- This topic has 9 replies, 7 voices, and was last updated 15 years, 6 months ago by HLS.
September 18, 2007 at 9:13 PM #10338
September 18, 2007 at 9:27 PM #85120luxuryglowParticipant
On my way home, i overheard on the radio something about foreclosure amnesty… can someone explain this issue?
September 19, 2007 at 8:38 AM #85171LookoutBelowParticipant
Its a great big NADA….re-election smoke being blown here…..watch what they DO…..not what they SAY…..maybe 3% of screwed homeowners would actually benefit from this silliness …..This means nothing
September 19, 2007 at 10:41 AM #85193
I dunno lookout….
There is a HUGE attempt to confuse the general population about what is happening, on the pretext of saving the little guy. If they do raise limits, it’s a #@(&^$! BAILOUT that will be at taxpayer’s expense….
Haven’t heard it called “amnesty” but in many cases the foreclosure decision was helped by the fact that the borrower owes more on the house than it is worth, can’t sell it for what they owe, better to walk away anyway.
What is the lender going to do with it ?, other than sell it for a loss and spend a pile of money in the process.
Real etstate agents get commissions for selling foreclosures too.
The govt AND lender would rather keep people buried in an overpriced home on the guise of “we want to help you” so keep paying your lender… (If the home was worth more, they wouldn’t be so willing to help) Call it amnesty, whatever, it sounds better than BAILOUT.
SO, raise the limits so they can keep a Californian buried and saddled with $600K worth of debt and interest payments, in a house with no equity. What exactly are you saving if you have Zero or negative equity ??
THE ANSWER is to allow foreclosures as necessary. We need a free market without intervention. Let the people who bought and couldn’t afford it know that it WASN’T an OK thing to do, and you aren’t going to get bailed out.
Let the prices fall until supply and demand kicks in, so those that KNEW they couldn’t afford to buy in the past and waited are rewarded with lower prices.
And if they REALLY wanted to help the buried homeowners , they would let the foreclosures happen, and the guy that owes $600K today can go rent for a few years, save up some money, and buy a house in the same neighborhood he has today (that he cannot afford today) for $300K and owe less at that time and still own a house. (probably wont save any money, that was humor)
Please tell me which is better for the govt protecting the system from collapsing… and which scenario is REALLY better for the borrower ?
The govt is (or should be) embarrassed, ashamed and scared, among other things.
The time for them to intervene isn’t in 2007, it was in 2002 when the 100% financing started.
THAT was the time for them to butt in and require a down payment.
Even with cheap interest rates, I can assure you that market would have never exploded like it did.
There would be happy homeowners today and there would be lots of tenants for landlords just like it supposed to be.
September 19, 2007 at 12:03 PM #85198carloverParticipant
The original poster was hoping for a quick veto of this bill by the president. But, like it or not, with a vote of 348-72 that is impossible. Congress needs to have a 2/3 YES vote to override a presidential veto or 0.66%, but the bill passed the house with an 83% YES vote.
That being said this still has to go through the Senate and get consolidated into a single bill which could take some time.
September 19, 2007 at 12:28 PM #85200patientlywaitingParticipant
Good post, HLS. Exactly right. What’s there to save if you have zero equity?
September 19, 2007 at 12:34 PM #85201Ex-SDParticipant
With an election year approaching, these stupid politicians are simply pandering for votes and as usual………..they’re going to sell out the American public. They don’t care how much damage they do because they’ll get theirs back with kick-backs and their usual big increase in salary & benefits that they always vote for themselves. You are 100% correct that the housing market simply needs to correct itself to get things in proper alignment. The politicians are only going to do more damage to the overall economy with this foolishness.
September 19, 2007 at 12:57 PM #85206
You wouldn’t be saying this JUST so YOU can buy back in at 50% of what you sold at would you 😉
“You are 100% correct that the housing market simply needs to correct itself”
Take 100 upside homeowners at random and ask them:
A) How about we foreclose on your house, drop your credit score a bit, let you walk away with no 1099 debt relief consequence, you go rent for a few years while the PIGG’s folks straighten this mess out FOR YOU, You save up a few bucks, and you can buy a similar house back and owe half as much money as you do today, after saving a whole bunch by renting….Then you will owe $300K instead of $600K
B) How about we figure out a way that you can continue to pay interest on a $600K house that’s really worth about $300K,
that you don’t have any equity in today anyway, and we don’t really know what the heck we are talking about, (cuz if we did you wouldn’t be in this mess) but hopefully in a few years this mess will sort itself out. C'[mon, it’s an election year and WE WANT TO HELP. You will continue to be strapped, and will still owe about $600K in a few years, but the good part is, YA don’t have to move. Your credit score is probably crappy right about now anyway. So we are going to help you, just like we are helping those poor folks in New Orleans who live in a punchbowl……
Ummmmm, which one is REALLY better for the homeowner…
A or B ??? ???
September 19, 2007 at 1:21 PM #85209Ex-SDParticipant
It’s going to take a 50% hit in the SD housing market to entice me to move back. I’m liking it here more & more with each passing month.
It’s fascinating to watch this huge firestorm and look at the politicians scurrying to the money well with their buckets in an attempt to put it out. In a few months, they will figure out that there’s really nothing they can do but let it burn itself out…………………..then the Fed will start raising rates because we’ll be in a horrible recession (or depression). It’s not going to be pretty.
September 19, 2007 at 2:07 PM #85212
EX-SD, I know what you are thinking! I’d love to have you as a neighbor when you load up the wagon train and venture back west.
I’d love to be a fly on the wall when these big boys are together.
I firmly believe that what they say in public and and what they really think is 180 degrees difference.
I still remember when Greenspan uttered “irrational exuberance” why he didn’t say… You folks are insane idiots for paying the prices for these worthless stocks.
Ya gotta know that’s what he was thinking, and wanted to say.
SO… Just suppose, Bernanke calls Greenspan before his first speech and says, “UM,, Al,, How ya doin,, It’s Ben.
Ummm,, Do I tell those whackjobs in CA that they are being stupid paying that kind of money for stucco boxes ?”
AL says, “Ben, are you kidding me? I shouldn’t be telling you this, but my blind trust is long all the home builders, it’s not too late to get in on the action” So Ben says,. “OH OH,, OK,, AL. thanks, got it. UMM can I utter ‘irrational exuberance’ ?”
Al says ” Ben, you’re a big boy, just keep talking and tell them that you will be monitoring the situation and will watch it closely,, and ALWAYS add ‘We are doing EVERYTHING that we can’ It’s a great line to use, people think that ya mean it. The longer you talk, the fewer people listen, and even less understand. Kudlow and Cramer will argue over each word later, DON’T WORRY”
Ben says “OK OK,, Thanks AL..”
Al says “Ben,, two more things, get in on those homebuilder stocks, I’m telling you, It’s not too late”
Ben “OK AL. what’s the 2nd thing”
Al says “Oh ya..if that Maria from CNBC asks for an interview, do it Ben, she’s a cutie”
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