The White House Freezing Loans for 5-Years

[Running Bear]

Gents,

Like SD Realtor said this will only delay the inevitable. The point people aren’t talking about but what is the key problem here is the Securitization of Mortgages. The mechanism that took us to these unaffordable levels was a massive boom in this market. This market is now dead and it isn’t coming back anytime soon. Prices will come down regardless of whether they freeze rates or foreclosures. Now that we are back to much tighter lending standards prices will come down. It is that simple. All this may do is slow down the drop. Instead of the cliff jump we would be looking at in 2008 it won’t be so vertical. If they don’t want the housing market to have a large correction they will have to resurrect this market. That won’t happen.

My2Cents

[jmpman]

Mr Paulson’s going to have an live chat session on Friday:

Friday at 1:00 PM EST
Henry Paulson
Secretary of the Treasury

Ask a question:
http://www.whitehouse.gov/ask/question.html

😉

[jmpman]

Mr Paulson’s going to have an live chat session on Friday:

Friday at 1:00 PM EST
Henry Paulson
Secretary of the Treasury

Ask a question:
http://www.whitehouse.gov/ask/question.html

😉

[jmpman]

Mr Paulson’s going to have an live chat session on Friday:

Friday at 1:00 PM EST
Henry Paulson
Secretary of the Treasury

Ask a question:
http://www.whitehouse.gov/ask/question.html

😉

[jmpman]

Mr Paulson’s going to have an live chat session on Friday:

Friday at 1:00 PM EST
Henry Paulson
Secretary of the Treasury

Ask a question:
http://www.whitehouse.gov/ask/question.html

😉

[jmpman]

Mr Paulson’s going to have an live chat session on Friday:

Friday at 1:00 PM EST
Henry Paulson
Secretary of the Treasury

Ask a question:
http://www.whitehouse.gov/ask/question.html

😉

[Anonymous]

This has nothing to do with communism or government bailout (no tax money needs to be involved here). It is more of a “mutual defense pact”. The lenders and the investors all recognize that it is far cheaper to keep the borrowers who are solvent in the house than foreclosing on them. Then at least someone will take care of the property, pay the property tax, amortize the loan principal and not add further pressure to price of foreclosed properties etc. However they also know that acting individually, they are better off to be the first to foreclose as home prices are currently on a downward slope. That is why they need a collective pact to promise to take the same sacrifices. Now knowing human nature this is also what makes one wonder if the deal can stick in the long term. There is incentive for people to break the pact and profit from others’ actions and I don’t see how they can enforce such a pact legally.

[Anonymous]

This has nothing to do with communism or government bailout (no tax money needs to be involved here). It is more of a “mutual defense pact”. The lenders and the investors all recognize that it is far cheaper to keep the borrowers who are solvent in the house than foreclosing on them. Then at least someone will take care of the property, pay the property tax, amortize the loan principal and not add further pressure to price of foreclosed properties etc. However they also know that acting individually, they are better off to be the first to foreclose as home prices are currently on a downward slope. That is why they need a collective pact to promise to take the same sacrifices. Now knowing human nature this is also what makes one wonder if the deal can stick in the long term. There is incentive for people to break the pact and profit from others’ actions and I don’t see how they can enforce such a pact legally.

[Anonymous]

This has nothing to do with communism or government bailout (no tax money needs to be involved here). It is more of a “mutual defense pact”. The lenders and the investors all recognize that it is far cheaper to keep the borrowers who are solvent in the house than foreclosing on them. Then at least someone will take care of the property, pay the property tax, amortize the loan principal and not add further pressure to price of foreclosed properties etc. However they also know that acting individually, they are better off to be the first to foreclose as home prices are currently on a downward slope. That is why they need a collective pact to promise to take the same sacrifices. Now knowing human nature this is also what makes one wonder if the deal can stick in the long term. There is incentive for people to break the pact and profit from others’ actions and I don’t see how they can enforce such a pact legally.

[Anonymous]

This has nothing to do with communism or government bailout (no tax money needs to be involved here). It is more of a “mutual defense pact”. The lenders and the investors all recognize that it is far cheaper to keep the borrowers who are solvent in the house than foreclosing on them. Then at least someone will take care of the property, pay the property tax, amortize the loan principal and not add further pressure to price of foreclosed properties etc. However they also know that acting individually, they are better off to be the first to foreclose as home prices are currently on a downward slope. That is why they need a collective pact to promise to take the same sacrifices. Now knowing human nature this is also what makes one wonder if the deal can stick in the long term. There is incentive for people to break the pact and profit from others’ actions and I don’t see how they can enforce such a pact legally.

[Anonymous]

This has nothing to do with communism or government bailout (no tax money needs to be involved here). It is more of a “mutual defense pact”. The lenders and the investors all recognize that it is far cheaper to keep the borrowers who are solvent in the house than foreclosing on them. Then at least someone will take care of the property, pay the property tax, amortize the loan principal and not add further pressure to price of foreclosed properties etc. However they also know that acting individually, they are better off to be the first to foreclose as home prices are currently on a downward slope. That is why they need a collective pact to promise to take the same sacrifices. Now knowing human nature this is also what makes one wonder if the deal can stick in the long term. There is incentive for people to break the pact and profit from others’ actions and I don’t see how they can enforce such a pact legally.

[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.

 

[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.

 

[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.

 

[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.

 

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