December 05, 2007

FLASH: Bush and Paulson to announce new comedy routine tomorrow - first joke is to pretend that housing gamblers get a 5-year freeze on toxic loans


Don't believe it.

Just like the "Super SIV", "Mission Accomplished" and Bush's "Social Security Reform", this bank-failure-avoidance-scheme is going to be just another epic failure of this incompetent and corrupt administration.

There will be lawsuits filed as early as tomorrow against such a stupid plan (just think if you took a toxic loan out the day before the window started, or a bondholder who expected contracts to be worth something), and some hilarious unintended consequences - namely EVERY SINGLE HOMEDEBTOR WITH AN ARM SHOULD STOP MAKING PAYMENTS TODAY.

Plus many of these homedebtors so graciously "helped" are going to walk away anyway - because the value of their home is plummeting so hard and so fast it's better to turn in the keys and tell the bank to F off.


Bush to outline 5-year rate freeze plan: sources

WASHINGTON (Reuters) - President George W. Bush is expected to outline on Thursday a plan to freeze mortgage rates for five years for many U.S. homeowners facing sharp increases in their monthly payments, industry sources said on Wednesday.

Final details of the plan are still being worked out after a trade group that represents large mortgage investors presented its framework for implementing a broad rate freeze to the Treasury Department late on Tuesday, the sources said.

The sources, who are familiar with details of the trade group's pitch, said the plan envisions covering subprime loans taken out between January 1, 2005, through the end of this past July, with rates that are due to reset over the coming 2-1/2 years.

An estimated 1.8 million U.S. homeowners who took out loans with low teaser rates face pricey loan resets next year alone, the Federal Reserve has said. Officials fear half a million borrowers risk losing their homes.

119 comments:

michael said...

hmmm...and limbaugh, hannity and levin think hillary is a marxist.

nice.

Anonymous said...

I need to get bad credit so I can get lower rates than people with good credit. The world is being turned upside down by the morons in government.

consultant said...

Keith,

I feel like we're in some kind of movie. It doesn't feel real. But it is.

Bush, Paulson and Co. just told the world, f you!!!!

Wouldn't this pass as "high crimes and misdemeanors"? He has done more to undermine this country than any President in history.

I think the entire administration has gone nuts. You know, like that Jim Jones in Guyana crazy/tragedy.

How will ANYONE be able to judge the value of property/mortgages from here on out?

consultant said...

What about the dollar?

Run by monkeys? How about monkeys on crack.

Protect the criminals, gangsters, etc.

Hey world, look, over here! Come look at the swell way we cover up our crime and corruption. We do it real good!

Next year, we'll have some real safe stuff for you boys to invest in.
------------------
A fully realized banana republic!

garyk said...

Jesus H. Christ. This makes me want to hurl the crap I ate earlier at the mexican lunch buffet all over my keyboard. Who do they think they're fooling with this crap?

Malcolm said...

I'm repeating myself (as usual), but I still see it this way:

Your next door neighbor sets his house on fire.

He then sets your house on fire.

He then comes pounding on your door, saying "come, let us fight the fire together"

Mister Orange said...

un-freaking-believable! Let's just give free passes to people because they were too ignorant. Maybe I should have bought something so I can just breeze by. Argh.

Andrew Hac said...

I just saw a whole bunch of fat, beer-belly hanging out over the bell Americano male dancing on the street, laughing, drinking Red Dog beer and shouting: "Hooray, no payment for 5 more years on the shack. We can use that dough to swill down some more booze...". And the missus can start shopping again at Walmart now.

Isn't this country great or what ???

CNBC Tool said...

I just bought 1000 shares of CITI. Thanks God for GWB.

Frank@Scottsdale-Sucks.com said...

Wow, Bush really defies definition. He's not a conservative, a liberal, or a libertarian, and yet he's all three given the day of the week.

The same guy who is so anti-tax now wants to give a freebie handout to looters who knowingly "bought" homes they know they couldn't afford.

F*ck that.

Maybe Bush is a true patriot and this is a big scheme to incite revolution. Nah, I doubt it.

keith said...

The Federal goverment, instead of prosecuting mortgage fraudsters, is looking to bail them out.

At this point HP'ers, a revolution against the state would be called for

We are no longer a nation of laws. We're a nation of anarchy and lawlessness

+++++++++++++

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

Anonymous said...

Wow, Bush really defies definition. He's not a conservative, a liberal, or a libertarian, and yet he's all three given the day of the week.

No, he's just stupid. Which creates the illusion of inconsistency.

keith said...

URGENT:

IF YOU WOULD LIKE TO BE INTERVIEWED BY THE WASHINGTON POST ON THE RECORD TO EXPRESS YOUR OUTRAGE (AND DOUBT) ABOUT THIS STUPIDITY, CONTACT ME AND I'LL PUT YOU IN TOUCH WITH THE REPORTER

Anonymous said...

Just read that UCLA/Anderson predicting a recssion NOT likely. (see LA Times). I thought these guys were credible. What gives???

Anonymous said...

"There will be lawsuits filed as early as tomorrow against such a stupid plan"

Not so. Hitlery is introducing legislation that would ban these lawsuites. Dems will vote it through and Bush will sign it.

Bush and Hillary will do whatever it takes to make this bailout happen. Hillary wants votes. Bush doesn't want to be remembered as the guy that kicked 2 million people out of their homes.

Anonymous said...

I don't think it matters what the Government does to help out these people. Thanks to sites like yours, the truth is out and now everyone knows the game and how to play.

Keep making your payments suckers. When it comes time to sell, just don't try selling your overpriced house to me :-)

Anonymous said...

If I may be the devil's advocate here:

First off I am a renter. I sold my house last year and made a nice profit. I plan on buying again soon, sometime next year. That being said here is why I think this is NOT a bad idea.

House prices I think we all agree will continue to fall with or without a bailout. So this will not take away from our collective wish of lower priced housing.

What it will do though is contain the damage to the overall economy. Yes these people are getting a freebie courtesy of the govt. But who isnt there days? Tens of millions of Americans work for the govt. Tens of millions receive welfare, and food stamps and medicare, etc. This is just one more govt handout. One of thousands.

And let's be honest, if the 5 million of whatever number of foreclosures did occur, we could really be talking depression. Banks would fail, panics would happen, unemployment would skyrocket. I want to buy a cheap house, I don't want a repeat of the 1930s happening.

So yes the bailout rewards stupidity. Yes it rewards the bankers. Yes it is wrong in many ways. But at the end of the day it is better than what might be the alternative.

Begin firing at me now....

Anonymous said...

ooooh the HPers are angry. What's the matter boyz? Is it starting to finally sink in that your plans for pennies on the dollar homes are kaput?

Oh and the dow was up 200 yet again.

Man I'd hate to be in your shoes these days. That's what you get for taking finanical advice from a blog.

Anonymous said...

Correct me if I'm wrong, but with rates not reseting, the bank will earn less money than predicted. I can't begin to enumerate the consequences, but as I see it, there has to be some compensation for the banks. Do rates reset more after the 5 years than they would have normally ? What about the assets backed by these mortgages?Who will pay the difference?Should I ask Marie out tomorrow? These are uncertain days indeed.

brokersleaveyoubroke said...

I read yesterday that this plan would likely crush fannie and freddie since they own a boatload of these mortgages.
Also, the only people who get the extension are people who can prove they can't afford to pay the higher reset rate. If you can afford the higher payments you get no help. So, people who lied on the mortgage application and said they could afford the house now will get help if they show they actually can't afford the house. Of course, when they apply for the extension they'll lie on the application form since this administration rewards people for lying.
And to administer this new program they'll need to create a huge bureaucracy which the taxpayers will happily pay for. Of course, like Katrina aid, fraud will be rampant. I'm sure Paulson will get reputable firms like Countrywide to help administer the program. But wait, aren't republicans supposed to be against welfare and big government?

mhrist said...

I heard that they are planing to create a fund that the those subprime would go to, the bank will pay the money to the banks so they can pass it back to investors.
But this will not really help with the problems facing us, namely price loss, equity crunch, and prime borrowers and paid off borrowers that turned to the great new loans, equity machines, and selling for 2x or 3x what it costed you. If prime borrowers had great mortgages in 2000, they have definetly refinanced, sold and moved up, took excess equity, or all of those. What you think that a guy that bough his house 95 stayed on the sidelines when his house jumped two-fold in an year or two, and he was getting hammered by offers from buyers, lenders, line-of-credit, equity managment, and just about everyone that happens to pass on the street. Yea right. Like the statistic that we have 5 trillion of good loans until 2000, and the next 5 tril are possibly bad. I would say that the next 5 tril are bad, and the ones before 2000 have rotten because a huge part(no statistics on that tought) has been just converted into bad stuff.
For instance, if I bought a house in '95 for 100k (those 100k go into the good ol' pool of 5tril.) I had a good affordable loan and all that. In '05 I get this nice agent telling me there is a line to buy my house and I can easily get 300k. And he can get me in a mansion, in the best neighborhood for no money down or maybe 20-30k, and a lower monthly payment too. On top of that I will be eligible for all types of lines of credit, us the value of the mansion is going up around 20% per year.) And it is a mansion for god sakes. So you see, this is what happend with all those loans made in the '90. They got transfered to the new crap dead. In 2000 we had 4.5 tril good, and possibly .5 tril bad debt. In 2007, I think those numbers reversed and we got another 5 tril of crap. They can't stop it with a puny executive action and they know it.
I am going to jail and I delayed it so I go after the hollidays. And I am pretty sure they feel the same.

Frank@Scottsdale-Sucks.com said...

Yes these people are getting a freebie courtesy of the govt. But who isnt there days? Tens of millions of Americans work for the govt. Tens of millions receive welfare, and food stamps and medicare, etc. This is just one more govt handout. One of thousands.

Umm, if we want to move things in a better direction, we need to REDUCE government handouts, not INCREASE them.

ooooh the HPers are angry. What's the matter boyz?

What's the matter is we're the only people left who give a s*it about the future of this country.

Let me guess, you're one of those moocher looters who bought a toxic loan and now you're thrilled that you get to keep it under this plan instead of going to bankruptcy court where you belong.

Anonymous said...

Anon wrote: "No, he's just stupid. Which creates the illusion of inconsistency."

Well, at least he seems to be consistently stupid - ;>}

Smug Bastard

Happy Homeowner in the Stix said...

Looks like some people got an early Christmas/Chanukah present.

It almost makes me wish I signed up for an ARM....just to tick off some HP'ers.

(Calm down, relax....it's not going to help me at all.... :) Was a good girl and got the standard vanilla 30 year fixed. I'm just not going to get my blood pressure going into the stratosphere about someone getting a break that I didn't.)

Anonymous said...

This shows how scared they really are

Anonymous said...

People who took out 30 year fixed loans should sue for the teaser rates now

brokersleaveyoubroke said...

Also, 200 years of contract law.......flush. I expect some test cases to be fast tracked to the supreme court in record time.
All these securities that were sold were backed by contracts and now Bush and Paulson have said that all those contracts are null and void. After this I don't see why any investor in the world would put money into any American security when the president can say that the terms of that investment are null and void. The people who are getting f#$%@d here are all the people who bought asset backed bonds

Anonymous said...

(Calm down, relax....it's not going to help me at all.... :) Was a good girl and got the standard vanilla 30 year fixed. I'm just not going to get my blood pressure going into the stratosphere about someone getting a break that I didn't.)

December 05, 2007 10:21 PM

--

It will help you. If your neighbor doesn't foreclose your house value improves as well.

This is the reason why aside from renters, nobody will complain.

And why HPers once again lose.

Random said...

This isn't about borrowers. This is but one of many ways they're shoring up the balance sheets of all financial institutions.

"And let's be honest, if the 5 million of whatever number of foreclosures did occur, we could really be talking depression. Banks would fail, panics would happen, unemployment would skyrocket. I want to buy a cheap house, I don't want a repeat of the 1930s happening.

You don't get it. Debt got us into this mess and more debt is supposed to get us out????. ( Municipal bonds are gonna pay for this. Remember?)

Anonymous said...

IMHO this is political smoke and mirrors. First, one set of letters to consider. L.I.B.O.R.

Look it up and look up what drives most of the variable rate mortgages out there. It is a rate that the Fed has no control over the spread of L.I.B.O.R. over the Fed overnight rate has been steadilly growing for months now. If lenders have to put a freeze on charging the contract payment, you can bet that they will be making an off book entry as to the amount the idiot debtor owes. YOu don't really think they are going to forgive this interest do you. Sorry Pooky, but you still owe it you just won't be charged all at once. We'll bleed you into eternity.

Second, many of the mortgages that are now defaulting are not even into the reset phase of the game. They are defaulting even with the teaser rate still in place.

Third, standards (KEY WORD HERE) are constricting back to where they were before this fiasco started - translation sub-prime nation - fewer real buyers.

Read McElvaney's description of the 20's and 30's in "The Great Depression" and you'll see the parallels between what politicians did then and what they are doing now - smoke and mirrors in a bid to get votes.

Market forces always have been and always will be far greater than the collective wisdom/action of Team Bush and Demcorp.

Smug Bastard

Anonymous said...

Bush has an announcement?

So you know the middle class is getting f*cked, while the cronies are going to make billions.

I told you that evil GOP wasn't done with your wallets yet...

Hey, you geniuses voted those two oil men bastards into office TWICE, so don't come crying now.

mhrist said...

Basically, they will create a fund. The bank goes thru what they own and submit applications for the loans, like they do right now with fannie. Anyway, the gov fund looks into the loan, if it falls within the criteria and ranges they set they buy the loan from the bank, for I suppose full price. This is why the banks are on board with it and they don't need the investors to be on board. Basically, they tried to have fannie and fredie implement those criterias and it didn't work, so they went and made bush and co make it for them.
Now after the government fund purchase those loans, they can freeze the rates, lower payments and basically do whatever they feel like.
It wouldn't work otherwise, since it will infringe on some fundamentals such as contract law and law in general, for electing laws for the past is not something the government can even do, in reallity it doesn't even need a mention in the law of the land since it is such a paradox. I mean, you know how some countries go to wars with other countries when, say, they nationalize the oil industry in which the first country or a business of that country has an interest in. I mean contracts are not only in America, a lot of foreign capital is also at play. Like if you go and say to the Chinese, 'Yo, the last ten years you worked your asses off and send us all this crap? Well, it is for nothing but a screwed up landscape in China. Today, we change our currency, from Dollar to Shmolar.'
'Surely', say the Chinese dictator with a huge army and pretty pissed of industry,'you will allow some exchange between Dollars and Shmolars!' 'Brouhaha,' The fat American, holding his fat tummy, in Chinese Armani suit laughs,'who would want to buy this crap? We just got rid of it 'cause it is worthless us we are, but obviously can't get rid of ourselves. Were are we going to go?'
Actually, it is pretty sweet that China has so many people, and are far always, and we are so fat and useless, we are not even worth the price of them coming here and enslaving us, or are we? They can just come and colonize it here, kill us all. Kind a like we did with the Indians.
Like, I come from this country called Bulgaria, and we have a saying there, 'For Bulgaria to be good economically and all, they need to just declare war on the US and surrender immediatly.' It might be changing, the joke that is.

keith said...

100 years from now, this will merit a sentence in a history book:

"And then, in an election year ploy, the wildly-unpopular President and his Treasury Secretary, who previously was the head of Goldman Merrill Citi Sachs (formerly Goldman Sachs), who created the CDO mess, announced a "subprime bailout plan" that would keep the "teaser rates" of toxic loans for five years longer than contractually called for.

Like many other Bush initiatives, this one failed as well, as market forces and lawyers took over"

Anonymous said...

Why is the government involved in a private enterprise issue?

resisting husband said...

Jesus christ this pisses me off. I am a person who is graduating from school this year (my wife graduates too) and we would like to start a family, get a house (not for any reason other than a permanent place to put our root down) and do the whole "life" thing we have put on hold for school.

Our plan was to stack up worthless US dollars, and let these ARM resets filter through, laying waste to a majority of my city's homedebtors (Fresno, CA)

http://tinyurl.com/36o974
(this is the center of subprime/ARM/Liars....you name it, overall crap loans

The plan was to buy when there is blood in the streets. With these knuckleheads CHANGING THE RULES IN THE MIDDLE OF THE DAMN GAME we are not sure what to do....still thinking about just building our own place instead.

Anonymous said...

I'm telling you- all that we need is a few fast moving pieces of lead...

Shabba said...

This won't matter one bit. Now mortgage financing will completely dry up. It's likely this problem will become even worse. We're going from a bunch of foolish people who can't afford the loans they got into to no one being able to find financing to buy a home because all of the investors left.

Anonymous said...

For the last time, they are not "THIER" homes...

Anonymous said...

Cheerleaders, we still have to wait and see if it really works. I bet $100 that won't work and the meltdown will continue. You just don't erase such a humongous mess overnight by giving a bailout to flippers and broke wannabes.

Are you guys forgetting that the availability of CDOs was the only reason for such sales growth? CDOs and SIVs are bye-bye now. Who's the brave banker who's going to finance all the new sales during a recession?

Anonymous said...

The idiots think this will save housing. The only thing it will do is wipe out ARMs since no lenders will trust that they will be paid when the rates reset. Interest rates will skyrocket as investors reprice the risk of the government intervening on behalf of borrowers. Now it will spread more quickly and deeply into the economy.

Anonymous said...

It's not a failure at all. Cheney moved his assets out of U.S. currency last year, just like the orange guy who dumped his stock. Everything is going according to plan.

Happy Homeowner in the Stix said...

It will help you. If your neighbor doesn't foreclose your house value improves as well.

Only if I was selling my house next week, which isn't likely, or I was going to use my house as an ATM, which I have never done and never plan on doing.

If I hold on for the next twenty years like I would prefer to....nope, not going to help me much at all.

Anonymous said...

It will help you. If your neighbor doesn't foreclose your house value improves as well.

Maybe it helps you, but it screws your children and grandchildren.

Princess Mononoke said...

brokersleaveyoubroke said...
>>Also, 200 years of contract law.......flush. The people who are getting f#$%@d here are all the people who bought asset backed bonds.
December 05, 2007 10:28 PM

My thoughts EXACTLY! This situation is really bad folks...

Can anyone say "Frankenstein"???

Tom said...

What it will do though is contain the damage to the overall economy. Yes these people are getting a freebie courtesy of the govt. But who isnt there days? Tens of millions of Americans work for the govt. Tens of millions receive welfare, and food stamps and medicare, etc. This is just one more govt handout. One of thousands.

I have to correct you on that assertion. This will not have any effect on the overall economy's health. In actuality, a foreclosure would be better for the overall economy than assisting these people with their mortgages. Here's why:

1) This supposed "bailout" is little more than trying to fix a crack in Hoover damn with chewing gum. Its effect is far too marginal to have any bearing on the larger scale issue. Too few individuals will benefit from these frozen rates out of the entire whole. And remember, this only effects a small percentage of the actual subprime market.

2) This plan has nothing to do with future mortgages being offered. From the standpoint of future home owners, they see no benefit. And in actuality, by having to artificially freeze these interest rates for a select few, the banks and lenders will need to correspondingly increase LIBOR rates. (They have to make money, remember?) That combined with the increased scrutiny on any new loans issued and new requirements for larger downpayments will decrease the buyer pool even further.

3) Home prices are dropping. By freezing certain individuals in their current homes, which are a depreciating asset, you are essentially merely delaying the inevitable. Assume a "frozen" loan owner keeps up with payments now for five years. 5 years down the road, he is now back to where he started with increased interest on his toxic loan. But now, he is holding a vastly devalued property. All that the government did to this poor sap was have him bail water out of the Titanic while everyone else got on life rafts.

The point is, there is NO solution to this housing bubble. It is not a problem to be solved. It is simply a condition of excess that will resolve on its own. Any actions taken by the government will do nothing but delay the inevitable.

Look at Japan, which is the only viable frame of reference we have for an asset bubble of this magnitude. All the policies and all the interest rate cuts did nothing to stave off the housing bubble deflation.

In the end, the solution to this problem is creating legislation and policies to help mitigate the next bubble from forming. Unfortunately, the government is thinking only short term. What should be occurring is that these people are allowed to be foreclosed on and that banks and hedge funds are forced to take it in the ass. And subsequently, individuals who hold high positions in our banking institutions that helped fuel this debacle should find themselves in Club Fed.

That will introduce accountability into the system again. Once the country (and Wall Street) learns there is no free lunch, we will normalize.

Anonymous said...

We can do this, Suzanne!

Edgar said...

I hope he gets a toomah.

Anonymous said...

Only 7 arrests in that cesspool of criminals? What a joke!

Task force arrests seven for mortgage fraud

Seven more people have been arrested for mortgage fraud, and new legislation is being proposed to increase criminal penalties for people convicted of real estate fraud, Miami-Dade County Mayor Carlos Alvarez said in a news release.

The arrests were made by the Miami-Dade mortgage fraud task force, which was formed in September.

Included in the arrests were:

* Rafael Diaz, accused of defrauding a lender by enlisting the help of a straw buyer, loan processor and others for the fraudulent purchase of a property located in Tavernier. The property was closing for $800,000, but fraudulent documents listed it for $1.8 million, leaving $1 million for Diaz and others involved.

* Mariana Navarrete, accused of selling a residence to a buyer twice, as the victim obtained two mortgages for $415,000 each. Alvarez said she used a quit claim deed to transfer ownership to a company she was affiliated with, leaving the victim with a mortgage, but no property. Last month, Navarrete was arrested and accused of recruiting family members to steal the identity of an employee and using it to take out loans.

* Richard Jacob Gutierrez, accused of obtaining a $260,000 mortgage from a private lender on a home that didn't exist. Gutierrez proclaimed to be the owner of the property, used as collateral for the loan.


http://tinyurl.com/ypdzj9

Anonymous said...

Holy fuck so much drama here from you drama kings/queens. Oh no poor people are going to be allowed to stay in their homes. Bush is such a monster for this.

Have some compassion.

Princess Mononoke said...

Smug Bastard said...
>>Market forces always have been and always will be far greater than the collective wisdom/action of Team Bush and Demcorp.
December 05, 2007 10:29 PM

That is the HOPE I am holding on to! The Tsunami waves will resume in January after the holidays and Justice will prevail!!! Look out Tangelo the SEC a commeth...

Wall Street is propping up the markets right now. Their year-end bonus is based on performance.

Lady Di said...

As the wise Peter Schiff recently said, credit as you know it is OVER, and this 5 year ARM freeze deal is going to put the nail in the coffin.

Cash will be the name of the game, and as a Cash Only customer, I couldn't be happier.

Can't say the same about the credit binge consumer junkies. You have no idea just how bad it is going to get.

Here's to Cash!

Hip Hip Hooray!

Happy Homeowner in the Stix said...

Holy fuck so much drama here from you drama kings/queens. Oh no poor people are going to be allowed to stay in their homes. Bush is such a monster for this.

Have some compassion.


C'mon, it doesn't feel like Christmas unless we toss Tiny Tim into the street!! :p

coke adds life said...

These b@st@rds are bailing out a boat with no bottom. A classic pump-and-dump.

They are essentially recognizing that the "asset" has depreciated significantly, and getting 2% (or even 0%) return on that fake basis is better than taking the massive hit if they have to mark to market.

COKE OUT!

Anonymous said...

What a clusterf***

This will piss off the 99% of Americans who won't benefit

Anonymous said...

happy moron it is hurting you if you plan on stayig for 20 years. you see, if your house value is assesed at say $200K today you pay tax on $200K.

If your neighbor forecloses and drops your home value to $175K you will pay tax on $175K. And that $25K difference will be there for thenext 20 years.

But with the bailout your neighbor doesn't foreclose and you will be paying a higher tax.

Even if prices start going up again you will always be $25K ahead of where you should be since your baseline is $25K too high relative to where you would be absent the bailout. So enjoy paying more tax for 20 years. And also more insurance since your insurance is in part based on the value of your home.

No way around this, everyone gets hurt by this idiotic plan one way or another.

Frank@Scottsdale-Sucks.com said...

No, he's just stupid. Which creates the illusion of inconsistency.

At least people can no longer refute my theory that American colleges & universities with their explosive tuition inflation is just one big scam to bilk money out of kids & families who've been brainwashed to go to college at any cost. Bush is the product of both Harvard and Yale - the only President to hold degrees from *two* Ivy League schools - and look at how "smart" he is.

The only thing it will do is wipe out ARMs since no lenders will trust that they will be paid when the rates reset. Interest rates will skyrocket as investors reprice the risk of the government intervening on behalf of borrowers.

Agreed, which is a good thing because it will accelerate the return to real market values on homes and force people to only "buy" what they can afford.

Anonymous said...

Hey, dumbas" realators and realestate flippers, this changes nothing. Just poours gas on a fire. I would try to explain it to you but your no smarter than Bush.

Anonymous said...

ADP just reported today that the realty clerks are going back to their McDonalds jobs! This is good news?

Anonymous said...

The US has no credibility worldwide anymore

i've had it... said...

After today's bailout announcement, I've decided to contribute to Ron Paul's campaign. I don't agree with everything he says, especially on foreign policy, but I've had it. I just want both the Dems and Repubs to go away. The Congress is tantamount to Organized Crime; the Executive Office has become a tyranny.

I'm wondering what "that" government inside the Beltway really is? I know it's not the American government as defined by our Federal Constitution. It's a combination of criminals, leeches, conmen, conwomen, idiots, morons, assholes, money addicts, and power-holics.

Someday I hope to live in the country in which I grew up: America.

Anonymous said...

I don't think Congress can pass a law that forbids mortgage bondholders from suing over this. That sounds like depriving them of property without due process. Sounds like a violation of the Fifth and Fourteenth Amendments to me.

Happy Homeowner in the Stix said...

happy moron it is hurting you if you plan on stayig for 20 years. you see, if your house value is assesed at say $200K today you pay tax on $200K.

If your neighbor forecloses and drops your home value to $175K you will pay tax on $175K. And that $25K difference will be there for thenext 20 years.

But with the bailout your neighbor doesn't foreclose and you will be paying a higher tax.

Even if prices start going up again you will always be $25K ahead of where you should be since your baseline is $25K too high relative to where you would be absent the bailout.


Awww....trying to make it seem like you "care" that I'm possibly going to pay higher taxes. But the real reason it chaps your ass is I might get an extra 25k when/if I sell if you're right. Twenty years from now, that might be worth what 6k is now. BFD.

Sweetheart, let me fill you in on an old Wall Street saying. "Bulls make money, bears make money, but pigs get slaughtered."

Oink, oink, oink.

Anonymous said...

Relax, our government is confused about morals, truth and it started by greed and lack of self control. Don't worry about wether or not they bail out the country by printing useless dollars, the ultimate handwriting is on the wall. EVERYONE WILL PAY, time has a way of recouping it losses just the same way "that what goes up must come down."

bickerer said...

Anyone see Ben Stein suggesting malfeasance on the part of Goldman Sacks (for shorting something they underwrote), and then Paul Krudman sticking up for sacks and suggesting Stein's column was inappropriate.

Who would have guessed that series of events.

Anonymous said...

"Oh no poor people are going to be allowed to stay in their homes."

Are you trying to win the election and become King of StupidTown?

This is to dupe the shmucks into staying in their houses and paying mortgages on depreciating assets. In five years they will be staring at the bottom of the bubble underwater far more then now! Any they think, "awright! my rate is froze up!" This is so evil hahahahaha, its so evil its funny.

This is to BAIL OUT THE BLOODSUCKING BANKS.

Ed said...

"I don't think Congress can pass a law that forbids mortgage bondholders from suing over this. That sounds like depriving them of property without due process. Sounds like a violation of the Fifth and Fourteenth Amendments to me."

--

You think just because something is unconstitutional it won't be done by the gov't? How naive of you.

Eric said...

"Holy fuck so much drama here from you drama kings/queens. Oh no poor people are going to be allowed to stay in their homes. Bush is such a monster for this.

Have some compassion."

But why would you want to stay in the house when it's going to do nothing but lose value? They'd become renters with the responsibility of mortgage owners. Are people so brainwashed that they can't understand this?

Anonymous said...

Two can play by this game...

They ai'nt seen nothing yet.

Anonymous said...

But Larry Kudlow and Jim Cramer say free markets work better and that everything will be okay. By the way can the government freeze my car payment and credit card loans and give me free pass for a few years?

consultant said...

"If I may be the devil's advocate here:"
---------

It's this line of thought that got us into this trouble.

Anonymous said...

mhrist wrote: Basically, they will create a fund.


That is already there. It is called the Federal Home Loan Bank. Actually, the government has an opportunity here to make some serious jack. Buying up blocks of mortgages in bulk for say 30-40 cents on the dollar and collecting back payments from over extended Joe Six Pack and Jane Nine to Five even with a "freezer on the teaser" would net nice profits for the FHLB if done correctly. A nation in debt to its government (in a round about sort of way) and a middle class beholden to its government for the roof over its head - deliciously Orwellian don't you think?

Smug Bastard

tater said...

Quote: "if it falls within the criteria and ranges they set they buy the loan from the bank, for I suppose full price"

If you are comparing this "plan" to the RTC of the 90's, then there will not be a full price paid to the banks. In fact, the government helped itself to a FAT discount during that time.

i've had it... said...

anon said: "I don't think Congress can pass a law that forbids mortgage bondholders from suing over this."

Guess what, the Congress can pass whatever law that it wants and it will go into effect until such time that the Supreme Court says it's illegal.

We have seen the Congress pass illegal laws, like McCain-Feingold, and the Court actually upheld the anti-1st Amendment provisions of it.

So there you go: as long as the SJC agrees with Congress, whatever those criminals pass as law will indeed be the law.

Does that make right? Of course not. But we are not dealing with the American govt. anymore...it's a govt. that does whatever it wants whether its within or outside of the limits set forth in the Constitution. Go read it and then review what "that" govt. inside the Beltway has done over the past 15 to 20 years and you'll know what I mean.

vegas crash watcher said...

This plan or just the talk of such a plan will lead to an even greater credit crunch. Who would be stupid enough to lend money when contracts aren't being enforced? As a renter, this is great for me, as house prices will collapse even more due to no buyers being able to get a loan.

Anonymous said...

The socialists have finally won.

Anonymous said...

Say bye-bye to foreign investment in the USA. Come to think of it, say bye-bye to domestic investment in the USA. The assclowns in DC managed to turn a recession into a depression. Leave it to the government to fix things.

Anonymous said...

At first I thought Robert Schiller was exaggerating when he said there would be no more credit in America by the end of 2008. With the passage of this Hugo Chavista type law, we will end up like Venezuela with 50% inflation and no funding for new businesses and projects.

Anonymous said...

I think it's the bondholders fault for lending money to monkeys and pigs. They were more reckless than the borrowers, throwing money around like candy on Halloween. I hope they all get screwed so this never happens again.

Anonymous said...

Bush's plan is the ultimate fiat play...

By shoring up the banks and the investors, and allowing the sheeple to stay in their McMansions by freezing the interest rates, fiat currency will be flooding the market. Except for the renters such as myself, everybody else gets paid, although with declining value dollars.

I hate to say it, but I would rather suffer and fall behind as a renter than to see this nation and the world enter another Great Depression.

I am voting for Ron Paul because he wouldn't allow this garbage... but in the meantime, let the sheeple have their cake and eat it too... Stupidity will abound, and eventually renters like me will be able to pick up the pieces when their world falls apart.

Clotpoll said...

mhrist (at 10:12 PM)-

Perhaps when you go to jail, you will learn how to communicate in the English language.

Good luck to you.

Anonymous said...

After years of complaining about Hugo Chavez nationalizing Venezuela's energy industry, Bush decides to nationalize the US financial industry.

Anonymous said...

This won't change a thing. And funny how people who post here assume everyone who didn't buy a home can't own any other financial assets. The dow is up, big deal. Doesn't change the underlying macro enviroment (which blows). I still own stocks, and will continue to buy whenever I find great businesses selling for a discount.

All they are going to do is extend the pain, and eliminate ARMS as an option for home buyers. That actually will be a catalyst for lower home prices.

Just a quick question, how many of you would make make "investments" in mortgages knowing the terms of your contract could be changed at the whims of a politician? OUCH. Big mistake.

Last night had dinner with an executive of a brick manufacturing company. It amazes me how oblivious Americans are to the aftermath of a BUBBLE. They take years to deflate. NOT MONTHS. Go study what happened to the Nasdaq when it blew up. YEARS. As the bubble deflates you will still have bounces. The people who lost the most money when the tech bubble popped were the morons who bought because stocks were down 20%. They got cleaned out. The same is already happening in real estate.

Anonymous said...

Credit crunch. Prices on big ticket items go down because it is harder to get credit.

Alan Barker said...

I don't think its going to work. It's just going to postpone the inevitable that people who can't handle money aren't going to change. Fortuanately Homes in Utah have had good price appreciation and a lot of these people can bail themselves out by selling.

Anonymous said...

For the last time, they are not "THIER" homes...

Don't loose your mind over it.

Anonymous said...

Im looking foward to the
blowback that's comming.

Anonymous said...

Oops, I threw up inside my mouth after seeing the new Paulson's photo for this thread. Thanks a lot, Keith.

Anonymous said...

I'm telling you- all that we need is a few fast moving pieces of lead...

We had that in Omaha today. Didn't turn out too well. It needs to be directed at the enemies, both foreign and DOMESTIC.

Anonymous said...

As long as bitter renters keep paying our mortages is all good! HAHAHA

Bill in AZ said...

It will help you. If your neighbor doesn't foreclose your house value improves as well"

It is people like you who are black marks on humanity as a whole. People like you, who care about nothing but yourselves. Be PROUD of receiving handouts. Be proud of cheering on perversions of the free market, simply because they "raise your home value". You're exactly a scumbag.

And btw, Regardless of what anyone tries to do, fundamental free market forces always win in the end. You are just too stupid to understand that.

Again - be proud of your shitbag values. Hold that chest out as you leech from your fellow man.

But when you find yourself at the bottom, try asking yourself just what exactly you produced all these years. Reflect on how you supported a rigged game, and resisted paying dues at every turn. If you can perform this important act of humility, you have a chance to enlighten yourself, throw away the tin cup, and start improving the world around you.

The Mortgage Guy said...

Anyone who believes this is going do some good, any good at all, is wrong and truly doesn't understand the real problem we are facing.

Lenders aren't lending and going out of business because they cannot securitize mortgages.

No securitization equals no lending.

Mortgage paper cannot be sold now, even while the contractual obligations still have some integrity.

The government arbitrarily changing the mortgage paper, at the expense of those buying it, will kill the paper's integrity and the securitization process for many years to come.

So for all who think this is a good thing, let me spell it out for you. No securitization of mortgages equals no loans equals the real estate market never recovering equals Great Depression.

Anonymous said...

I think Keith is planning a revolution....

But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

Anonymous said...

.



photo caption;



Jazz hands!



.

JD said...

"You just don't erase such a humongous mess overnight by giving a bailout to flippers and broke wannabes."

No, but you give the impression of the federal government "doing" something besides sitting with their thumbs up their asses. Paulson wants to put the sh_tstorm off until his buddies collect their bonuses.

This is a band aid on a severed leg. It won't work and in January we will have a full blown banking crisis. The fed is already printing massively, and to "fix" this problem they will have to lower interest rates 200 bp and pump an additional $2T in liquidity into the banking system.

The USD will be worth 1/3 Euro, and 30 Yen, when this plays out next Spring. My daughter's HS graduation trip to Europe is toast, but I don't have the heart to tell her yet.

Anonymous said...

anon 9:41 said - "Bush doesn't want to be remembered as the guy that kicked out 2 million people out of their homes."

But he will be remembered as the guy who let 12 million illegals get through our borders.

bobbyg said...

brokersleaveyoubroke and others are completely right. How will this bailout be enforced legally if the investors reside in foreign legal jurisdictions? It is simply not enforeable unless the investors someone agree to collude. But this is the prisoner's dilemma: the first one to defect and sell their bonds wins, so everyone will run to the exits at the same time.

Also, talk about cutting of your nose in spite of your face! This move will have two extremely negative knock-on effects, one short term and one long term:
- Short term: Current holders of mezzanine senior RMBS CDO tranches will experience a further loss in market value because, remember, these deal were structured in anticipation of the rate resets. That means these higher rated tranches will receive less cash flow then expected. It might actually help the below investment grade tranches because it might delay defaults which hit these tranches first. But most big institutional investors like pension funds, insurance companies, banks, etc. hold the investment grade debt and they are the ones that we need to worry about experiencing further markdowns
- Long term: Investors will now demand much higher yields on RMBS in the future. But higher yields, mean that the underlying collateral (i.e., the retail mortgages) must have higher coupons. That means higher mortgage rates, which means lower affordability which means less lending which means economic contraction

Clearly, this is all known to the Pols because they have smart advisors that are warning them of these outcomes. But they are so corrupt that they would prefer to prostitute themselves to the sheople in order to ensure their hold on power. I really do not see any hope for substantive change short of a economic upheaval tantamount to the great depression

LauraVella said...

Anon said:"ooooh the HPers are angry. What's the matter boyz? Is it starting to finally sink in that your plans for pennies on the dollar homes are kaput?"

No, I'm laughing out loud because homedebtors think they are saving money by having their interest rate frozen for 5 years - they are still in trouble and dont know it...

This law, if passed, will prompt the spendthrifty to keep buying stuff, because they have a little bit of money leftover... then in five years their homes will be worth WAY LESS and they won't be able to make the higher payments or sell it.

The Bank will be getting an extra 5 years worth of payments out of the dried-up turnip instead of forclosing next year.

Anonymous said...

I don't think there will be any significant bail outs. Think this out for a minute. Bank and investment funds are already in serious trouble from holding bad debts. If you freeze rate, it will be one just one more write down on the loans, as the value of those loans was based on the assumption that the rates would adjust. Freezing rates literally flies in the face of hundreds of years on contract law. Without the rule of law governing loan contracts the mortgage industry would disappear altogether. Who hte hell would buy any mortgage based security or issue a loan when the loan terms can be changed by government fiat.

Anonymous said...

CORRUPTISSIMA RE PUBLICA
PLURIMAE LEGES

It's hard to be an American in times like these. said...

Those are legally binding contracts. How can you just change a contract like that. That's like buying a car and two years later the amount you owe by how much the car has depreciated. You can't do it cuz you signed a contract. What ever happened to the old saying "you are only as good as your word" apparently someone's Word / Contract doesn't mean shit anymore.

Secondly this is not a bill that is aimed at helping the borrowers. If that were the case, they would have done something much more drastic like the presidential canadates are coming up with. God help us if one of them gets elected and actually goes through with their proposal. I figure they are just flapping there gums to stir up votes. Back to the point. This is to help big business and the money men. You know those who profited from all this bullshit and those who will continue to do so. Do you think any of them might want to give back some of those 200 million or 500 million dollar bonuses they were racking in while their companies where doing record business. Seems like maybe when all the write downs start, maybe they should put back into the company.

Our country is just so fucking hell bent against middle income people. Middle income thats funny. I make twice what my mother and father made combined and I'm now middle class. Jezz that's funny I thought I grew up middle class. At what point do we start to gain ground.

Anonymous said...

I don't think Congress can pass a law that forbids mortgage bondholders from suing over this. That sounds like depriving them of property without due process. Sounds like a violation of the Fifth and Fourteenth Amendments to me.
--------------------------------

They can pass any law they like. what you really mean is will it stand up in court. It takes time and money to challenge it.

Bill in AZ said...

Btw, I keep seeing statements similar to this:

"I see where you're coming from, no one wants another human being to be shoved out on the street homeless."

The depth of human ignorance and mental laziness is immeasurable. Why is it so F*&CKING difficult for people to grasp the simplest economic ideas of a free market and the natural balance created by it? That is, why are people simply unable to see the most important thing of all - that for every force there is an equal and opposite force? All this bullshit about "there could be a depression" and "nobody wants anyone out on the street" is sickening ignorance. EVERYTHING has a cost. The cost of "throwing someone into the street" is that another person is able to have a home. Why does that get glossed over? Why don't we hear praise about falling home prices and all the families who will benefit? There is ALWAYS another side to EVERY deal. If someone incurs economic strain as a result of a decision they made in a free market, this automatically means that the "other side" of the deal made a wise decision, and deserves the fruits. Any sort of bailout is theft.

**************************************************
WHY IS THIS SO DIFFICULT TO COMPREHEND?????????????
**************************************************

Bailing out these people is patently wrong, patently ignorant, and patently criminal.

A price has to be paid. Let the free market correct naturally, and it will be over fast; with the greediest and most over-leveraged people paying most of the cost, as they should. Any solution peddled "for the good of the economy" is anything but that. Intervention of the sort going on now is precisely what CAUSED the long, grueling depression of the '30's.

Truth is often hard to see, and takes a lot of learning and humility to uncover. It is shrouded constantly by people who stand to suffer from it. The people pushing these "solutions" are the ones who will benefit from them; NOT YOU.

And just why should whether you benefit or not have anything to do with what is right or wrong, anyhow? If you are someone who made a bad decision and are hailing these measures as they help you financially (at the cost of others who worked for the money you will soon be stealing from them), then for once in your life have some integrity and admit your mistake and pay the price.

It gets so old to listen to people whose opinions on a subject are 100% aligned to their own personal agenda.

Disgusting people, everywhere.

Anonymous said...

If lenders have to put a freeze on charging the contract payment, you can bet that they will be making an off book entry as to the amount the idiot debtor owes. YOu don't really think they are going to forgive this interest do you. Sorry Pooky, but you still owe it you just won't be charged all at once. We'll bleed you into eternity.
__________________________________

This bailout will be a joke. The "freeze" will, in reality, create government-mandated "interest only" loans for the next five years. At the end of that period, you'll owe even more on your mortgage than you do today!

soon said...

I'm with you "I've had it", going over to the Ron Paul camp now.

The US needs to get some integrity and ethics back. The Dems and regular Republicans won't get us there.

Anonymous said...

That's not the point.

What is the point? What. I love the lenders -- plus the Mortgage Bankers Association.

Their stock is at three and one.

They're gonna grow up.

What. Angelo researched this!

This listing is special Hank, you guys can do this!

OK.

Are you kidding? This is awesome!

Did you see the size of that Escalade?

That's great! Now let me get to work.

Anonymous said...

It is an incredibly stupid move to bail out these subprime folks. As horrible an experience it is to foreclose, it may be such a relief to a family that is cash strapped and house poor and does not manage money well. Who is to say with bailout or not, they end up foreclosing anyway? The cost of the service of daily living, besides housing, is going up, gas and food and medical expenses, so even if someone keeps a current teaser rate, it is becoming more difficult to make ends meets on a middle range income. Not to mention the inevitable and nauseating incompetence of this crowd. They need to save this money and let the
house go under and think of better ways to use it for the good of all.
-yes, I am a democrat at heart.

Zip said...

I am loosing my home and being foreclosed on, not because I was a scammer, or a liar, or because I bought too much McMansion.

I have an ARM thats already reset, in fact it did a year ago, thats not what did me in.

What did was job loss of one of the two earners in our home and injuries and medical bills from a car accident caused by an uninsured driver to the other. In fact, $30,000 in medical bills which neither the health insurance or car insurance companies feel is their responsibility to pay even though I have paid them both, for years. They point at each other and stick me with the bills.

Even with that we managed to hold on for a year and a half after our reset with our savings and emergency fund.

My households picture has started to change and things are looking up, too late to save the house however. We tried, servicer is ambivalent, doesn't care about my situation, they just want to get paid.

Do I wish I could qualify for this bail out..... HELL NO!!!!

Bush & Paulson are fools, no, worse, puppets!!! Business grinds the organ and they dance.

This is a shell game. The only ones this bails out are the investors and banks by paying them off in full and shifting the burden and the loss to the tax payer. That is only way this bailout will work.

By the time the bureaucracy can get the program up and running it will be too late, help too few, and at too high of a cost.

I can easily see this turning into a multi Billion dollar boondoggle that will help less than 500,000 people and have no effect on helping the economy.

It is nothing more than a shell game the politicians use to help their cronies and get press.

They should do nothing. As I have learned... Life can be hard and it'll kick your arse. Suck it up, take it the shorts, pick yourself up and dust your self off and move on. Start again.

Thats what the economy needs to do.

Everyone needs to learn the lesson and when they bemoan the loss of their McMansion, SUV, and Crate and Barrel shopping sprees, remember the adages "What goes up.." and "Too much of a good thing......".

Did they really think it could go on forever?

I almost feel discriminated against because no one was here to bail me out because life didn't go according to plan but, If I only had been stupid or greedy instead then Uncle Sam would have my back.

Anonymous said...

Umm, if we want to move things in a better direction, we need to REDUCE government handouts, not INCREASE them.

ooooh the HPers are angry. What's the matter boyz?

What's the matter is we're the only people left who give a s*it about the future of this country.

Let me guess, you're one of those moocher looters who bought a toxic loan and now you're thrilled that you get to keep it under this plan instead of going to bankruptcy court where you belong.

December 05, 2007 10:17 PM

================================
Change your handle to "Franksucs" because you are one of the biggest idiots I've seen in a long while.

You all are worried about entitlement programs for the poor(who by the way are often people who are much smarter and gifted then their middle class counterparts.Pampered little pukes who received a bicycle on their 12th birthday just for wiping their own arse )and yet have no problems with a financial/economic system that was intentionally set up to destroy this country. In fact you often "root" for the bad guys and their policies. Such stupidity.

Anonymous said...

Anonymous said...
It is an incredibly stupid move to bail out these subprime folks. As horrible an experience it is to foreclose, it may be such a relief to a family that is cash strapped and house poor and does not manage money well.

You guys are idiots! The "subprime" folks as you call them are BankofAmerica, Citigroup, HSBC and on and on. Paulson doesnt give a rats ass about poor homeowners, he is being instructued to save the bankrupt financial system.

Government hand outs my ass. The entire financial system has been nothing but a parasitical meanace for these last 30 years. How many of you clowns cheer the "markets" when it goes through the stratosphere? You dont understand a thing about what is really taking place right before your eyes.
Fantasies of retirement (in another thread), plans to buy up big homes after the market correction is all just a baby boomer wet dream. The current financial system is finished, kaput. And what you might get out of this crisis if you remain in a state of fantasy, is war, starvation, and genocide right here inside the United States. Our nation is on the verge of total collapse.

Anyone want to tackle that subject?

kennybb said...

A lot of unanswered questions.

The basics of it DO MAKE SENSE..

Something like this...

Say you're the bank. You have the mortgage...it's going to reset from 5% to 10%. At 10% it's a default, you get the house, the expense and will sell it for 70 cents on the dollar.

At 5% interest, the house doesn't default. The people squeak by.

So which would you rather have? 5% interest on 100% of the money or a default and you get 70 cents on the dollar?

It makes rational sense for the bank to negotiate a lower payment in leau of default.

Why the gov't needs to get involved, I don't know. AS long as I don't have to pay for it, I don't really care.

The mechanics of it are tough though...what teaser rate was there? 2%? 5%? If the bank only gets 2% interest for 5 years, they may be better off taking it a foreclosure.

Lovingthatbush said...

Anonymous said...
I need to get bad credit so I can get lower rates than people with good credit. The world is being turned upside down by the morons in government.
December 05, 2007 8:26 PM
------------------------------------
Thats because the morons running the government are libertarians & Republicans.

ImpeachBushCheney said...

3) Home prices are dropping. By freezing certain individuals in their current homes, which are a depreciating asset, you are essentially merely delaying the inevitable. Assume a "frozen" loan owner keeps up with payments now for five years. 5 years down the road, he is now back to where he started with increased interest on his toxic loan. But now, he is holding a vastly devalued property. All that the government did to this poor sap was have him bail water out of the Titanic while everyone else got on life rafts.
---------------------------------
Well put. I have thought all along that the people being bailed out where the big banks.

Anonymous said...

zip said:

I am loosing my home and being foreclosed on

-------------------------------
People, for the last time, it is losing not loosing, comprehend? Good.

Anonymous said...

.

My brother, 48 (an educated pro type) moved to so.cal., bought a much to large house, 2 high end cars, started hanging with the Armani and Rolex crowd. Then decided he needed a boat (which sat in the marina at Dana point, used for evening and weekend cocktail parties.
Over extended himself to the point of ridiculous!

Paying off credit cards with credit cards....I didn't think you could do that?

He was broke within 18/20 mos!

Moved home with mom & dad (71 & 75 respectively)in Arizona!

He will not accept ANY job unless it has some sort of prestige.

I'm doing this because I'm pissed!

He keeps trying to borrow from the folks to support his wild B.S. lifestyle.

Then we find out, his so-called friends won't even talk to him,

1)because he's broke

2) because I think he tried to schmooze them!

3) They are just as F**KED up as He

What a piece o' work!

I'm not going home for Christmas if he's there.... I don't think I could afford it!


.

Jeff in Florida said...

This scheme is not going to stop the tsumai of foreclosures. The root of the problem is not the teaser rates resetting, it is the lack lending standards practiced over the past few years.
Let's face it, the "american dream" was not meant for everyone. As recent as 1998, when I purchased my first home, I had to prove I was worthy to own a home. I had to show the bank I had the ability to repay the loan. I had to EARN homeownership by saving for the down payment, escrow, and closing cost.
There are people out there who have no business owning homes. They are not financially responsible enough to pay for it and since they did not have to earn it, they take no pride in the maintenance of it. Take a look at some of the houses in newer subdivisions that these new members of the "homeownership society" purchased in. Absolute squaller..unkempt lawns, ghetto cruisers in the driveway, etc.
I've been tracking the foreclosures in my subdivision. Of the ten, three were fliptards and the other seven foreclosed BEFORE the teaser rate reset. All were 100% financing (mostly Countrywide-KB)
These people could not even afford the teaser rate for long. They had no business purchasing a home in the first place. They should have stayed at the apartment complex or trailer park they came from.
The way I look at it, they should just let things run it's course and let the tsumai douche out America's middle class neighborhoods so people who deserve the homes can purchase them at a reasonable price.

Anonymous said...

Why the gov't needs to get involved, I don't know. AS long as I don't have to pay for it, I don't really care.

-----------

But you are going to pay for it dumbass. The differcne between 5% and 10% will be covered by the govt through new bonds, through fannie/freddie buying up the junk.

Lemme guess you also think social security is a good idea.

Please go and die.

silly in Philly said...

"The basics of it DO MAKE SENSE.."

Yeah, for the banks. The big boyz are literally facing doomsday:

http://tinyurl.com/2jhl8z

They got a glimpse of their future when E*Trade sold its crap paper last week for 17 to 27 cents of face value. Paulson and Bernanke now know the truth when the banks finally fessed up to the amounts they need to squeeze through this mess.

The sub-prime bailout is just a way for the banks to sell some of their crap, the worst stuff that might get 10 cents on the dollar, to Uncle Sam at 100% face value. They will still take a hit, but it won't be fatal.

This of course also opens the door to future bailouts as the need may arise:

Auto loans - workers have to get to their jobs,
Credit cards - kids have to eat,
Medical bills - they're too poor to get sick,

etc., f_cking etc. It's a sad day for America.

Bill in AZ said...

2 comments on other posts:

On the post by "zip"
...it is so refreshing to finally hear from someone with integrity. Dude, you're one in a million. Seriously.

And on this post by "anonymous"
zip said:

I am loosing my home and being foreclosed on
-------------------------------
People, for the last time, it is losing not loosing, comprehend? Good.


Hey, man - trust me when I say that it annoys me to no end that there are so many illiterate motherfuckers out there. However, it also annoys me that even most of those who think they are smart because they catch this misspelling, are in fact too stupid to phrase their correction properly. Here is what you should have said:

People, for the last time, it is "losing" not "loosing". Comprehend? Good.

(Your "correction" omitted proper quotation marks, and included a clear run-on sentence.)

shtove said...

I wonder ... will the Bushies hang Paulson out to dry sometime next year? The rope is there, woven during his GS days when he oversaw securitisations.

The press might prefer Mozillo, but he hasn't opened himself up to attack by entering politics - and no doubt would send an army of lawyers against anyone who seriously threatened his reputation.

Poor Paulson could be become America's number one hate figure - and that's saying something.