[SK in CV]

[quote=UCGal]
What I didn’t see addressed in the article is 401k funds. I would guess that since both plans are kind of tiered flat taxes (eliminating deductions) 401k/IRA contributions would go away. (No deductions so no tax deferred contributions.) But would you still be able to have the money already invested grow tax free?

The SS changes seem reasonable – but maybe I feel that way since I’ll be in my late 80’s/early 90’s when the means testing happens… by that time my assets will be spent down.

[/quote]

Great question on the 401K’s and other retirement plan issues. I can’t find anything in the draft proposal that specifically addresses it. It does say “Reform Mortgage, Health and Retirement Benefits at 80% of current levels”. Not sure what the reform of retirement benefits is even referring to. Other sources have said stuff like “doing away with all deductions”, though I can’t find where they got that from. 401K’s (along with IRA’s and other retirement plan contributions) aren’t technically deductions, but rather adjustments to income. So I don’t know if they stay or go under these recommendations.

I like the elimination of the mortgage deduction, but I’m disappointed that they’re recommending keeping 20%. Though engrained in the current pricing paradigm, eliminating it entirely would probably go a long ways in stabalizing prices by eliminating tax rates from the “affordability calculation”. Currently there are just too many variables for stable prices. Cost, interest rate, tax rate. Eliminating it would make make us more solvent overall, encourage paying off mortgages, discourage ATM HELOC’s and refi’s for consumer spending. I’m thinking it would also serve to keep interest rates lower, by lowering demand for mortgages. People who can afford to pay off mortgages will.

Reducing the marginal tax rates accordingly will theoretically keep the average taxpayers effective tax rate the same. Though it seems the very top income levels will gain a much bigger benefit. Cutting multi-million dollar income earners, many who currently have no meaningful mortgage deduction, to 23% appears to be a humungous bonus for them. Admittedly, that’s a first glance response. I’d like to see more analysis.

I’m not real excited about the higher normal retirement age for SS. While overall life expectancy has increased significantly since SS started, most of that increase is in lower mortality rates at ages lower than 65. Life expectancy at age 65 has not increased much in the last 70 (since SS monthly benefits started). I think only about 3 years, and normal retirement age has already increased 2 to 67 (phased in). There are a lot of industries where working until 70 is just not possible.

But something does have to be done to get the budget under control and reduce the deficit. So overall, after first review, I like the plan. A few tweaks here and there and maybe it will work. At least until the lobbyists get their whack at it.

[SK in CV]

[quote=UCGal]
What I didn’t see addressed in the article is 401k funds. I would guess that since both plans are kind of tiered flat taxes (eliminating deductions) 401k/IRA contributions would go away. (No deductions so no tax deferred contributions.) But would you still be able to have the money already invested grow tax free?

The SS changes seem reasonable – but maybe I feel that way since I’ll be in my late 80’s/early 90’s when the means testing happens… by that time my assets will be spent down.

[/quote]

Great question on the 401K’s and other retirement plan issues. I can’t find anything in the draft proposal that specifically addresses it. It does say “Reform Mortgage, Health and Retirement Benefits at 80% of current levels”. Not sure what the reform of retirement benefits is even referring to. Other sources have said stuff like “doing away with all deductions”, though I can’t find where they got that from. 401K’s (along with IRA’s and other retirement plan contributions) aren’t technically deductions, but rather adjustments to income. So I don’t know if they stay or go under these recommendations.

I like the elimination of the mortgage deduction, but I’m disappointed that they’re recommending keeping 20%. Though engrained in the current pricing paradigm, eliminating it entirely would probably go a long ways in stabalizing prices by eliminating tax rates from the “affordability calculation”. Currently there are just too many variables for stable prices. Cost, interest rate, tax rate. Eliminating it would make make us more solvent overall, encourage paying off mortgages, discourage ATM HELOC’s and refi’s for consumer spending. I’m thinking it would also serve to keep interest rates lower, by lowering demand for mortgages. People who can afford to pay off mortgages will.

Reducing the marginal tax rates accordingly will theoretically keep the average taxpayers effective tax rate the same. Though it seems the very top income levels will gain a much bigger benefit. Cutting multi-million dollar income earners, many who currently have no meaningful mortgage deduction, to 23% appears to be a humungous bonus for them. Admittedly, that’s a first glance response. I’d like to see more analysis.

I’m not real excited about the higher normal retirement age for SS. While overall life expectancy has increased significantly since SS started, most of that increase is in lower mortality rates at ages lower than 65. Life expectancy at age 65 has not increased much in the last 70 (since SS monthly benefits started). I think only about 3 years, and normal retirement age has already increased 2 to 67 (phased in). There are a lot of industries where working until 70 is just not possible.

But something does have to be done to get the budget under control and reduce the deficit. So overall, after first review, I like the plan. A few tweaks here and there and maybe it will work. At least until the lobbyists get their whack at it.

[SK in CV]

[quote=UCGal]
What I didn’t see addressed in the article is 401k funds. I would guess that since both plans are kind of tiered flat taxes (eliminating deductions) 401k/IRA contributions would go away. (No deductions so no tax deferred contributions.) But would you still be able to have the money already invested grow tax free?

The SS changes seem reasonable – but maybe I feel that way since I’ll be in my late 80’s/early 90’s when the means testing happens… by that time my assets will be spent down.

[/quote]

Great question on the 401K’s and other retirement plan issues. I can’t find anything in the draft proposal that specifically addresses it. It does say “Reform Mortgage, Health and Retirement Benefits at 80% of current levels”. Not sure what the reform of retirement benefits is even referring to. Other sources have said stuff like “doing away with all deductions”, though I can’t find where they got that from. 401K’s (along with IRA’s and other retirement plan contributions) aren’t technically deductions, but rather adjustments to income. So I don’t know if they stay or go under these recommendations.

I like the elimination of the mortgage deduction, but I’m disappointed that they’re recommending keeping 20%. Though engrained in the current pricing paradigm, eliminating it entirely would probably go a long ways in stabalizing prices by eliminating tax rates from the “affordability calculation”. Currently there are just too many variables for stable prices. Cost, interest rate, tax rate. Eliminating it would make make us more solvent overall, encourage paying off mortgages, discourage ATM HELOC’s and refi’s for consumer spending. I’m thinking it would also serve to keep interest rates lower, by lowering demand for mortgages. People who can afford to pay off mortgages will.

Reducing the marginal tax rates accordingly will theoretically keep the average taxpayers effective tax rate the same. Though it seems the very top income levels will gain a much bigger benefit. Cutting multi-million dollar income earners, many who currently have no meaningful mortgage deduction, to 23% appears to be a humungous bonus for them. Admittedly, that’s a first glance response. I’d like to see more analysis.

I’m not real excited about the higher normal retirement age for SS. While overall life expectancy has increased significantly since SS started, most of that increase is in lower mortality rates at ages lower than 65. Life expectancy at age 65 has not increased much in the last 70 (since SS monthly benefits started). I think only about 3 years, and normal retirement age has already increased 2 to 67 (phased in). There are a lot of industries where working until 70 is just not possible.

But something does have to be done to get the budget under control and reduce the deficit. So overall, after first review, I like the plan. A few tweaks here and there and maybe it will work. At least until the lobbyists get their whack at it.

[SK in CV]

[quote=UCGal]
What I didn’t see addressed in the article is 401k funds. I would guess that since both plans are kind of tiered flat taxes (eliminating deductions) 401k/IRA contributions would go away. (No deductions so no tax deferred contributions.) But would you still be able to have the money already invested grow tax free?

The SS changes seem reasonable – but maybe I feel that way since I’ll be in my late 80’s/early 90’s when the means testing happens… by that time my assets will be spent down.

[/quote]

Great question on the 401K’s and other retirement plan issues. I can’t find anything in the draft proposal that specifically addresses it. It does say “Reform Mortgage, Health and Retirement Benefits at 80% of current levels”. Not sure what the reform of retirement benefits is even referring to. Other sources have said stuff like “doing away with all deductions”, though I can’t find where they got that from. 401K’s (along with IRA’s and other retirement plan contributions) aren’t technically deductions, but rather adjustments to income. So I don’t know if they stay or go under these recommendations.

I like the elimination of the mortgage deduction, but I’m disappointed that they’re recommending keeping 20%. Though engrained in the current pricing paradigm, eliminating it entirely would probably go a long ways in stabalizing prices by eliminating tax rates from the “affordability calculation”. Currently there are just too many variables for stable prices. Cost, interest rate, tax rate. Eliminating it would make make us more solvent overall, encourage paying off mortgages, discourage ATM HELOC’s and refi’s for consumer spending. I’m thinking it would also serve to keep interest rates lower, by lowering demand for mortgages. People who can afford to pay off mortgages will.

Reducing the marginal tax rates accordingly will theoretically keep the average taxpayers effective tax rate the same. Though it seems the very top income levels will gain a much bigger benefit. Cutting multi-million dollar income earners, many who currently have no meaningful mortgage deduction, to 23% appears to be a humungous bonus for them. Admittedly, that’s a first glance response. I’d like to see more analysis.

I’m not real excited about the higher normal retirement age for SS. While overall life expectancy has increased significantly since SS started, most of that increase is in lower mortality rates at ages lower than 65. Life expectancy at age 65 has not increased much in the last 70 (since SS monthly benefits started). I think only about 3 years, and normal retirement age has already increased 2 to 67 (phased in). There are a lot of industries where working until 70 is just not possible.

But something does have to be done to get the budget under control and reduce the deficit. So overall, after first review, I like the plan. A few tweaks here and there and maybe it will work. At least until the lobbyists get their whack at it.

[SK in CV]

[quote=flu]No worries..Just think of CA government as a mini version of the Fed government 2 years ago…Things will be fine 2 years from now, when utterly the CA government majorly f’s up and has it’s own watershed moment.

No good ever comes with a one party dominated government.[/quote]

and

[quote=CA Renter]Good thing the state and federal governments are swimming in cash; otherwise, they wouldn’t be able to afford these nice “programs” for the poor, poor “homeowners.” [/quote]

Just to clarify, this is NOT a state funded program. It is a federal program that is administered at the state level.

Other than that, I don’t really have any opinion on the program, except that I don’t think it will have any significant effect on the market. As long as the lenders don’t suck up some of the losses, it won’t address the long term problems in the market.

[SK in CV]

[quote=flu]No worries..Just think of CA government as a mini version of the Fed government 2 years ago…Things will be fine 2 years from now, when utterly the CA government majorly f’s up and has it’s own watershed moment.

No good ever comes with a one party dominated government.[/quote]

and

[quote=CA Renter]Good thing the state and federal governments are swimming in cash; otherwise, they wouldn’t be able to afford these nice “programs” for the poor, poor “homeowners.” [/quote]

Just to clarify, this is NOT a state funded program. It is a federal program that is administered at the state level.

Other than that, I don’t really have any opinion on the program, except that I don’t think it will have any significant effect on the market. As long as the lenders don’t suck up some of the losses, it won’t address the long term problems in the market.

[SK in CV]

[quote=flu]No worries..Just think of CA government as a mini version of the Fed government 2 years ago…Things will be fine 2 years from now, when utterly the CA government majorly f’s up and has it’s own watershed moment.

No good ever comes with a one party dominated government.[/quote]

and

[quote=CA Renter]Good thing the state and federal governments are swimming in cash; otherwise, they wouldn’t be able to afford these nice “programs” for the poor, poor “homeowners.” [/quote]

Just to clarify, this is NOT a state funded program. It is a federal program that is administered at the state level.

Other than that, I don’t really have any opinion on the program, except that I don’t think it will have any significant effect on the market. As long as the lenders don’t suck up some of the losses, it won’t address the long term problems in the market.

[SK in CV]

[quote=flu]No worries..Just think of CA government as a mini version of the Fed government 2 years ago…Things will be fine 2 years from now, when utterly the CA government majorly f’s up and has it’s own watershed moment.

No good ever comes with a one party dominated government.[/quote]

and

[quote=CA Renter]Good thing the state and federal governments are swimming in cash; otherwise, they wouldn’t be able to afford these nice “programs” for the poor, poor “homeowners.” [/quote]

Just to clarify, this is NOT a state funded program. It is a federal program that is administered at the state level.

Other than that, I don’t really have any opinion on the program, except that I don’t think it will have any significant effect on the market. As long as the lenders don’t suck up some of the losses, it won’t address the long term problems in the market.

[SK in CV]

[quote=flu]No worries..Just think of CA government as a mini version of the Fed government 2 years ago…Things will be fine 2 years from now, when utterly the CA government majorly f’s up and has it’s own watershed moment.

No good ever comes with a one party dominated government.[/quote]

and

[quote=CA Renter]Good thing the state and federal governments are swimming in cash; otherwise, they wouldn’t be able to afford these nice “programs” for the poor, poor “homeowners.” [/quote]

Just to clarify, this is NOT a state funded program. It is a federal program that is administered at the state level.

Other than that, I don’t really have any opinion on the program, except that I don’t think it will have any significant effect on the market. As long as the lenders don’t suck up some of the losses, it won’t address the long term problems in the market.

[SK in CV]

[quote=Kingside]This strikes me as pure politics. If an attorney general thinks there is a violation of law, they should start an enforcement action, not issue the equivalent of a press release inviting consumers in foreclosure to contact them.

[/quote]

I don’t entirely disagree with you here. I certainly agree with you on the process part. But I don’t think it’s purely politics. The problem is that MERS is acting as the nominee trustor on these trust deed tranfers and all subsequent transfers. Some jurisdictions don’t have a provision for nominee trustors (or at least some courts have held this to be the case.) So trust deeds get transfered, and MERS remains as nominee owner of record. In jurisdictions that have a mandatory 90 day period for recording transfers, and may not recognize MERS nominee status, that’s a very real problem.

I don’t know if California has this 90 mandatory recording law. Nor do I have any idea of exactly what the remedy is for not recording transfers within the 90 day period. It seems draconian that it invalidates the security interest, thereby voiding the lien.

UCGal may have hit on an important issue, i.e, the various jurisdictions losing fees for recordings, which probably number in the millions.

In any case, this is potentially a huge issue. And will vary state by state. There is a humungous potential liability to the investment banks that sponsored all of the MBS trusts, in addition to those that actively managed those trusts. If the security instruments are voided, the losses will greatly exceed all previous losses, and somebody will be on the hook for those losses. It’s not just market risk losses, it’s losses as a result of gross negligence.

It could get incredibly messy.

[SK in CV]

[quote=Kingside]This strikes me as pure politics. If an attorney general thinks there is a violation of law, they should start an enforcement action, not issue the equivalent of a press release inviting consumers in foreclosure to contact them.

[/quote]

I don’t entirely disagree with you here. I certainly agree with you on the process part. But I don’t think it’s purely politics. The problem is that MERS is acting as the nominee trustor on these trust deed tranfers and all subsequent transfers. Some jurisdictions don’t have a provision for nominee trustors (or at least some courts have held this to be the case.) So trust deeds get transfered, and MERS remains as nominee owner of record. In jurisdictions that have a mandatory 90 day period for recording transfers, and may not recognize MERS nominee status, that’s a very real problem.

I don’t know if California has this 90 mandatory recording law. Nor do I have any idea of exactly what the remedy is for not recording transfers within the 90 day period. It seems draconian that it invalidates the security interest, thereby voiding the lien.

UCGal may have hit on an important issue, i.e, the various jurisdictions losing fees for recordings, which probably number in the millions.

In any case, this is potentially a huge issue. And will vary state by state. There is a humungous potential liability to the investment banks that sponsored all of the MBS trusts, in addition to those that actively managed those trusts. If the security instruments are voided, the losses will greatly exceed all previous losses, and somebody will be on the hook for those losses. It’s not just market risk losses, it’s losses as a result of gross negligence.

It could get incredibly messy.

[SK in CV]

[quote=Kingside]This strikes me as pure politics. If an attorney general thinks there is a violation of law, they should start an enforcement action, not issue the equivalent of a press release inviting consumers in foreclosure to contact them.

[/quote]

I don’t entirely disagree with you here. I certainly agree with you on the process part. But I don’t think it’s purely politics. The problem is that MERS is acting as the nominee trustor on these trust deed tranfers and all subsequent transfers. Some jurisdictions don’t have a provision for nominee trustors (or at least some courts have held this to be the case.) So trust deeds get transfered, and MERS remains as nominee owner of record. In jurisdictions that have a mandatory 90 day period for recording transfers, and may not recognize MERS nominee status, that’s a very real problem.

I don’t know if California has this 90 mandatory recording law. Nor do I have any idea of exactly what the remedy is for not recording transfers within the 90 day period. It seems draconian that it invalidates the security interest, thereby voiding the lien.

UCGal may have hit on an important issue, i.e, the various jurisdictions losing fees for recordings, which probably number in the millions.

In any case, this is potentially a huge issue. And will vary state by state. There is a humungous potential liability to the investment banks that sponsored all of the MBS trusts, in addition to those that actively managed those trusts. If the security instruments are voided, the losses will greatly exceed all previous losses, and somebody will be on the hook for those losses. It’s not just market risk losses, it’s losses as a result of gross negligence.

It could get incredibly messy.

[SK in CV]

[quote=Kingside]This strikes me as pure politics. If an attorney general thinks there is a violation of law, they should start an enforcement action, not issue the equivalent of a press release inviting consumers in foreclosure to contact them.

[/quote]

I don’t entirely disagree with you here. I certainly agree with you on the process part. But I don’t think it’s purely politics. The problem is that MERS is acting as the nominee trustor on these trust deed tranfers and all subsequent transfers. Some jurisdictions don’t have a provision for nominee trustors (or at least some courts have held this to be the case.) So trust deeds get transfered, and MERS remains as nominee owner of record. In jurisdictions that have a mandatory 90 day period for recording transfers, and may not recognize MERS nominee status, that’s a very real problem.

I don’t know if California has this 90 mandatory recording law. Nor do I have any idea of exactly what the remedy is for not recording transfers within the 90 day period. It seems draconian that it invalidates the security interest, thereby voiding the lien.

UCGal may have hit on an important issue, i.e, the various jurisdictions losing fees for recordings, which probably number in the millions.

In any case, this is potentially a huge issue. And will vary state by state. There is a humungous potential liability to the investment banks that sponsored all of the MBS trusts, in addition to those that actively managed those trusts. If the security instruments are voided, the losses will greatly exceed all previous losses, and somebody will be on the hook for those losses. It’s not just market risk losses, it’s losses as a result of gross negligence.

It could get incredibly messy.

[SK in CV]

[quote=Kingside]This strikes me as pure politics. If an attorney general thinks there is a violation of law, they should start an enforcement action, not issue the equivalent of a press release inviting consumers in foreclosure to contact them.

[/quote]

I don’t entirely disagree with you here. I certainly agree with you on the process part. But I don’t think it’s purely politics. The problem is that MERS is acting as the nominee trustor on these trust deed tranfers and all subsequent transfers. Some jurisdictions don’t have a provision for nominee trustors (or at least some courts have held this to be the case.) So trust deeds get transfered, and MERS remains as nominee owner of record. In jurisdictions that have a mandatory 90 day period for recording transfers, and may not recognize MERS nominee status, that’s a very real problem.

I don’t know if California has this 90 mandatory recording law. Nor do I have any idea of exactly what the remedy is for not recording transfers within the 90 day period. It seems draconian that it invalidates the security interest, thereby voiding the lien.

UCGal may have hit on an important issue, i.e, the various jurisdictions losing fees for recordings, which probably number in the millions.

In any case, this is potentially a huge issue. And will vary state by state. There is a humungous potential liability to the investment banks that sponsored all of the MBS trusts, in addition to those that actively managed those trusts. If the security instruments are voided, the losses will greatly exceed all previous losses, and somebody will be on the hook for those losses. It’s not just market risk losses, it’s losses as a result of gross negligence.

It could get incredibly messy.

[SK in CV]

[quote=patb]does anyone see this as important?[/quote]

Potentially. But I find it hard to believe that the courts will simply allow the voiding of tens of thousands of mortgages. I think the decision to use MERS was made in good faith, though that certainly doesn’t make it a decision that is supported by law. It does kind of follow some other court decisions finding that MERS has a standing problem. It’s a mess. I am curious whether there are states with similar laws that will follow. It is important.

It wouldn’t, by the way, void the notes, only the security interests, converting the secured notes into unsecured notes. It would stop ordinary foreclosures and probably lead to more bankruptcies. I wonder what the DC homesteading laws are like.

[Author]

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