marmot, on 03/08/2009, -0/+3They're not talking about cramming down the value of the *home*. What they're talking about is modifying the loan, possibly using a principal reduction. In other words, if you owe much more on the mortgage than the home is actually worth, then the judge could reduce the amount you owe on the home (among other things).
Regardless of whether your neighbor bought too much house for their budget... If their house goes into foreclosure and gets sold at auction, the bank is definitely going to take a loss -- much worse than if they were forced to write off a portion of the loan balance. The home will likely sit abandoned during the whole foreclosure process (possibly a year or longer). The lawn will become infested with weeds... the pool will become a murky swamp... the exterior will become dirty / stained... the home will be a potential target for vandalism / crime / squatters / etc. Imagine trying to sell your house with *that* next door... - lordmike, on 03/07/2009, -1/+4Ummm... this one is totally free... no taxpayer involvement at all!
- inactive, on 03/07/2009, -1/+4But impressively floppy.
- Madrigalian, on 03/07/2009, -3/+6This is called price fixing. Instead of letting the market find it's own equilibrium, transparently through natural free market decline, they want to arrest the decline in home values by secret meeting (between judges, owners and lenders in private) and thereby try to prop the values up. This isn't a tough call for the banks. Quietly adjust the mortgages of a few and keep values artificially high (which only prolongs the recovery process) so that they aren't forced to adjust a whole lot more as the housing market actually falls to the values they really should be and the banks (who have been way over charging you for years) lose a whole lot more if the market were allowed to reach it's real and natural equilibrium on it's own... oh yeah and more banks fail instead of being protected for their misdeeds by the Judge.
The result will be higher interest rates for everyone else getting a loan in the future as the banks try to recoup their losses and cover their higher risk of loss as these measures continue to provide a slow bleed to the remaining, still over priced, mortgages that the "responsible" are still forced to pay. And prices on housing remain artificially high and unrealistic for most. Price fixing is what caused the last great depression.
Yes, I know, the free market is evil, evil greedy capitalists are all to blame... it just took the scheming and extortionist methods of a handful of socialist democrats to "redistribute the wealth" of our economy to bring it to it's knees. Welcome to the new USSA.
- Lomstradamus, on 03/07/2009, -1/+3Yeah that will help the economy...dumbass!
- Lomstradamus, on 03/07/2009, -3/+5Wow you get a gold start for repeating Hannity/Limbaugh talking points.
- olenick, on 03/08/2009, -0/+2Enjoy the junkies who move into the house next door -- you'll have earned them.
- lead2thehead, on 03/07/2009, -2/+4...until you need a loan and can't get one.
- cotl, on 03/07/2009, -1/+3"What if you *could* afford the mortgage when you took it out, but now you've taken a pay cut, or your wife has lost her job? Oh, and the house is now worth about $100,000 less than you owe on it?"
You live UNDER your means and save the difference. Basically, you PLAN for the unexepected and unfortunate, - Marmot, on 03/08/2009, -0/+2This new law does not apply to mortgages made after January 2009. In other words, there is no way to underwrite a new loan, sell it, and then mark it down after selling it off to the investors.
All this law does is give the judge the option of forcing a loan modification by reducing the interest rate / principal owed, or possibly other methods. Consider that the bank is not going to see their money back anyway, especially if the home goes into foreclosure. Barring a surprise housing recovery, the bank and investors have already lost the money -- they just haven't realized that loss yet.
As for these bums who procured a McMansion with a no-money-down / no-income-verification mortgage, what idiot thought it was a good idea to loan them the money in the first place? Seriously -- you're going to loan somebody $700K and you're not even going to bother checking to see if they can afford to pay it back, because you can charge them a higher interest rate? That is clearly a risky loan to make, especially if home values don't go up. If you or I make bad investments, we lose money. So it should be with the investors who made risky loans. - thegreatgazoo, on 03/07/2009, -0/+2I'm kind of torn on this.
It's basically doing a short sale back to the original buyer. Mechanically, it is probably easier for the banks, because instead of having to kick the people out, and sell it to someone else for a loss.
On the other hand, it does benefit the irresponsible homeowners. OTOH, it also makes it easier for banks too in that they don't have to hold the inventory.
However, this will make mortgages more expensive for responsible people. - namelessXsilent, on 03/07/2009, -0/+2It's never Lupus
- shiprou, on 03/07/2009, -0/+2Why are poor ideas defended with older poor ideas?
- jeffiek, on 03/07/2009, -2/+4Benefits SOME homeowners. HURTS others.
Governments only redistribute wealth, they don't create it.
The overwhelming majority of homeowners are making their mortgage payments on time. There's even a lot that have no mortgage at all. They're the ones that will be hurt. They will have to pick up the tab. How is that fair?
Same with banks, the good will pay for bailing out the bad. - Marmot, on 03/07/2009, -0/+2Sure, but those savings will only hold out for so long... and for some reason, Americans are really bad at saving money to begin with.
Maybe we should just let all of America go homeless, except for the responsible ones?
Why not just use those savings to pay first/last months rent on a less expensive place, and dump the house on the bank? -
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