FDIC Loan Modification Program *Screw the borrower*

[NotCranky]

[quote=davelj]Everyone will win with this and everyone will lose.

The buyers will be stuck with mortgage balances greater than the house is worth (they lose!), but their mortgage will be much lower than it was before (they win!). The investors will take a hit on their loans (they lose!), but they’ll take less of a hit than if the houses were foreclosed on (they win!). The taxpayers will end up funding a big chunk of this (they lose!), but such funding (the “socializing of loss” concept) will help keep us out of a depression (they win!).

Everyone will be unhappy. Yup, sounds like the essence of a perfect compromise to me.[/quote]

Following this win/lose idea. What would be the win/lose factors specific to loan originators and house sales people?

[davelj]

[quote=HLS]Dave,
I know that you know your stuff..

Do you really believe that we are going to actually avoid a depression ??

It’s just being delayed for those that aren’t ready to attend yet, like a meeting that is running a few minutes late, waiting for more to show up.

I’m thinking that the future comparisons will be to the “Greatest Depression” which will be the one of 2007-2016, not the “Great” 1929-1941.

In your example, only their payment will be lower, not their balance.

…..happily ever after. THE END. HLS[/quote]

Yes, I believe we are going to avoid a depression, as defined by a peak-to-trough decline in GDP of 10% or more. If you look at the capacity for the govt. to borrow and stimulate (go back to WW II and you’ll see federal debt to GDP at 122% – right now we’re at about 70%) we’ve got many trillions of dollars of capacity. At very low rates. It gets paid off slowly – with lower corresponding GDP going forward – over the next 10-20 years. Painful, yes. But not the end of the world.

No, in my example, there is a blend of lower rates AND substantial principal reduction. That’s one way in which the lenders are going to lose. They just won’t lose as much as if all of these houses go into foreclosure.

Look, we’re in a serious bind here. Which is not surprising to me or anyone else here. But one thing we have going for us is the experience of Japan and the Great Depression to look back on for lessons of what not to do. Current policy prescriptions are far from perfect, but I will say this: they get marginally better each week. At least the Officialdom is “learning” from each little mistake and taking some marginal corrective action. I believe that we’re going to see a massive globally-coordinated stimulus plan in 2009. The US, Asia, Europe – the whole freakin’ globe. Will it prevent a steep, long recession? Nope. That’s baked into the cake no matter what happens. But if policy actions are handled properly, we should avoid a depression. The tools and capacity are there.

[davelj]

[quote=HLS]Dave,
I know that you know your stuff..

Do you really believe that we are going to actually avoid a depression ??

It’s just being delayed for those that aren’t ready to attend yet, like a meeting that is running a few minutes late, waiting for more to show up.

I’m thinking that the future comparisons will be to the “Greatest Depression” which will be the one of 2007-2016, not the “Great” 1929-1941.

In your example, only their payment will be lower, not their balance.

…..happily ever after. THE END. HLS[/quote]

Yes, I believe we are going to avoid a depression, as defined by a peak-to-trough decline in GDP of 10% or more. If you look at the capacity for the govt. to borrow and stimulate (go back to WW II and you’ll see federal debt to GDP at 122% – right now we’re at about 70%) we’ve got many trillions of dollars of capacity. At very low rates. It gets paid off slowly – with lower corresponding GDP going forward – over the next 10-20 years. Painful, yes. But not the end of the world.

No, in my example, there is a blend of lower rates AND substantial principal reduction. That’s one way in which the lenders are going to lose. They just won’t lose as much as if all of these houses go into foreclosure.

Look, we’re in a serious bind here. Which is not surprising to me or anyone else here. But one thing we have going for us is the experience of Japan and the Great Depression to look back on for lessons of what not to do. Current policy prescriptions are far from perfect, but I will say this: they get marginally better each week. At least the Officialdom is “learning” from each little mistake and taking some marginal corrective action. I believe that we’re going to see a massive globally-coordinated stimulus plan in 2009. The US, Asia, Europe – the whole freakin’ globe. Will it prevent a steep, long recession? Nope. That’s baked into the cake no matter what happens. But if policy actions are handled properly, we should avoid a depression. The tools and capacity are there.

[davelj]

[quote=HLS]Dave,
I know that you know your stuff..

Do you really believe that we are going to actually avoid a depression ??

It’s just being delayed for those that aren’t ready to attend yet, like a meeting that is running a few minutes late, waiting for more to show up.

I’m thinking that the future comparisons will be to the “Greatest Depression” which will be the one of 2007-2016, not the “Great” 1929-1941.

In your example, only their payment will be lower, not their balance.

…..happily ever after. THE END. HLS[/quote]

Yes, I believe we are going to avoid a depression, as defined by a peak-to-trough decline in GDP of 10% or more. If you look at the capacity for the govt. to borrow and stimulate (go back to WW II and you’ll see federal debt to GDP at 122% – right now we’re at about 70%) we’ve got many trillions of dollars of capacity. At very low rates. It gets paid off slowly – with lower corresponding GDP going forward – over the next 10-20 years. Painful, yes. But not the end of the world.

No, in my example, there is a blend of lower rates AND substantial principal reduction. That’s one way in which the lenders are going to lose. They just won’t lose as much as if all of these houses go into foreclosure.

Look, we’re in a serious bind here. Which is not surprising to me or anyone else here. But one thing we have going for us is the experience of Japan and the Great Depression to look back on for lessons of what not to do. Current policy prescriptions are far from perfect, but I will say this: they get marginally better each week. At least the Officialdom is “learning” from each little mistake and taking some marginal corrective action. I believe that we’re going to see a massive globally-coordinated stimulus plan in 2009. The US, Asia, Europe – the whole freakin’ globe. Will it prevent a steep, long recession? Nope. That’s baked into the cake no matter what happens. But if policy actions are handled properly, we should avoid a depression. The tools and capacity are there.

[davelj]

[quote=HLS]Dave,
I know that you know your stuff..

Do you really believe that we are going to actually avoid a depression ??

It’s just being delayed for those that aren’t ready to attend yet, like a meeting that is running a few minutes late, waiting for more to show up.

I’m thinking that the future comparisons will be to the “Greatest Depression” which will be the one of 2007-2016, not the “Great” 1929-1941.

In your example, only their payment will be lower, not their balance.

…..happily ever after. THE END. HLS[/quote]

Yes, I believe we are going to avoid a depression, as defined by a peak-to-trough decline in GDP of 10% or more. If you look at the capacity for the govt. to borrow and stimulate (go back to WW II and you’ll see federal debt to GDP at 122% – right now we’re at about 70%) we’ve got many trillions of dollars of capacity. At very low rates. It gets paid off slowly – with lower corresponding GDP going forward – over the next 10-20 years. Painful, yes. But not the end of the world.

No, in my example, there is a blend of lower rates AND substantial principal reduction. That’s one way in which the lenders are going to lose. They just won’t lose as much as if all of these houses go into foreclosure.

Look, we’re in a serious bind here. Which is not surprising to me or anyone else here. But one thing we have going for us is the experience of Japan and the Great Depression to look back on for lessons of what not to do. Current policy prescriptions are far from perfect, but I will say this: they get marginally better each week. At least the Officialdom is “learning” from each little mistake and taking some marginal corrective action. I believe that we’re going to see a massive globally-coordinated stimulus plan in 2009. The US, Asia, Europe – the whole freakin’ globe. Will it prevent a steep, long recession? Nope. That’s baked into the cake no matter what happens. But if policy actions are handled properly, we should avoid a depression. The tools and capacity are there.

[davelj]

[quote=HLS]Dave,
I know that you know your stuff..

Do you really believe that we are going to actually avoid a depression ??

It’s just being delayed for those that aren’t ready to attend yet, like a meeting that is running a few minutes late, waiting for more to show up.

I’m thinking that the future comparisons will be to the “Greatest Depression” which will be the one of 2007-2016, not the “Great” 1929-1941.

In your example, only their payment will be lower, not their balance.

…..happily ever after. THE END. HLS[/quote]

Yes, I believe we are going to avoid a depression, as defined by a peak-to-trough decline in GDP of 10% or more. If you look at the capacity for the govt. to borrow and stimulate (go back to WW II and you’ll see federal debt to GDP at 122% – right now we’re at about 70%) we’ve got many trillions of dollars of capacity. At very low rates. It gets paid off slowly – with lower corresponding GDP going forward – over the next 10-20 years. Painful, yes. But not the end of the world.

No, in my example, there is a blend of lower rates AND substantial principal reduction. That’s one way in which the lenders are going to lose. They just won’t lose as much as if all of these houses go into foreclosure.

Look, we’re in a serious bind here. Which is not surprising to me or anyone else here. But one thing we have going for us is the experience of Japan and the Great Depression to look back on for lessons of what not to do. Current policy prescriptions are far from perfect, but I will say this: they get marginally better each week. At least the Officialdom is “learning” from each little mistake and taking some marginal corrective action. I believe that we’re going to see a massive globally-coordinated stimulus plan in 2009. The US, Asia, Europe – the whole freakin’ globe. Will it prevent a steep, long recession? Nope. That’s baked into the cake no matter what happens. But if policy actions are handled properly, we should avoid a depression. The tools and capacity are there.

[HLS]

The only way is by government spending then, correct ?
Are there any other options ??

Let’s do a poll on where the national debt will be in 12 months. My guess is 20 trillion.

Will they be able to sell trillions more in T-Bills at <3% ??

Govt will subsidize cars and plasma TV's in every house in the nation.

Forget about healthcare or anything preventative, just spend, spend, spend.

Many people's lives are already in a D.
Forget about the clinical definition.
It's not going go get any better for millions for a very long time.

We may have 20% of population on welfare/food stamps soon. . HLS

[HLS]

The only way is by government spending then, correct ?
Are there any other options ??

Let’s do a poll on where the national debt will be in 12 months. My guess is 20 trillion.

Will they be able to sell trillions more in T-Bills at <3% ??

Govt will subsidize cars and plasma TV's in every house in the nation.

Forget about healthcare or anything preventative, just spend, spend, spend.

Many people's lives are already in a D.
Forget about the clinical definition.
It's not going go get any better for millions for a very long time.

We may have 20% of population on welfare/food stamps soon. . HLS

[HLS]

The only way is by government spending then, correct ?
Are there any other options ??

Let’s do a poll on where the national debt will be in 12 months. My guess is 20 trillion.

Will they be able to sell trillions more in T-Bills at <3% ??

Govt will subsidize cars and plasma TV's in every house in the nation.

Forget about healthcare or anything preventative, just spend, spend, spend.

Many people's lives are already in a D.
Forget about the clinical definition.
It's not going go get any better for millions for a very long time.

We may have 20% of population on welfare/food stamps soon. . HLS

[HLS]

The only way is by government spending then, correct ?
Are there any other options ??

Let’s do a poll on where the national debt will be in 12 months. My guess is 20 trillion.

Will they be able to sell trillions more in T-Bills at <3% ??

Govt will subsidize cars and plasma TV's in every house in the nation.

Forget about healthcare or anything preventative, just spend, spend, spend.

Many people's lives are already in a D.
Forget about the clinical definition.
It's not going go get any better for millions for a very long time.

We may have 20% of population on welfare/food stamps soon. . HLS

[HLS]

The only way is by government spending then, correct ?
Are there any other options ??

Let’s do a poll on where the national debt will be in 12 months. My guess is 20 trillion.

Will they be able to sell trillions more in T-Bills at <3% ??

Govt will subsidize cars and plasma TV's in every house in the nation.

Forget about healthcare or anything preventative, just spend, spend, spend.

Many people's lives are already in a D.
Forget about the clinical definition.
It's not going go get any better for millions for a very long time.

We may have 20% of population on welfare/food stamps soon. . HLS

[Arraya]

If you look at the capacity for the govt. to borrow and stimulate (go back to WW II and you’ll see federal debt to GDP at 122% – right now we’re at about 70%)

Attempts to reframe the argument in terms of only federal debt are red herrings. First because how we measure “GDP” has changed so dramatically over the years that it’s not really possible to accurately compare federal debt over the decades. Second because federal debt is only 20% of the debt pie.

Ultimately whether the debt is held by a town, a state, a corporation or the federal government it is the labor of individual people that pays it off.

[Arraya]

If you look at the capacity for the govt. to borrow and stimulate (go back to WW II and you’ll see federal debt to GDP at 122% – right now we’re at about 70%)

Attempts to reframe the argument in terms of only federal debt are red herrings. First because how we measure “GDP” has changed so dramatically over the years that it’s not really possible to accurately compare federal debt over the decades. Second because federal debt is only 20% of the debt pie.

Ultimately whether the debt is held by a town, a state, a corporation or the federal government it is the labor of individual people that pays it off.

[Arraya]

If you look at the capacity for the govt. to borrow and stimulate (go back to WW II and you’ll see federal debt to GDP at 122% – right now we’re at about 70%)

Attempts to reframe the argument in terms of only federal debt are red herrings. First because how we measure “GDP” has changed so dramatically over the years that it’s not really possible to accurately compare federal debt over the decades. Second because federal debt is only 20% of the debt pie.

Ultimately whether the debt is held by a town, a state, a corporation or the federal government it is the labor of individual people that pays it off.

[Arraya]

If you look at the capacity for the govt. to borrow and stimulate (go back to WW II and you’ll see federal debt to GDP at 122% – right now we’re at about 70%)

Attempts to reframe the argument in terms of only federal debt are red herrings. First because how we measure “GDP” has changed so dramatically over the years that it’s not really possible to accurately compare federal debt over the decades. Second because federal debt is only 20% of the debt pie.

Ultimately whether the debt is held by a town, a state, a corporation or the federal government it is the labor of individual people that pays it off.

[Author]

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