govt intervention

[scaredyclassic]

values dont get driven down further. prices may get driven down further. it still has never been explained to me why low prices are bad for housing. we don’t bum out i a car is cheaper. why s hould a house be different/

[Arraya]

[quote=pri_dk]I think I will need to hear a better argument why banks should be modifying loans. It depends upon the goal.

I see wholesale loan modification as effectively a redistribution of wealth from the responsible to the irresponsible. It doesn’t matter if the reward is deferred, there still is a reward for poor decisions.

And so what if there is foreclosure? Those that didn’t mortgage themselves into a hole will be in a position to buy a foreclosed house and rent it right back to the original homeowner. No one is left homeless and the assets are now being managed by those with better business judgment[/quote]

That’s the essence of the banking industry today, because the whole thing *should* be bankrupt. The people getting loan mods are riding on the back of handouts to the banks. The banks are looking at bottom line and efficiency over market rules. A foreclosure cost like 70K on top of what the losses are. One could also make the argument that the FB is getting mod’ed into another overpriced home when looking at where values *should* be with out the massive government intervention and thus not getting a handout but another bad deal, like when the purchased.

[quote]That’s how capitalism is supposed to work: it rewards those who best know how to allocate the capital.[/quote]

Capitalism never has and never will work like it is supposed to. The distortions in “Capitalism” that we see now are a direct result of of the extreme accumulation and centralization of wealth that Capitalism creates. It seems like our economic history has taken a complete back seat to the economic theory that spawned that history. A system that cannot overcome the problem of monopolization will never be capable of ensuring a “Free Market”. The extreme accumulation of wealth ultimately and intrinsically becomes the distortion within the economy. Wealth is power and that power is the capacity to bend a socio-economic system (to one degree or another) to the will of a select few. Capitalism breeds those who destroy its theorized idealistic state by creating the means to do so. Quite the paradox.

[Arraya]

[quote=pri_dk]I think I will need to hear a better argument why banks should be modifying loans. It depends upon the goal.

I see wholesale loan modification as effectively a redistribution of wealth from the responsible to the irresponsible. It doesn’t matter if the reward is deferred, there still is a reward for poor decisions.

And so what if there is foreclosure? Those that didn’t mortgage themselves into a hole will be in a position to buy a foreclosed house and rent it right back to the original homeowner. No one is left homeless and the assets are now being managed by those with better business judgment[/quote]

That’s the essence of the banking industry today, because the whole thing *should* be bankrupt. The people getting loan mods are riding on the back of handouts to the banks. The banks are looking at bottom line and efficiency over market rules. A foreclosure cost like 70K on top of what the losses are. One could also make the argument that the FB is getting mod’ed into another overpriced home when looking at where values *should* be with out the massive government intervention and thus not getting a handout but another bad deal, like when the purchased.

[quote]That’s how capitalism is supposed to work: it rewards those who best know how to allocate the capital.[/quote]

Capitalism never has and never will work like it is supposed to. The distortions in “Capitalism” that we see now are a direct result of of the extreme accumulation and centralization of wealth that Capitalism creates. It seems like our economic history has taken a complete back seat to the economic theory that spawned that history. A system that cannot overcome the problem of monopolization will never be capable of ensuring a “Free Market”. The extreme accumulation of wealth ultimately and intrinsically becomes the distortion within the economy. Wealth is power and that power is the capacity to bend a socio-economic system (to one degree or another) to the will of a select few. Capitalism breeds those who destroy its theorized idealistic state by creating the means to do so. Quite the paradox.

[Arraya]

[quote=pri_dk]I think I will need to hear a better argument why banks should be modifying loans. It depends upon the goal.

I see wholesale loan modification as effectively a redistribution of wealth from the responsible to the irresponsible. It doesn’t matter if the reward is deferred, there still is a reward for poor decisions.

And so what if there is foreclosure? Those that didn’t mortgage themselves into a hole will be in a position to buy a foreclosed house and rent it right back to the original homeowner. No one is left homeless and the assets are now being managed by those with better business judgment[/quote]

That’s the essence of the banking industry today, because the whole thing *should* be bankrupt. The people getting loan mods are riding on the back of handouts to the banks. The banks are looking at bottom line and efficiency over market rules. A foreclosure cost like 70K on top of what the losses are. One could also make the argument that the FB is getting mod’ed into another overpriced home when looking at where values *should* be with out the massive government intervention and thus not getting a handout but another bad deal, like when the purchased.

[quote]That’s how capitalism is supposed to work: it rewards those who best know how to allocate the capital.[/quote]

Capitalism never has and never will work like it is supposed to. The distortions in “Capitalism” that we see now are a direct result of of the extreme accumulation and centralization of wealth that Capitalism creates. It seems like our economic history has taken a complete back seat to the economic theory that spawned that history. A system that cannot overcome the problem of monopolization will never be capable of ensuring a “Free Market”. The extreme accumulation of wealth ultimately and intrinsically becomes the distortion within the economy. Wealth is power and that power is the capacity to bend a socio-economic system (to one degree or another) to the will of a select few. Capitalism breeds those who destroy its theorized idealistic state by creating the means to do so. Quite the paradox.

[Arraya]

[quote=pri_dk]I think I will need to hear a better argument why banks should be modifying loans. It depends upon the goal.

I see wholesale loan modification as effectively a redistribution of wealth from the responsible to the irresponsible. It doesn’t matter if the reward is deferred, there still is a reward for poor decisions.

And so what if there is foreclosure? Those that didn’t mortgage themselves into a hole will be in a position to buy a foreclosed house and rent it right back to the original homeowner. No one is left homeless and the assets are now being managed by those with better business judgment[/quote]

That’s the essence of the banking industry today, because the whole thing *should* be bankrupt. The people getting loan mods are riding on the back of handouts to the banks. The banks are looking at bottom line and efficiency over market rules. A foreclosure cost like 70K on top of what the losses are. One could also make the argument that the FB is getting mod’ed into another overpriced home when looking at where values *should* be with out the massive government intervention and thus not getting a handout but another bad deal, like when the purchased.

[quote]That’s how capitalism is supposed to work: it rewards those who best know how to allocate the capital.[/quote]

Capitalism never has and never will work like it is supposed to. The distortions in “Capitalism” that we see now are a direct result of of the extreme accumulation and centralization of wealth that Capitalism creates. It seems like our economic history has taken a complete back seat to the economic theory that spawned that history. A system that cannot overcome the problem of monopolization will never be capable of ensuring a “Free Market”. The extreme accumulation of wealth ultimately and intrinsically becomes the distortion within the economy. Wealth is power and that power is the capacity to bend a socio-economic system (to one degree or another) to the will of a select few. Capitalism breeds those who destroy its theorized idealistic state by creating the means to do so. Quite the paradox.

[Arraya]

[quote=pri_dk]I think I will need to hear a better argument why banks should be modifying loans. It depends upon the goal.

I see wholesale loan modification as effectively a redistribution of wealth from the responsible to the irresponsible. It doesn’t matter if the reward is deferred, there still is a reward for poor decisions.

And so what if there is foreclosure? Those that didn’t mortgage themselves into a hole will be in a position to buy a foreclosed house and rent it right back to the original homeowner. No one is left homeless and the assets are now being managed by those with better business judgment[/quote]

That’s the essence of the banking industry today, because the whole thing *should* be bankrupt. The people getting loan mods are riding on the back of handouts to the banks. The banks are looking at bottom line and efficiency over market rules. A foreclosure cost like 70K on top of what the losses are. One could also make the argument that the FB is getting mod’ed into another overpriced home when looking at where values *should* be with out the massive government intervention and thus not getting a handout but another bad deal, like when the purchased.

[quote]That’s how capitalism is supposed to work: it rewards those who best know how to allocate the capital.[/quote]

Capitalism never has and never will work like it is supposed to. The distortions in “Capitalism” that we see now are a direct result of of the extreme accumulation and centralization of wealth that Capitalism creates. It seems like our economic history has taken a complete back seat to the economic theory that spawned that history. A system that cannot overcome the problem of monopolization will never be capable of ensuring a “Free Market”. The extreme accumulation of wealth ultimately and intrinsically becomes the distortion within the economy. Wealth is power and that power is the capacity to bend a socio-economic system (to one degree or another) to the will of a select few. Capitalism breeds those who destroy its theorized idealistic state by creating the means to do so. Quite the paradox.

[DWCAP]

[quote=SK in CV]Another way to look at this.
No argument, but there still is no immediate give away to the homeowner. He simply reverts to exactly the same place he was when he originally bought the house with no money down. And the lender has less a valuable, but performing loan.

I know many wouldn’t be happy with this kind of false reward to buyers who made bad decisions, but it’s what lenders should have been doing for the last year in cases with qualifieed borrowers, modifying loans to current market value of the collateral, rather than foreclosing and flooding the market with properties, driving values down further.

I know why they don’t do it. But they should.[/quote]

Why? Why should they have? Your statement about ‘driving houses down further’ doesnt hold too much water. By just about any reasonable metric housing prices are either ‘fair’ or ‘over’ priced in the majority of the USA, with the possible exception of Detroit which has been on a downwards sprial for 40-50 years now. In SD they are flying off the shelf. So the argument is that banks should have done mass modifications so that prices could have stayed overpriced and the people who would have benifited the most from increasing prices/leverage can also benifit from decreasing prices/leverage too?

Please define the reasons for “should”.

[DWCAP]

[quote=SK in CV]Another way to look at this.
No argument, but there still is no immediate give away to the homeowner. He simply reverts to exactly the same place he was when he originally bought the house with no money down. And the lender has less a valuable, but performing loan.

I know many wouldn’t be happy with this kind of false reward to buyers who made bad decisions, but it’s what lenders should have been doing for the last year in cases with qualifieed borrowers, modifying loans to current market value of the collateral, rather than foreclosing and flooding the market with properties, driving values down further.

I know why they don’t do it. But they should.[/quote]

Why? Why should they have? Your statement about ‘driving houses down further’ doesnt hold too much water. By just about any reasonable metric housing prices are either ‘fair’ or ‘over’ priced in the majority of the USA, with the possible exception of Detroit which has been on a downwards sprial for 40-50 years now. In SD they are flying off the shelf. So the argument is that banks should have done mass modifications so that prices could have stayed overpriced and the people who would have benifited the most from increasing prices/leverage can also benifit from decreasing prices/leverage too?

Please define the reasons for “should”.

[DWCAP]

[quote=SK in CV]Another way to look at this.
No argument, but there still is no immediate give away to the homeowner. He simply reverts to exactly the same place he was when he originally bought the house with no money down. And the lender has less a valuable, but performing loan.

I know many wouldn’t be happy with this kind of false reward to buyers who made bad decisions, but it’s what lenders should have been doing for the last year in cases with qualifieed borrowers, modifying loans to current market value of the collateral, rather than foreclosing and flooding the market with properties, driving values down further.

I know why they don’t do it. But they should.[/quote]

Why? Why should they have? Your statement about ‘driving houses down further’ doesnt hold too much water. By just about any reasonable metric housing prices are either ‘fair’ or ‘over’ priced in the majority of the USA, with the possible exception of Detroit which has been on a downwards sprial for 40-50 years now. In SD they are flying off the shelf. So the argument is that banks should have done mass modifications so that prices could have stayed overpriced and the people who would have benifited the most from increasing prices/leverage can also benifit from decreasing prices/leverage too?

Please define the reasons for “should”.

[DWCAP]

[quote=SK in CV]Another way to look at this.
No argument, but there still is no immediate give away to the homeowner. He simply reverts to exactly the same place he was when he originally bought the house with no money down. And the lender has less a valuable, but performing loan.

I know many wouldn’t be happy with this kind of false reward to buyers who made bad decisions, but it’s what lenders should have been doing for the last year in cases with qualifieed borrowers, modifying loans to current market value of the collateral, rather than foreclosing and flooding the market with properties, driving values down further.

I know why they don’t do it. But they should.[/quote]

Why? Why should they have? Your statement about ‘driving houses down further’ doesnt hold too much water. By just about any reasonable metric housing prices are either ‘fair’ or ‘over’ priced in the majority of the USA, with the possible exception of Detroit which has been on a downwards sprial for 40-50 years now. In SD they are flying off the shelf. So the argument is that banks should have done mass modifications so that prices could have stayed overpriced and the people who would have benifited the most from increasing prices/leverage can also benifit from decreasing prices/leverage too?

Please define the reasons for “should”.

[DWCAP]

[quote=SK in CV]Another way to look at this.
No argument, but there still is no immediate give away to the homeowner. He simply reverts to exactly the same place he was when he originally bought the house with no money down. And the lender has less a valuable, but performing loan.

I know many wouldn’t be happy with this kind of false reward to buyers who made bad decisions, but it’s what lenders should have been doing for the last year in cases with qualifieed borrowers, modifying loans to current market value of the collateral, rather than foreclosing and flooding the market with properties, driving values down further.

I know why they don’t do it. But they should.[/quote]

Why? Why should they have? Your statement about ‘driving houses down further’ doesnt hold too much water. By just about any reasonable metric housing prices are either ‘fair’ or ‘over’ priced in the majority of the USA, with the possible exception of Detroit which has been on a downwards sprial for 40-50 years now. In SD they are flying off the shelf. So the argument is that banks should have done mass modifications so that prices could have stayed overpriced and the people who would have benifited the most from increasing prices/leverage can also benifit from decreasing prices/leverage too?

Please define the reasons for “should”.

[patientrenter]

[quote=paramount]….Will these realtor’s ever stop with the BS?[/quote]

No.

Blah, blah, blah… The bottom is behind us… There are more buyers than sellers…. Buyers have wheelbarrows of cash they want to throw away… It’s a
good time to buy. It’s always a good time to buy.

[patientrenter]

[quote=paramount]….Will these realtor’s ever stop with the BS?[/quote]

No.

Blah, blah, blah… The bottom is behind us… There are more buyers than sellers…. Buyers have wheelbarrows of cash they want to throw away… It’s a
good time to buy. It’s always a good time to buy.

[patientrenter]

[quote=paramount]….Will these realtor’s ever stop with the BS?[/quote]

No.

Blah, blah, blah… The bottom is behind us… There are more buyers than sellers…. Buyers have wheelbarrows of cash they want to throw away… It’s a
good time to buy. It’s always a good time to buy.

[patientrenter]

[quote=paramount]….Will these realtor’s ever stop with the BS?[/quote]

No.

Blah, blah, blah… The bottom is behind us… There are more buyers than sellers…. Buyers have wheelbarrows of cash they want to throw away… It’s a
good time to buy. It’s always a good time to buy.

[Author]

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