Refinance Bill Drastically Alters Market

[SK in CV]

[quote=SD Realtor]
SK as a side note I do not see how the actions of either president, Bush or Obama have done anything to promote a stronger dollar. It appears to me that if anything both of their policies have severely weakened the dollar. Perhaps as you stated the intent of congress is to promote a strong dollar but I am not so sure I believe that.[/quote]

I didn’t say strong dollar. I said stable dollar. And I think it is the one of the functions of the government to attempt to maintain that stability. (I believe it is actually a direct charge of the federal reserve bank.) I don’t think it’s always an easy task. And with limited regulation, it’s not always possible. While it hasn’t always been done perfectly, the fact that we are by far the largest debtor nation, and continue to peddle that soveriegn debt to a willing foreign and domestic market, is evidence of at least limited success.

[ucodegen]

[quote pri_dk]
Or did you start this thread just to make a cheap, useless, partisan jab? Exactly what Rich has asked us *not* to do, many times over.
[/quote]
Hold on a minute there.. you don’t hold the power of edict.. Rich Toscano does. How does the flippant remark:

Seriously!?!?! Ignore income and credit history!?!?!

Give me a break!

equate to a partisan jab? Absolutely no mention of political sides – anywhere in Huckleberry’s comment. The ‘subject’ post also does not allude to politics.

As for my position on it, taking the approach of ignoring income and credit history risks continuing down the path of moral hazard and entitlement that got us to this point in the first place. At some point it has to stop, iodine has to be poured on the wound to sanitize, the cavity has to be seen by the dentist and fixed, the gangrened limb has to be amputated. It is only a matter of when, not if. The more it is delayed, the worse it will be when it does occur – or the patient dies.

Being less obtuse. An individual who overextends themselves financially to get them in position of needing this type of foreclosure prevention will not learn by being bailed out, and will be fairly certain to re-default even after being refi’d. They will see that their finances are less tight, and see all sorts of opportunities for ‘their new found wealth’.

PS: The comment above is backed with a little experience. I know of someone who is getting a FHA refi.. and is already looking at buying new stuff.. including car. Debt service to gross income is currently over 55%. All I can do is shake my head at this..

[ucodegen]

[quote pri_dk]
Or did you start this thread just to make a cheap, useless, partisan jab? Exactly what Rich has asked us *not* to do, many times over.
[/quote]
Hold on a minute there.. you don’t hold the power of edict.. Rich Toscano does. How does the flippant remark:

Seriously!?!?! Ignore income and credit history!?!?!

Give me a break!

equate to a partisan jab? Absolutely no mention of political sides – anywhere in Huckleberry’s comment. The ‘subject’ post also does not allude to politics.

As for my position on it, taking the approach of ignoring income and credit history risks continuing down the path of moral hazard and entitlement that got us to this point in the first place. At some point it has to stop, iodine has to be poured on the wound to sanitize, the cavity has to be seen by the dentist and fixed, the gangrened limb has to be amputated. It is only a matter of when, not if. The more it is delayed, the worse it will be when it does occur – or the patient dies.

Being less obtuse. An individual who overextends themselves financially to get them in position of needing this type of foreclosure prevention will not learn by being bailed out, and will be fairly certain to re-default even after being refi’d. They will see that their finances are less tight, and see all sorts of opportunities for ‘their new found wealth’.

PS: The comment above is backed with a little experience. I know of someone who is getting a FHA refi.. and is already looking at buying new stuff.. including car. Debt service to gross income is currently over 55%. All I can do is shake my head at this..

[ucodegen]

[quote pri_dk]
Or did you start this thread just to make a cheap, useless, partisan jab? Exactly what Rich has asked us *not* to do, many times over.
[/quote]
Hold on a minute there.. you don’t hold the power of edict.. Rich Toscano does. How does the flippant remark:

Seriously!?!?! Ignore income and credit history!?!?!

Give me a break!

equate to a partisan jab? Absolutely no mention of political sides – anywhere in Huckleberry’s comment. The ‘subject’ post also does not allude to politics.

As for my position on it, taking the approach of ignoring income and credit history risks continuing down the path of moral hazard and entitlement that got us to this point in the first place. At some point it has to stop, iodine has to be poured on the wound to sanitize, the cavity has to be seen by the dentist and fixed, the gangrened limb has to be amputated. It is only a matter of when, not if. The more it is delayed, the worse it will be when it does occur – or the patient dies.

Being less obtuse. An individual who overextends themselves financially to get them in position of needing this type of foreclosure prevention will not learn by being bailed out, and will be fairly certain to re-default even after being refi’d. They will see that their finances are less tight, and see all sorts of opportunities for ‘their new found wealth’.

PS: The comment above is backed with a little experience. I know of someone who is getting a FHA refi.. and is already looking at buying new stuff.. including car. Debt service to gross income is currently over 55%. All I can do is shake my head at this..

[ucodegen]

[quote pri_dk]
Or did you start this thread just to make a cheap, useless, partisan jab? Exactly what Rich has asked us *not* to do, many times over.
[/quote]
Hold on a minute there.. you don’t hold the power of edict.. Rich Toscano does. How does the flippant remark:

Seriously!?!?! Ignore income and credit history!?!?!

Give me a break!

equate to a partisan jab? Absolutely no mention of political sides – anywhere in Huckleberry’s comment. The ‘subject’ post also does not allude to politics.

As for my position on it, taking the approach of ignoring income and credit history risks continuing down the path of moral hazard and entitlement that got us to this point in the first place. At some point it has to stop, iodine has to be poured on the wound to sanitize, the cavity has to be seen by the dentist and fixed, the gangrened limb has to be amputated. It is only a matter of when, not if. The more it is delayed, the worse it will be when it does occur – or the patient dies.

Being less obtuse. An individual who overextends themselves financially to get them in position of needing this type of foreclosure prevention will not learn by being bailed out, and will be fairly certain to re-default even after being refi’d. They will see that their finances are less tight, and see all sorts of opportunities for ‘their new found wealth’.

PS: The comment above is backed with a little experience. I know of someone who is getting a FHA refi.. and is already looking at buying new stuff.. including car. Debt service to gross income is currently over 55%. All I can do is shake my head at this..

[ucodegen]

[quote pri_dk]
Or did you start this thread just to make a cheap, useless, partisan jab? Exactly what Rich has asked us *not* to do, many times over.
[/quote]
Hold on a minute there.. you don’t hold the power of edict.. Rich Toscano does. How does the flippant remark:

Seriously!?!?! Ignore income and credit history!?!?!

Give me a break!

equate to a partisan jab? Absolutely no mention of political sides – anywhere in Huckleberry’s comment. The ‘subject’ post also does not allude to politics.

As for my position on it, taking the approach of ignoring income and credit history risks continuing down the path of moral hazard and entitlement that got us to this point in the first place. At some point it has to stop, iodine has to be poured on the wound to sanitize, the cavity has to be seen by the dentist and fixed, the gangrened limb has to be amputated. It is only a matter of when, not if. The more it is delayed, the worse it will be when it does occur – or the patient dies.

Being less obtuse. An individual who overextends themselves financially to get them in position of needing this type of foreclosure prevention will not learn by being bailed out, and will be fairly certain to re-default even after being refi’d. They will see that their finances are less tight, and see all sorts of opportunities for ‘their new found wealth’.

PS: The comment above is backed with a little experience. I know of someone who is getting a FHA refi.. and is already looking at buying new stuff.. including car. Debt service to gross income is currently over 55%. All I can do is shake my head at this..

[CA renter]

I have less of a problem with this than with principal reduction schemes. Like UCGal mentioned above, this would give borrowers a chance to get a lower rate with a standard 30-yr FRM.

It’s not that I like it; but if they are already in the loans, and depressed values are the only thing standing between them and a refi to a lower rate, I don’t have a problem with it.

BTW, I don’t think this is going to have much of an impact on the housing market.

[CA renter]

I have less of a problem with this than with principal reduction schemes. Like UCGal mentioned above, this would give borrowers a chance to get a lower rate with a standard 30-yr FRM.

It’s not that I like it; but if they are already in the loans, and depressed values are the only thing standing between them and a refi to a lower rate, I don’t have a problem with it.

BTW, I don’t think this is going to have much of an impact on the housing market.

[CA renter]

I have less of a problem with this than with principal reduction schemes. Like UCGal mentioned above, this would give borrowers a chance to get a lower rate with a standard 30-yr FRM.

It’s not that I like it; but if they are already in the loans, and depressed values are the only thing standing between them and a refi to a lower rate, I don’t have a problem with it.

BTW, I don’t think this is going to have much of an impact on the housing market.

[CA renter]

I have less of a problem with this than with principal reduction schemes. Like UCGal mentioned above, this would give borrowers a chance to get a lower rate with a standard 30-yr FRM.

It’s not that I like it; but if they are already in the loans, and depressed values are the only thing standing between them and a refi to a lower rate, I don’t have a problem with it.

BTW, I don’t think this is going to have much of an impact on the housing market.

[CA renter]

I have less of a problem with this than with principal reduction schemes. Like UCGal mentioned above, this would give borrowers a chance to get a lower rate with a standard 30-yr FRM.

It’s not that I like it; but if they are already in the loans, and depressed values are the only thing standing between them and a refi to a lower rate, I don’t have a problem with it.

BTW, I don’t think this is going to have much of an impact on the housing market.

[Anonymous]

[quote=ucodegen][quote pri_dk]Or did you start this thread […][/quote]
How does the flippant remark […] equate to a partisan jab?[/quote]

Try reading more carefully. Read the article also. You’ll notice a (D) next to the congressman’s name. But I’m sure that had nothing to do with the OP’s decision to start a thread about a “retarded” politician…

I agree with the rest of your post…or used to, anyway. The problem with many of these points are that they are based upon abstract notions and not a practical course of action. It’s too late to fret about moral hazard. We have to act. Moral hazard won’t be a problem moving forward anyway, because lenders are now going to be very careful with their funds for very long time.

Another problem with the general “let the market settle where it may” approach is that it ignores transaction costs. Sure, we can let all these homes sit vacant, move slowly through the courts over many years, sell them at auction to investors and eventually have the same people back in them as renters. That would be the textbook “market” approach, but it carries a lot of deadweight loss – $trillions in assets sit idle and lots of money goes to middlemen who create no real value. Transaction costs in real estate are huge, and even bigger when they involve a legal process like foreclosure.

[Anonymous]

[quote=ucodegen][quote pri_dk]Or did you start this thread […][/quote]
How does the flippant remark […] equate to a partisan jab?[/quote]

Try reading more carefully. Read the article also. You’ll notice a (D) next to the congressman’s name. But I’m sure that had nothing to do with the OP’s decision to start a thread about a “retarded” politician…

I agree with the rest of your post…or used to, anyway. The problem with many of these points are that they are based upon abstract notions and not a practical course of action. It’s too late to fret about moral hazard. We have to act. Moral hazard won’t be a problem moving forward anyway, because lenders are now going to be very careful with their funds for very long time.

Another problem with the general “let the market settle where it may” approach is that it ignores transaction costs. Sure, we can let all these homes sit vacant, move slowly through the courts over many years, sell them at auction to investors and eventually have the same people back in them as renters. That would be the textbook “market” approach, but it carries a lot of deadweight loss – $trillions in assets sit idle and lots of money goes to middlemen who create no real value. Transaction costs in real estate are huge, and even bigger when they involve a legal process like foreclosure.

[Anonymous]

[quote=ucodegen][quote pri_dk]Or did you start this thread […][/quote]
How does the flippant remark […] equate to a partisan jab?[/quote]

Try reading more carefully. Read the article also. You’ll notice a (D) next to the congressman’s name. But I’m sure that had nothing to do with the OP’s decision to start a thread about a “retarded” politician…

I agree with the rest of your post…or used to, anyway. The problem with many of these points are that they are based upon abstract notions and not a practical course of action. It’s too late to fret about moral hazard. We have to act. Moral hazard won’t be a problem moving forward anyway, because lenders are now going to be very careful with their funds for very long time.

Another problem with the general “let the market settle where it may” approach is that it ignores transaction costs. Sure, we can let all these homes sit vacant, move slowly through the courts over many years, sell them at auction to investors and eventually have the same people back in them as renters. That would be the textbook “market” approach, but it carries a lot of deadweight loss – $trillions in assets sit idle and lots of money goes to middlemen who create no real value. Transaction costs in real estate are huge, and even bigger when they involve a legal process like foreclosure.

[Anonymous]

[quote=ucodegen][quote pri_dk]Or did you start this thread […][/quote]
How does the flippant remark […] equate to a partisan jab?[/quote]

Try reading more carefully. Read the article also. You’ll notice a (D) next to the congressman’s name. But I’m sure that had nothing to do with the OP’s decision to start a thread about a “retarded” politician…

I agree with the rest of your post…or used to, anyway. The problem with many of these points are that they are based upon abstract notions and not a practical course of action. It’s too late to fret about moral hazard. We have to act. Moral hazard won’t be a problem moving forward anyway, because lenders are now going to be very careful with their funds for very long time.

Another problem with the general “let the market settle where it may” approach is that it ignores transaction costs. Sure, we can let all these homes sit vacant, move slowly through the courts over many years, sell them at auction to investors and eventually have the same people back in them as renters. That would be the textbook “market” approach, but it carries a lot of deadweight loss – $trillions in assets sit idle and lots of money goes to middlemen who create no real value. Transaction costs in real estate are huge, and even bigger when they involve a legal process like foreclosure.

[Author]

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