[cr]

[quote=CDMA ENG]So,

I have to ask, what is the benefit in this. Even if the current home owners want to stay in the property for the next couple of years at some point aren’t they going to say “why the hell am I paying 400K for this house when its only worth 300K?”. At some point they will walk away anyway?!?

Sounds like good money after bad again to me.

Take Care Piggs…[/quote]

You’re right it is. First the banks have to agree to participate, not just the homeowner (who in all likelihood will be better off walking, particularly in CA).

Then there’s a really Marxist part of the bill where the Government gets a minimum 50% of the equity from your house when you sell:

• < 1 year 100% of equity goes to government/lenders • < 2 years 90% of equity ” ” • < 3 years 80% of equity ” ” • <4 years 70% of equity ” ” • <5 years 60% of equity ” ” • >5 years 50% equity share

So who stands to benefit? The government, after spending OUR money on this, and the lender, who just has to take a hit up front.

This starts to look as much like retribution to the homeowner as it does a bailout.

[cr]

[quote=CDMA ENG]So,

I have to ask, what is the benefit in this. Even if the current home owners want to stay in the property for the next couple of years at some point aren’t they going to say “why the hell am I paying 400K for this house when its only worth 300K?”. At some point they will walk away anyway?!?

Sounds like good money after bad again to me.

Take Care Piggs…[/quote]

You’re right it is. First the banks have to agree to participate, not just the homeowner (who in all likelihood will be better off walking, particularly in CA).

Then there’s a really Marxist part of the bill where the Government gets a minimum 50% of the equity from your house when you sell:

• < 1 year 100% of equity goes to government/lenders • < 2 years 90% of equity ” ” • < 3 years 80% of equity ” ” • <4 years 70% of equity ” ” • <5 years 60% of equity ” ” • >5 years 50% equity share

So who stands to benefit? The government, after spending OUR money on this, and the lender, who just has to take a hit up front.

This starts to look as much like retribution to the homeowner as it does a bailout.

[cr]

[quote=CDMA ENG]So,

I have to ask, what is the benefit in this. Even if the current home owners want to stay in the property for the next couple of years at some point aren’t they going to say “why the hell am I paying 400K for this house when its only worth 300K?”. At some point they will walk away anyway?!?

Sounds like good money after bad again to me.

Take Care Piggs…[/quote]

You’re right it is. First the banks have to agree to participate, not just the homeowner (who in all likelihood will be better off walking, particularly in CA).

Then there’s a really Marxist part of the bill where the Government gets a minimum 50% of the equity from your house when you sell:

• < 1 year 100% of equity goes to government/lenders • < 2 years 90% of equity ” ” • < 3 years 80% of equity ” ” • <4 years 70% of equity ” ” • <5 years 60% of equity ” ” • >5 years 50% equity share

So who stands to benefit? The government, after spending OUR money on this, and the lender, who just has to take a hit up front.

This starts to look as much like retribution to the homeowner as it does a bailout.

[cr]

[quote=CDMA ENG]So,

I have to ask, what is the benefit in this. Even if the current home owners want to stay in the property for the next couple of years at some point aren’t they going to say “why the hell am I paying 400K for this house when its only worth 300K?”. At some point they will walk away anyway?!?

Sounds like good money after bad again to me.

Take Care Piggs…[/quote]

You’re right it is. First the banks have to agree to participate, not just the homeowner (who in all likelihood will be better off walking, particularly in CA).

Then there’s a really Marxist part of the bill where the Government gets a minimum 50% of the equity from your house when you sell:

• < 1 year 100% of equity goes to government/lenders • < 2 years 90% of equity ” ” • < 3 years 80% of equity ” ” • <4 years 70% of equity ” ” • <5 years 60% of equity ” ” • >5 years 50% equity share

So who stands to benefit? The government, after spending OUR money on this, and the lender, who just has to take a hit up front.

This starts to look as much like retribution to the homeowner as it does a bailout.

[cr]

Yes, but not if they spread as thin as they could to afford that $2,210/mo payment before gas and food doubled, and their income didn’t increase in the last 3 years.

No to mention that assumes they actually earn what they claimed on their loan. Though I suspect liar loaners will be the last to try and requalify.

[cr]

Yes, but not if they spread as thin as they could to afford that $2,210/mo payment before gas and food doubled, and their income didn’t increase in the last 3 years.

No to mention that assumes they actually earn what they claimed on their loan. Though I suspect liar loaners will be the last to try and requalify.

[cr]

Yes, but not if they spread as thin as they could to afford that $2,210/mo payment before gas and food doubled, and their income didn’t increase in the last 3 years.

No to mention that assumes they actually earn what they claimed on their loan. Though I suspect liar loaners will be the last to try and requalify.

[cr]

Yes, but not if they spread as thin as they could to afford that $2,210/mo payment before gas and food doubled, and their income didn’t increase in the last 3 years.

No to mention that assumes they actually earn what they claimed on their loan. Though I suspect liar loaners will be the last to try and requalify.

[cr]

Yes, but not if they spread as thin as they could to afford that $2,210/mo payment before gas and food doubled, and their income didn’t increase in the last 3 years.

No to mention that assumes they actually earn what they claimed on their loan. Though I suspect liar loaners will be the last to try and requalify.

[cr]

A house is too large a portion of a person’s budget to be able to directly track CPI, or core inflation.

You’re better off looking at income/wage growth.

As Diego said inflation is off the charts lately, contrary to published data, but incomes determine what people can afford. If incomes are up X-% over Y-time houses are more likely to follow that than CPI. Of course incomes are supposed to keep up with inflation, but inflation is usually lower than it is.

[cr]

A house is too large a portion of a person’s budget to be able to directly track CPI, or core inflation.

You’re better off looking at income/wage growth.

As Diego said inflation is off the charts lately, contrary to published data, but incomes determine what people can afford. If incomes are up X-% over Y-time houses are more likely to follow that than CPI. Of course incomes are supposed to keep up with inflation, but inflation is usually lower than it is.

[cr]

A house is too large a portion of a person’s budget to be able to directly track CPI, or core inflation.

You’re better off looking at income/wage growth.

As Diego said inflation is off the charts lately, contrary to published data, but incomes determine what people can afford. If incomes are up X-% over Y-time houses are more likely to follow that than CPI. Of course incomes are supposed to keep up with inflation, but inflation is usually lower than it is.

[cr]

A house is too large a portion of a person’s budget to be able to directly track CPI, or core inflation.

You’re better off looking at income/wage growth.

As Diego said inflation is off the charts lately, contrary to published data, but incomes determine what people can afford. If incomes are up X-% over Y-time houses are more likely to follow that than CPI. Of course incomes are supposed to keep up with inflation, but inflation is usually lower than it is.

[cr]

A house is too large a portion of a person’s budget to be able to directly track CPI, or core inflation.

You’re better off looking at income/wage growth.

As Diego said inflation is off the charts lately, contrary to published data, but incomes determine what people can afford. If incomes are up X-% over Y-time houses are more likely to follow that than CPI. Of course incomes are supposed to keep up with inflation, but inflation is usually lower than it is.

[cr]

This is probably going to prove to be one of the most ineffective and costly wastes of legislation in history. All the more why it’s assinine that it passed, but all I read indicates it’s virtually pointless for CA, where people all along have been planning on selling for massive gains once their loan adjusts.

This is from the doctorhousingbubble.com:

“The new housing bill now fully signed into law by the President will do very little to help California. Why? First, lenders should they wish to participate will need to have the property reappraised at today’s market value… In addition, the lender will be required to cut an additional 10 percent from the current appraised value. Well in places like Los Angeles where the median price is off by 35.65 percent an additional reduction of 10 percent will bring the one year correction to nearly 50 percent!…
…Another reason that this won’t fly in states like California is many borrowers even with the new bailout program will not be able to make their payments on a 30 year fixed…

…the minimum payment is only $2,053 on a $616,230 loan! Simply insane and ridiculous. What should be a $3,626 a month payment is artificially lowered by nearly half. Keep in mind that data on option arm loans tells us that approximately 80 percent of people make the minimum payment and we are not factoring in taxes or insurance above.
So with that said, let us assume the lender decides to participate and that home valued at $616,230 is now appraised at $396,560. How will the numbers work out now? Well first the lender will need to take off 10 percent off the appraised value plus a one time 3 percent fee from the note to participate in the program:
$396,560 x .13 = $345,007 new 30 year fixed mortgage
According to the Freddie Mac website the current 30 year fixed rate is 6.63%.

So let us assume the borrower now goes with this loan. What does his monthly principal and interest payment work out to be?
30 year fixed new principal and interest payment = $2,210.26!!!
So even after the massive haircut the lender will take from the 35.65% market correction, the additional 10% in reduced appraisal terms, and the extra one time payment the borrower actually has a higher payment than the initial Pay Option ARM payment for a loan that was $271,223 larger.”

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