February 08, 2008

Senator Dodd proposes Government Housing Gambler Mortgage Bailout Corporation. RTC2 for Housing Gamblers?


And then, right on time, the monkeys in government proposed a new government entity that would get the US taxpayer into the mortgage business, all in the hopes of propping up plummeting housing prices and bailing out mortgage-fraud-committing housing gamblers.

Gee, I thought America was a free market economy who believed in the sanctity of contracts. My bad. I forgot, the Democrats are in charge now. And the investment banks want to see a return on their DC investment.

In the end, all of this crap - Dodd's RTC2 plan, Clinton's 5-year interest-rate-freeze stupidity, and the goings-on with Fannie, Freddie and FHA, just show how important housing prices are to America and our fake Ponzi Scheme economy.

When home prices were shooting to the moon and detached from price-to-rent and price-to-income metrics, nobody in government said boo. But prices start coming down to rational levels, and EVERYONE FREAKS THE F*CK OUT.


Memo to the monkeys in DC - LET THE FU*KING MARKET CORRECT. When home prices are at levels that people can't afford, people don't buy homes. Get it? And housing gamblers who committed mortgage fraud and bought homes they couldn't afford SHOULDN'T BE IN THOSE F*CKING HOMES.

I swear, housing is the new Terri Schiavo. The boobs in DC just don't get it.

Dodd Wants Government Housing Corporation

WASHINGTON, D.C. - U.S. Senator Chris Dodd in a letter to Senate Majority Leader Harry Reid called for the creation of a government housing corporation to ease the housing crisis, which he likened to that of the Great Depression.

The corporation would “purchase outstanding mortgages at the steep discounts at which they are currently valued in the marketplace, ensuring that lenders and investors take a haircut and are not being bailed out.

The discounts would then be passed on to homeowners
in the form of new, lower-balanced mortgages insured by FHA or backed by the housing government sponsored enterprises (GSEs), Thus, the program would take advantage of the existing mortgage distribution system.

Dodd proposes $10 billion to $20 billion for initial capitalization of this corporation.


35 comments:

common sense said...

Dodd can shove my share of his $20 billion "seed money" up his ass. I'm not giving him a red cent to prop up deadbeats' housing values. Screw him and screw them. Let the house(s) crumble to the ground.

Every renter and saver and person with a paid-off mortgate should bury CONgress in letters and emails on this issue, just like the boneheaded immigration amnesty bill that got pummeled last year.

And while we're at it, shouldn't the SEC be investigating why Moody's, S&P and Fitch aren't downgrading the monoline insurers yet? You don't think there's some serious collusion going on there? Downgrade those MFers already.

Anonymous said...

Doesn't seem so bad. Although I suppose "existing values" is open to abuse from appraisers (once again). It might be a good way to stem the destruction caused to property and neighbourhoods, by all those foreclosures, "trash outs", and vacant houses. If the housing/credit crisis really is the worst financial crisis in 60 years, then why not try to smooth it out a bit, take the edge off it.

I know you hate government intervention Keith, and sometimes all it does is make things worse, but at least they're trying to do something.

mako said...

die pigmen, die. eat your debt and just cease to exist.

Bob Reno said...

Okay, so how would this scenario work? Mortgage is currently $500K, and they holder sells it to the gov for the "current value" which might be $300K, they give new mortgage to homedebtor. A year later the houses in the neighborhood are worth $200K. Does the homedebter get to refinance all the way down as the prices drop? If not, what is to keep them from walking out on the gov, which will then own a house that is worth less than their mortgage and they will likely have to sell it again for less anyway.
Also, is this just for primary residence or can flippers get involved, too? If not, that still leaves a crapload of other homes on the market that will still go into foreclosure. This kind of thing was tried in the Depression, but we didn't have the inflated prices, mortgage fraud and fliptards we have now.

Anonymous said...

F*ck the government! These clowns need a good pitchfork shoved up their asses. This has become beyond ridiculous with the Fed believing it is all powerful and can manage the perfect utopia. Their plan to create the perfect housing utopia got us into this mess in the first place!!

F*ck off Fed!!!!

redondo_beach_dude said...

The hegemony is over, period. U.S. greenbacks will be inflated until worthless within 5 years, just as Buffett has predicted. No austrian economics here, nosiree. Inflate and devalue the debt. Get ready for stagflation, oh and $7 gas, milk, water, etc., etc.

Anonymous said...

I heard that the "steep discount" will be 10% off. That means the bankers will be taking a 10% loss on foreclosures instead of 40%. The future generations of taxpayers will be picking up the tab as usual. Privatize the profits and socialize the losses. Nobody should be surprised. Dodd receives the most money from hedge funds and Wall Street bankers out of all the Senators.

Anonymous said...

Surely buying "cheap" houses and renting them out is a job better suited for private businesses. Perhaps Senator Dodd would like to do it with his own money?

The only reason to involve the government is to pay prices that no private investor would be willing to pay. Don't let them do it!

Anonymous said...

Let the mortgages go on the open market for say 6 months. Then price to that. We don't need another mark to market from a corrupt organization.

Happy Homedebtor said...

The banks have marked down the value of the subprimes/etc to $0.40 on the dollar on average. So essentially, that would cover beyond the apocalypse in losses for the gov't. Ultimately, if they buy it at that price and then resell it to the homeowners for the current market value (10-40% off depending on where you are), then they're still covered for another 20-50% loss from original price. In essence, they'd make a profit long-term and it'd help with the national debt honestly. :)

So as bitter as you all are, this would A) help the homeowners, B) help the government, C) depress prices a bit further probably making you all able to buy your houses nice and cheap.

So forgive for wondering - why the hell are you complaining, unless you're a miserable person that just wants to see others miserable? It'd be a win-win-win for *everybody* - but can't have that right? :)

Sittin' Pretty said...

You know there are times I'm happy to have congressional stagnation. This is what the 50th bailout proposal that hasn't happened yet? Nice to see the GSEs will have to live with $417K for awhile longer (go Senate!), I smell fear in Cali...

a Chicagoan said...

Keith, The Senator from Chicago (not Illinois) Obama will do far worse. Just you wait.

Get off the doom train said...

"Okay, so how would this scenario work? Mortgage is currently $500K, and they holder sells it to the gov for the "current value" which might be $300K, they give new mortgage to homedebtor. A year later the houses in the neighborhood are worth $200K. Does the homedebter get to refinance all the way down as the prices drop? If not, what is to keep them from walking out on the gov, which will then own a house that is worth less than their mortgage and they will likely have to sell it again for less anyway.
Also, is this just for primary residence or can flippers get involved, too? If not, that still leaves a crapload of other homes on the market that will still go into foreclosure. This kind of thing was tried in the Depression, but we didn't have the inflated prices, mortgage fraud and fliptards we have now."

As always you guys don't look at the forest through the trees. I don't understand why this is such a bad thing. For people who have a paid for house, it lately has been like having a paid for car - no payment, but a depreciating asset. This will at least STABILIZE the market. Market price is up to the market, however currently the MARKET is disjointed and operating on fear, just as the market operated on greed before. And, as far as the mortgages being purchased at the low values in the market place right now, what is wrong with buying low? Would you rather the government buy them when they were high? If this is done correctly, then the government might actually do what the hedge funds have been doing - make money when everyone realizes that this is all WAY OVERDONE. Did you know that the majority of the defaults in some of the higher quality tranches of CDO's was NOT due to payor defaults, it was due to DOWNGRADES! This is a self fulfilling prophecy, and all you doom and gloomers are just standing in the way of a solution! If you are not part of the solution, you are part of the problem! I know that most of this blog is renters and market bears so you have a VESTED INTEREST in apocolypse, but the reality is that the housing gamblers, stock gamblers etc. are GONE. They have long since been blown out of both markets. The people this is hurting now are just average Americans losing their jobs and homes. Give it a REST!!!!!

Anonymous said...

Can they do the same for my 401k and IRA? We can have the government buy our stocks at inflated prices so that no investor ever loses more than 10%

How about it Senator Dudd?

Anonymous said...

Let Sen Dodd know what you think

I did!

Anonymous said...

Fine, on one condition: If you walkaway, trash-out, etc. you go to debtor's prison.

Fail to pay your income taxes and there's a good chance you'll wind up in prison. Why should failing to pay a government-backed loan be any different?

I know, I know. Wishing for THIS government to enforce responsibility (particularly in an election year)... what the hell am I thinking?

Anonymous said...

To get-off-the-doom train:

If you think this is a good idea why don't *you* (and Senator Dodd) spend *your* money investing in rental properties?

Not interested? Can you then please explain what gives you the moral right to take *my* money through the tax collector and spend it likewise?

Anonymous said...

Seems like DOPES is getting scared.

LOL

Let the banks fail. The recession is needed to weed out the corrupt and incompetent.

Now tell me again, DOPES, why should the taxpayers have to catch the falling knife? You want government intervention on the way down, but not on the way up? How convenient for the bankers and speculators.

Anonymous said...

how will the government pay for this and entitlements? more dollar destruction? is inflation sometimes a good thing since it affects the senior citizens on fixed or "core inflation" adjusted entitlements who vote for santa claus?

truth teller said...

"you are part of the problem! I know that most of this blog is renters and market bears so you have a VESTED INTEREST in apocolypse, but the reality is that the housing gamblers, stock gamblers etc. are GONE. They have long since been blown out of both markets. The people this is hurting now are just average Americans losing their jobs and homes."
-----------------------------------
How can telling the truth be "part of the problem"? If you think the "stock gamblers" are gone, then you are living under a tree. If you think "housing gamblers" are gone, then you REALLY are spazzed out. They're falling like flies, because a big bunch of the sub-primes have still NOT reset to the higher rates. We are sorry to break the bad news to you, but more shit is about to hit the fan, and more gamblers will be out on their asses. HOpe I didn't cause you any undue stress. Now, i'll "give it a rest".

Anonymous said...

If the government buys homes at what they're "currently valued in the marketplace," the market would buy at that price, and no need for the taxpayer bailout. This means the taxpayers would buy at prices higher than the market would pay to clear the inventory.

The government shouldn't use the term "market" in this bailout plan. This is the government rewriting contracts, and using taxpayer dollars to buy at inflated prices the market would not pay. This bailout is a destruction of markets, and a distortion of values. Why should people invest here when people get rewarded if the gambling mistakes are big enough?

Ruprecht said...

This is reason to get politically active. Write your Senator and congressman NOW!!

Anonymous said...

The government will buy houses and do what with them? Rent them out? Sell them? Bulldoze them? Watch as more money goes into that black hole known as Washington District of Criminals.

Anonymous said...

Chris Dodd is the top recipient of Wall Street contributions. He is from Connecticut, where all the hedge fund managers and Wall Street execs live when they're not screwing their mistresses in their Manhattan apartments. The lackey has been pushing for a Wall Street bailout since Day1, along with UpChuck Schumer.

Taxpayers should buy these toxic loans from the bankers so they can make more bad loans that we can buy?

Anonymous said...

The point is that the government should not be in the business of buying or saving bad loans at the taxpayers expense .

If the government wants to establish a welfare program ,than certainly a welfare program should not reward liar loan borrowers and speculators or the lenders/insurance companies that enabled them .

Because so many people are homeowners ,there seem to be little objection by the majority on these bail out plans .Also, there is a PR effort to paint the borrower as a victim or party in need of welfare .It's a bail-out for the banks and all the Wall Street firms involved with the easy money lending .

I can think of a million better ways for the government to spend tax-payers money that would stimulate job creation .

Get off the doom train said...

"How can telling the truth be "part of the problem"? If you think the "stock gamblers" are gone, then you are living under a tree. If you think "housing gamblers" are gone, then you REALLY are spazzed out. They're falling like flies, because a big bunch of the sub-primes have still NOT reset to the higher rates. We are sorry to break the bad news to you, but more shit is about to hit the fan, and more gamblers will be out on their asses. HOpe I didn't cause you any undue stress. Now, i'll "give it a rest"."

Just for the record Mr. Know it all, you are not "telling the truth". The TRUTH is that NOONE knows where the bottom is or is not. Just like during the boom, lots of people said that the top was in 2003 - 2004 etc. ONLY AFTER everything settles do the Monday morning qb's come out and say "I told you so". The bottom will be reached when someone FIXES the PROBLEM, be it the "Market" or the Government, my guess, a bit of both. However, people like you make it very difficult for cooler heads to actually fix the problem, because EVERYTHING other than APOCOLYPSE is not the fix to you. I just don't understand why you feel that the market MUST return to zero, and unemployment must go to 10% in order for things to be to your liking. Why do you think that a governmental buyout of the bad mortgages when the banks are giving them away is bad. If the loans are then restructured, yes you may bail out a few bad apples, but the majority of folks will pay the mortgages to keep their homes. Then, when all the idiots like yourself are finally shut up and quit driving everything in to oblivion, the government may actually be able to sell that paper at a PROFIT. Then you would make your precious "Tax payor money" back with interest. I would love to know if you actually "own" anything or are you one of those people that sit on rented furniture, in a rented apartment, and driving a leased car. You "doomers" have been screaming that the world is going to end for years, now all of a sudden, you are having your 15 minutes and screaming "see we were right" and you are shoving it down everyone's throat. Some people even went after Keith for merely suggesting that stocks were getting cheap. I agree with Keith on most points, and yes housing was wayyyy overpriced, but it is getting to the point where innocent people are getting caught in the battle between you "doomers" and those that want to fix things. I just don't see how proving your point at the expense of families in this country is right just so you can protect your "tax payor money". I certainly would rather pay for that, than some study on birds, or a bridge to nowhere, or more welfare programs....I OWN things, and I pay a lot of taxes, so to answer the other posters question YES I AM paying for this, and gladly so. At least this is fixing something, and it may actually be profitable on the long run if structured properly. If you don't like that, then move. Maybe you can move to a country with 20% unemployment, a banking system that is pure eliteist, and YOU won't have to pay ANY taxes.

Princess Mononoke said...

The problem is that the 'PTB' are soooooo disconnected with OUR reality. They LIVE in their reality!

The GAP between them and us is sooooo wide there will never be a meeting of the minds that include US.... They will always be looking out for their best interest and not ours! That is the cold hard truth or at least the way I see it.

We will always be the little people! That is so wrong on so many levels it makes me so mad!!!

[venting off]

doom trainee said...

Bring on the hyperinflation!

Silver @ $75/oz in 3 mos!!

shovel Man said...

Greetings to all of you Federal Reserve slaves. I have been observing your banter and bickering for some time now.

I noticed that many of you continue to fight amongst yourselves, and many of you have taken on an elitist attitude, and have expressed anger towards those poor fools who are suffering and in over their heads in pursuit of keeping up with the Joneses. And I have seen terms thrown around like "debtors prison" and "camps." I am sorry to inform you that over 95% of you WILL end up in camps, and in "prisons" where you will be catalogued, processed, and finally exterminated and burnt like cordwood, all initiated by Cali governor ARNIE.

truth teller said...

"Just for the record Mr. Know it all, you are not "telling the truth". The TRUTH is that NOONE knows where the bottom is or is not."
-----------------------------------

That's MISS "Know it all". If you would read my first post, then you would see that I was telling (or trying to tell) you that a whole lot of shit is still getting ready to hit the fan, because of the current financial troubles in the economy. Did I say ANYWHERE in my post where the bottom is or is not? No, I did not. Next time, a simple read of my post would be appreciated before you ATTEMPT to comment on it.



-----------------------------------
"I would love to know if you actually "own" anything or are you one of those people that sit on rented furniture, in a rented apartment, and driving a leased car."
-----------------------------------

For some reason, I am detecting a little sarcasm in your posts. LOL As far as whether I own anything, well, that is none of your business. Your opinion of my financial worth is worthless to me.

Plus, I must say that I found it real funny that you didn't bother to revisit your ignorant comments regarding the "stock gamblers" and "housing gamblers" being "GONE". I was glad to help you correct your ignorance of the subject.

Also, before you call someone else an "idiot", you might want to check simple things, like your spelling ("APOCOLYPSE"?). I really don't like to point out other people's faults/shortcomings, because I have MY own, but YOU brought it up with your "idiot" comment. And, in the future, I will be glad to help you on your spelling if I can. Plus, if you need any additonal financial guidance, regarding those "stock gamblers" or "house gamblers" being "GONE", just let me know. Isn't it nice to be corrected by an "idoit"?

Get off the STUPID doom train said...

"Also, before you call someone else an "idiot", you might want to check simple things, like your spelling ("APOCOLYPSE"?). I really don't like to point out other people's faults/shortcomings, because I have MY own, but YOU brought it up with your "idiot" comment. And, in the future, I will be glad to help you on your spelling if I can. Plus, if you need any additonal financial guidance, regarding those "stock gamblers" or "house gamblers" being "GONE", just let me know. Isn't it nice to be corrected by an "idoit"?"

People losing their homes and 401K's and you are concerned with my spelling, and my understanding of your gender. I suppose that you think people with 401K's are "market gamblers" and deserve to have their life savings wiped out so you don't have to pay taxes too right? Hmmmm, I have an idea MISS know it all, WHY DON'T YOU COME UP WITH A SOLUTION TO THE PROBLEM instead of being worried about anyone's spelling and that I acknowledge your womanhood. As I said before, if you are not part of the solution, you are part of the problem. QUIT BEING PART OF THE PROBLEM. "I really don't like to point out other people's faults/shortcomings, because I have MY own" Really? Is that not what you have been doing on this blog for several threads? You point out Senator Dodd's shortcomings, housing gamblers shortcomings, the economy's shortcomings, the fed's shortcomings, my short comings, etc. That is all you seem to do. Again - part of the problem.....If you are so good at what you do that you can judge others - fix the problem! Don't just complain because there is not enough doom and gloom. I would love to see someone come up with something better than Senator Dodd's fix, instead of just complaining about it. Go back to your doom and gloom cave and let some people with perspective and not bias take over. I wonder what your perspective on this would be if you lost your job tomorrow because "the economy has slowed" and you did not participate in the housing bubble, or the stock bubble etc, and all you did was buy a home to raise a family and invest for retirement. Maybe a fix would not look so bad. But I suppose you are smarter than the market right? You timed it all perfect, and now you can sit in the ivory tower and judge all homeowners as "gamblers". Good for you, maybe you should take some of your "smarts" and HELP PEOPLE that are not as smart as you. Princess...

truth teller said...

""I really don't like to point out other people's faults/shortcomings, because I have MY own"" "Really? Is that not what you have been doing on this blog for several threads? You point out Senator Dodd's shortcomings, housing gamblers shortcomings, the economy's shortcomings, the fed's shortcomings, my short comings, etc. That is all you seem to do.""


Wow, you seem to never learn. I said that I don't like to point out other people's shortcomings, but that doesn't mean that I WON'T if I believe they're wrong. Again, a SIMPLE read of my post would be appreciated. Please do this or I will have to correct you again. LOL
-----------------------------------
"Good for you, maybe you should take some of your "smarts" and HELP PEOPLE that are not as smart as you. Princess..."

Well, thank you for giving me my due for something. I also appreciate being called a "Princess". Please make sure that you acknowledge me as such in future postings. Thank you for such a NICE compliment. But, I thought that you said that I was a stupid renter who's just leasing furniture, etc. LOL
-----------------------------------

"MISS know it all, WHY DON'T YOU COME UP WITH A SOLUTION TO THE PROBLEM instead of being worried about anyone's spelling and that I acknowledge your womanhood."


You didn't seem to like that part of me correcting your spelling. I can tell that you are somewhat irritated with getting corrected. LOL Don't worry, because I will miss a word or two, and YOU can correct me. Won't that be fun? As far me having a "Solution to the Problem" What problem are you talking about, because I was a solution to your incorrect spelling and your TOTAL ignorance of how the stock market and housing market works. That was a solution to a MAJOR problem, right there. Don't you see? I helped you with your spelling, and I corrected you on the stock market and "housing gamblers" problem that you had. But now, that is fixed, so I have helped you out. That way, you can spread your newly-acquired knowledge to others for the betterment of mankind. How much more help would a person expect? BTW, you're welcome.

Also, how much more "help" are you going to require, because I may have to start putting you on a time clock. What is the going rate for getting advice from a "Princess"? No matter, because I have just decided to continue to help you with any problem that you may have for NO CHARGE. That is just the kind of person that I am.
-----------------------------------
"and now you can sit in the ivory tower and judge all homeowners as "gamblers".

Wow, you are going to require a LOT of my assistance. Anytime a person buys a home, they're gambling. They're gambling, because NOONE can predict the future. Unless, of course, you have that talent.LOL Here is one definition for "gamble" from an online dictionary website: "To take a risk in the hope of gaining an advantage or a benefit." ANYONE who buys a home takes the "gamble" or "risk" that they can make the payment, with the "HOPE" (not a guarantee) that they can sell the house for more money at a later date. Of course, if they have no loan, then they're still gamblers, because they bought the house, and are still hanging on to the "hope" (not a guarantee) that the home will increase in value. Read a promissory note sometimes. Maybe, that will enlighten you a little more on your ignorance of this subject. Now, I went and HELPED/CORRECTED you AGAIN. THIS IS FUN!!!! I was glad to be of "HELP" to you!!!
You're welcome.......AGAIN!!!
- "Princess" Truth

Get off the doom train (and get a life) said...

Hey Princess, seriously consider getting a life. If you don't see the real problem at hand, you must be living in a hole. And as far as knowing how the market (stock) and housing marktet works - I can assure you I have made more money (and lost on occasion) in both those markets than you have made at your "non-gambling" life. The reality is that people like you are right 50% of the time, sing loud about it, and then fall back to your day jobs when things are fixed. I just ask that you don't stand in the way of real solutions to real problems. Go crawl back to the cave, and correct your own spelling. BTW, I don't pay for a teacher to correct my grammar, I pay Goldman Sachs to make me money....

"Princess" who helps, and is a truth teller. said...

Oh, I noticed that you just added "get a life" to your login.

I like that. It's a catchy addition. And, I have a nice life already, and I am quite comfortable. However, I want to thank you so much for your compassion!! Now, I know that you have really appreciated my help.
-----------------------------------

"And as far as knowing how the market (stock) and housing marktet works - I can assure you I have made more money (and lost on occasion) in both those markets than you have made at your "non-gambling" life."

Well, here we go again.
There is a recurring problem with your posts. Whenever, I correct you on things, you get irritated, and tell me to get a life or crawl back in my cave or something else. You have been wrong on your "housing gamblers" your "stock gamblers" comments, but you never seem to admitthat you are wrong. You just get more irritated. In my last post, I had to correct you on a couple of things more. Please don't feel shamed. Your ignorance of the subjects are the reason that I want to help you. I am only trying to help you. You told me to find solutions for the problem, and I have been doing that by correcting you on many different things. Hopefully, you will now go forth in life, and use this CORRECT knowledge that I have bestowed upon you. And I guarantee that this will be for the betterment of mankind (and womankind). You're welcome - AGAIN (third time).
-----------------------------------

"BTW, I don't pay for a teacher to correct my grammar, I pay Goldman Sachs to make me money...."

LOL, Could you please read this statement that I just quoted from you? You start out talking about grammar, and then you start talking about Goldman Sachs in the same sentence. "BTW", those should have been two different sentences. I am only doing this to "help" you. I am truly molding you into a better person. And, I don't even ask for a "thank you" from you. But, I know that you appreciate it, and that's all that matters to me this day.
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"The reality is that people like you are right 50% of the time",

Did you say 50%? Things are REALLY LOOKING UP for me, now. You went from calling me an idiot in your earlier posts, to saying that I am now right 50% of the time. YIPPEEE!
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"I just ask that you don't stand in the way of real solutions to real problems."

That is a VERY valid request. And, I will definitely grant you this request. I promise to help you in any way that I can. In the future, I will continue to assist you as I have helped you in our prior discussions. I will continue to help in a positive spirit. Let's keep this going. You are learning a lot, and I am feeling very good about helping you.

Anonymous said...

I'm sure its of a vested reason that dodd wants to help poor homeowners,probably the pacs of
lenders and huge builders that have
contributed heavily to his political career,but these people
were put in homes that they and the
lender knew they couldn't afford
and now that the chips have fallen,
it is not mine or other taxpayers
responsibility to pay for your house,go back to renting where you
should have stayed until you can
afford a home.