The White House Freezing Loans for 5-Years

[Coronita]

When I read about this bailout, I have to admit I have mixed feelings on it.

 

On one hand, I don't think it's right that people who were in over their heads gets a handout at the expense of others who are financially responsible.

However, at the same time, it does seem like this will at least sort of bring some stability to the financial markets. It seems like it's a strategy to just buy time, and string out the pain, so that less of it is endured all at once. As such, I'm thinking (hoping) that this helps stabilize some of the equities market. I think the consequences of not doing that would hurt a lot more people who have 401k's, investments,etc who are financially responsible. Also, I have to say, these people that are overstretched- we sort of need them to keep spending to prop up the markets. Either way, they're going to loose in the long run. At least if gives the rest of us time to make the necessary financial adjustments to weather a bigger storm in the future.

I guess we can't have it both ways.

 

As far as picking up good investment property, it looks like I'll have to wait longer. It's a little disconcerting. My wife and I have 800+ credit scores, never missed a payment on anything and have a fixed rate mortgage at 5.625%. On the other extreme, you'll probably have <600 people scores that will get the same temporary fixed rate mortgage.  Also, are taxes are going to go way higher to subsidize these people.

Unreal.

 

[mgubnyc1]

The conditions are:

1) Must have made all payments to date on the existing loan
2) wouldn’t be able to afford the loan if it adjusted

most of these people won’t even pass condition 1

also, lets not forget that these subprime teaser rate low intrest loans are neg amo and at the moment the mortgage balances are higher then the house is worth, in five years the mortgages balances will be even higher.

besides, the mortgage mess is just as bad or worse with Alt A loans.

IMO the goverment should just buy up all the repo homes in CA,AZ,AR and FL for .50 on the dollar, then rent them out and use the income towards paying down there dept!

[mgubnyc1]

The conditions are:

1) Must have made all payments to date on the existing loan
2) wouldn’t be able to afford the loan if it adjusted

most of these people won’t even pass condition 1

also, lets not forget that these subprime teaser rate low intrest loans are neg amo and at the moment the mortgage balances are higher then the house is worth, in five years the mortgages balances will be even higher.

besides, the mortgage mess is just as bad or worse with Alt A loans.

IMO the goverment should just buy up all the repo homes in CA,AZ,AR and FL for .50 on the dollar, then rent them out and use the income towards paying down there dept!

[mgubnyc1]

The conditions are:

1) Must have made all payments to date on the existing loan
2) wouldn’t be able to afford the loan if it adjusted

most of these people won’t even pass condition 1

also, lets not forget that these subprime teaser rate low intrest loans are neg amo and at the moment the mortgage balances are higher then the house is worth, in five years the mortgages balances will be even higher.

besides, the mortgage mess is just as bad or worse with Alt A loans.

IMO the goverment should just buy up all the repo homes in CA,AZ,AR and FL for .50 on the dollar, then rent them out and use the income towards paying down there dept!

[mgubnyc1]

The conditions are:

1) Must have made all payments to date on the existing loan
2) wouldn’t be able to afford the loan if it adjusted

most of these people won’t even pass condition 1

also, lets not forget that these subprime teaser rate low intrest loans are neg amo and at the moment the mortgage balances are higher then the house is worth, in five years the mortgages balances will be even higher.

besides, the mortgage mess is just as bad or worse with Alt A loans.

IMO the goverment should just buy up all the repo homes in CA,AZ,AR and FL for .50 on the dollar, then rent them out and use the income towards paying down there dept!

[mgubnyc1]

The conditions are:

1) Must have made all payments to date on the existing loan
2) wouldn’t be able to afford the loan if it adjusted

most of these people won’t even pass condition 1

also, lets not forget that these subprime teaser rate low intrest loans are neg amo and at the moment the mortgage balances are higher then the house is worth, in five years the mortgages balances will be even higher.

besides, the mortgage mess is just as bad or worse with Alt A loans.

IMO the goverment should just buy up all the repo homes in CA,AZ,AR and FL for .50 on the dollar, then rent them out and use the income towards paying down there dept!

[bubba99]

The liquidity issue is caused by the declining value of the mortgages underlying the CDO, not the numnber of foreclosures. The value is lowered by Moodys downgrades, FAS 157, and revenue below projections. This plan further reduces revenue, and hence should create a whole new round of losses for the big Wall Street firms.

If the plan has any real impact on the real estate market, it will bankrupt CITI, Morgan Stanley et. al. The plan only deals with the revenue side and completely misses the asset losses – unless Ben is going to allow the CDOs to remain at par, or pay the difference.

[bubba99]

The liquidity issue is caused by the declining value of the mortgages underlying the CDO, not the numnber of foreclosures. The value is lowered by Moodys downgrades, FAS 157, and revenue below projections. This plan further reduces revenue, and hence should create a whole new round of losses for the big Wall Street firms.

If the plan has any real impact on the real estate market, it will bankrupt CITI, Morgan Stanley et. al. The plan only deals with the revenue side and completely misses the asset losses – unless Ben is going to allow the CDOs to remain at par, or pay the difference.

[bubba99]

The liquidity issue is caused by the declining value of the mortgages underlying the CDO, not the numnber of foreclosures. The value is lowered by Moodys downgrades, FAS 157, and revenue below projections. This plan further reduces revenue, and hence should create a whole new round of losses for the big Wall Street firms.

If the plan has any real impact on the real estate market, it will bankrupt CITI, Morgan Stanley et. al. The plan only deals with the revenue side and completely misses the asset losses – unless Ben is going to allow the CDOs to remain at par, or pay the difference.

[bubba99]

The liquidity issue is caused by the declining value of the mortgages underlying the CDO, not the numnber of foreclosures. The value is lowered by Moodys downgrades, FAS 157, and revenue below projections. This plan further reduces revenue, and hence should create a whole new round of losses for the big Wall Street firms.

If the plan has any real impact on the real estate market, it will bankrupt CITI, Morgan Stanley et. al. The plan only deals with the revenue side and completely misses the asset losses – unless Ben is going to allow the CDOs to remain at par, or pay the difference.

[bubba99]

The liquidity issue is caused by the declining value of the mortgages underlying the CDO, not the numnber of foreclosures. The value is lowered by Moodys downgrades, FAS 157, and revenue below projections. This plan further reduces revenue, and hence should create a whole new round of losses for the big Wall Street firms.

If the plan has any real impact on the real estate market, it will bankrupt CITI, Morgan Stanley et. al. The plan only deals with the revenue side and completely misses the asset losses – unless Ben is going to allow the CDOs to remain at par, or pay the difference.

[bob2007]

I think highly of most people in this group, but have been surprised at the number of posts in which people can’t believe this is happening.

The one and only rule, whether it be housing or any other area that generates profit, is that you need to “follow the money”. The people with leverage will adjust events to their financial advantage. So people post their prophecies based on the known rules at the time. Guess what – there will ALWAYS be an unforeseen event.

So for all of you that KNOW when a crash will occur, I can provide the formula based on the last years worth of posts:

Housing bottom = (2 years) + (date of post)

Just keep posting and eventually you will be right. All US government is controlled by financial interests.

[bob2007]

I think highly of most people in this group, but have been surprised at the number of posts in which people can’t believe this is happening.

The one and only rule, whether it be housing or any other area that generates profit, is that you need to “follow the money”. The people with leverage will adjust events to their financial advantage. So people post their prophecies based on the known rules at the time. Guess what – there will ALWAYS be an unforeseen event.

So for all of you that KNOW when a crash will occur, I can provide the formula based on the last years worth of posts:

Housing bottom = (2 years) + (date of post)

Just keep posting and eventually you will be right. All US government is controlled by financial interests.

[bob2007]

I think highly of most people in this group, but have been surprised at the number of posts in which people can’t believe this is happening.

The one and only rule, whether it be housing or any other area that generates profit, is that you need to “follow the money”. The people with leverage will adjust events to their financial advantage. So people post their prophecies based on the known rules at the time. Guess what – there will ALWAYS be an unforeseen event.

So for all of you that KNOW when a crash will occur, I can provide the formula based on the last years worth of posts:

Housing bottom = (2 years) + (date of post)

Just keep posting and eventually you will be right. All US government is controlled by financial interests.

[bob2007]

I think highly of most people in this group, but have been surprised at the number of posts in which people can’t believe this is happening.

The one and only rule, whether it be housing or any other area that generates profit, is that you need to “follow the money”. The people with leverage will adjust events to their financial advantage. So people post their prophecies based on the known rules at the time. Guess what – there will ALWAYS be an unforeseen event.

So for all of you that KNOW when a crash will occur, I can provide the formula based on the last years worth of posts:

Housing bottom = (2 years) + (date of post)

Just keep posting and eventually you will be right. All US government is controlled by financial interests.

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