March 05, 2008

Ben Bernanke wants to reward failed housing gamblers and mortgage fraudsters who can't afford their payments by cutting the PRINCIPAL amount they owe


So let's say you commit mortgage fraud and take out a Liar's Loan for $500,000 even though you can't afford the monthly payments. Your new best buddy Helicopter Bernanke wants the banks to cut the loan amount to $400,000, but only for loans where the failed flipper stopped making payments.

And for those of you who 'bought' homes you could afford, who didn't lie on your mortgage application, and who kept making timely payments, Bernanke says "f*ck you byatch - no bailout for you!"

Crime and irresponsibility pay in America today. Doing the right, ethical and honest thing is penalized. And I think this desperate and pathetic brain-fart by Bernanke shows just how fast things are now spinning out of control.


Bernanke urges banks to forgive portions of mortgages

Saying banks must do more to stem rising foreclosures, Federal Reserve Chairman Ben S. Bernanke called on lenders Tuesday to go beyond trimming interest rates on some troubled mortgages by cutting the size of the loans as well.

Bernanke's call for outright mortgage cuts is more sweeping than anything he has previously advocated and appears to put him at odds with the Bush administration. Treasury Secretary Henry M. Paulson Jr. contends that homeowners are obligated to keep paying on their home loans.

90 comments:

eric in vegas said...

Not gonna happen. The banks would have to reduce mortgages by at least 50% to have an effect. No way in hell are they going to take losses like that.

Anonymous said...

I think the banks should do that, but keep a lien with interest accruing on the "forgiven" part so that the FB can never profit from selling the home. The banks have no choice. They can't foreclose on 10 million people over the next 3 years. Either get smaller payments or get nothing at all but an empty shell of a house that nobody will buy. Now you're down to flippers and the tens of thousands of REIC members who lost their jobs.

Anonymous said...

This is one fucked up country. Sorry, world.

Anonymous said...

Wow! It's really hitting the fan now!

Can you imagine all the pissed off homeowners who somehow tried to do the morally right thing and payback what they borrowed?

I suspect this will be the start of another civil war in the US. Those who got screwed and bailed out vs. those who didn't and were honest. All while the super rich look down and chuckle.

At least when you're super rich you can afford bodyguards. But how can you guarantee that your "protector" won't decide that it's easier to just get rid of you and take your place?

The rich should start getting a little nervous in about 6-12 months.

Ed said...

Keith you cannot be so naive as to think that the government will sit back and do nothing in an ELECTION YEAR. As I have said before, 70% of people own, 30% rent. Who do you think a politician will focus on during an ELECTION YEAR? Not rocket science to figure this out.

Hillary and the MESSIAH OBAMA are tripping over themselves with bigger and better bailout plans. Bush wants in on the action too. All 3 gets most of their money from Wall St. Look at their donor lists, identical names. Goldman Sachs, Merrill, Lehman.

Of course as we all know these schemes never work. The unintended consequences are always worse than the problem they are "solving". I wouldn't get my panties in too tight of a bunch over this.

Anonymous said...

I'm responsible and make all my payments on time. I think I'll now fall behind on my payments, put the money in the bank, have them knock 100k off. Then I will take those 6 months of payments and immediately put it towards the 200k that I owe. BOO YAAAA! This is the greatest idea ever. I hope everyone does this.

Stick it to the banks.

Anonymous said...

AS long as the all the commission based parties(the usual group of whores and banks) to the original sale return the appropriate percentage of their commission to the taxpayers. In fact why not just have the seller just return that money to the lenders? I'm sure they won't mind.

Anonymous said...

What's the big deal? If you sign a contract to pay X amount, why complain if you still have to pay X amount if you can afford it?

Peeps need to care about your own, meaning you. Who cares about someone else getting a free ride from a bank? Yall like to bitch.

Keyser Soze said...

I've had to deal with 'cram-downs' in the past. I must admit, in the current environment of LTV's > 100%, it might mitigate the lender's losses. The magnitude of the costs involved with a full-blown foreclosure is mind-boggling. Those institutions holding 2nd's are so f*cked, they might as well man up, and skip the KY. I remember that I would purposely run up foreclosure costs if I had a 1st and a competitor had a 2nd. I was, and am, evil.

theloknesmonster said...

For the first time, I'm starting to believe the "blood in the streets" predictions of all the survivalists out there.

It's decisions like this that start revolutions.

How could any sane and rational person in a position as important as Fed Chairman even propose a solution so ludicrous? (I know the obvious response here so don't bother)

And how could any potential candidate not use this proposal to recruit a fence sitter?

The % of people that will be assisted by this insanity is minute, but the dollars involved are incredible, dollars that will inevitably come from the pockets of those that did not try to game the system.

It's bunker time...

Anonymous said...

The banks still have to take a hit against their capital to do the loan writedowns. They won't be pleased about that unless the regulators look the other way.

The answer to the consumer is obvious. Stop paying the mortgage unless you get a loan balance concession.

And by the way, how will they reduce the value of all of the CDOs, etc. collateralized by the lousy and worthless mortgages? The investors who bought them will have to take a hit against the value of their investments.

This plan practically ensures a liquidity and credit crunch. Who wants to lend if their loan won't generate a return and may even generate a loss?

The Fed needs to be led by someone intelligent enough to understand these simple concepts.

Anonymous said...

This is shameful. It's a larcenous reward for cheats.

It may be necessary to bail out the system but what a slap in the face to all those who played by the rules. The ethical, hardworking segments of society will pick up the tab regardless of how it looks right now. And, it will ensure that priced out FTB's, the poor and the homeless will perpetually be second class citizens.

It's a gift to people who are undeserving of any largesse. It's appalling.

Haggis

Anonymous said...

Anonymous said...

Wow! It's really hitting the fan now!

Can you imagine all the pissed off homeowners who somehow tried to do the morally right thing and payback what they borrowed?

I suspect this will be the start of another civil war in the US. Those who got screwed and bailed out vs. those who didn't and were honest. All while the super rich look down and chuckle.

America is not competent enough to have a civil war. 20 years on the couch watching HGTV & Desperate Housewives isn't very good preparation for taking up arms.

I see everyone taking to the streets for a big cry. Maybe throw in some feet stomping and back arching. One big temper tantrum and then everyone will be sent to their rooms.

tater said...

I think the banks should do that, but keep a lien with interest accruing on the "forgiven" part so that the FB can never profit from selling the home.

That sounds like an admirable attempt to fix the problem, but I don't think that it would work. In fact, I believe that it would only worsen the problem, exponentially.

First of all, it's not just the bank holding these toxic mortgages; it's investors worldwide. So I think we should change "bank" to lenders.
As you know, the lenders already have liens on these homes. Most of these homes currently have first AND second mortgages (liens), already on the books at the courthouse. Some of the homes even have third mortgages (liens) against them. Which mortgages (liens) would the lenders reduce? Would the lenders reduce the first, second and even third mortgages, just so these people can stay in their house? Most of these first, second and third mortgages are through different lenders, scattered around the world. Can you imagine the legal costs involved, getting all these lenders to agree on a principal reduction on their respective loans-just for one delinquent homeowner? Do you honestly believe that this could be accomplished. An investor in Switzerland might say "no". What would happen then? "Legal costs galore" would be the outcome.

What happens if the delinquent homeowner decides they can't make the reduced payments? Do the lenders give them another principal reduction, until the delinquent homeowner is happy? If not, do the lenders foreclose then?

What happens, if next year, the current delinquent homeowner becomes delinquent again? Do the lenders give them another "lien" to keep them from being foreclosed on? Just imagine the legal costs and loopholes that this would cause.

Plus, I would think that a lot of these homes are so "upside down" already, that the current delinquent homeowner would never make a profit anyway. Don't get me wrong; I am no bank lover, and I am not arguing with you. But, I am not into rewarding a delinquent homeowner, who cannot afford their house, by giving them a reduction on the principal of their loan(s).

"The banks have no choice." That is true. They have to foreclose. It's better to own a shell of a home than a worthless piece of paper. And, by the way, it's the law, and if that changes, then you can look for a whole lot of homeowners who are not late on their house payments, to start start becoming "delinquent" real fast. That way, they can be part of principal reduction giveaway, too. Just my looong opinion, for what it's worth

Marky Mark said...

It is a "suggestion" from the Feds.

You think the greedy pigmen of Wall Street are going to do anything not in their best interest?

They will ignore it unless they can make money off of it...

Anonymous said...

If judges are allowed to cut principles on mortgags, what is that going to do to investors who back the mortgage securities?

Who will want to invest in mortgages ever again?

In turn, how will sellers ever be able to sell a home again, since investors will see mortgage securities as too RISKY, to say the least.

Property values will then plummet like a sky diver at an air show.

Wont work!

Anonymous said...

OH MY WHAT A DEPRESSION:

NEW YORK (AP) -- Saks Inc., the operator of Saks Fifth Avenue, reported Wednesday that its fourth-quarter profit almost doubled, helped by solid sales, cost controls and one-time gains.

The New York-based department store chain said that earnings rose to $39.5 million, or 26 cents per share, during the three-month period ended Feb. 2. That compared with $21.5 million, or 14 cents per share, in the prior-year period.

MrBill said...

I have no problem with this as long as the money is coming from the bankers who helped enable the fraud. The banks are just as guilty and they deserve to suffer right along with the homedebtor.

Anonymous said...

I'm just so angry about the whole thing. How could they let this kind of stuff happen .It's just sooooooooooo unfair .

Anonymous said...

It would be ok if there was handouts for everyone, ok!!

Mark in San Diego said...

I'm asking for a reduction in my credit card bill this money. . .I bought two business tickets to Zurich, and I don't think the price was fair!. . .I will get Big Ben to reduce my debt. . .and HEY, where is my Pets.com bailout???

Angelo M. said...

Hell, it's only US dollars anybody's going to lose. What do we really have to lose by giving it a try? It's not like we could lose Euros or gold or something with real remaining intrinsic value. Failed flippers and liar-loan folks are people too. If your money isn't offshore in a nice safe undetectable account yet you're the patsy.

Happy Homedebtor said...

Banks will not do any sort of blanket reduction in principal unless it's a full blanket - because if you help the people who screwed themselves and suddenly the guy drowning next door to me is paying 10, 20, 30% less for his house and can sell it for that much without taking a bath, why would I keep paying? IE they'd reverse the #s: those flailing may keep their homes, but those that can handle it would walk away.

This will not fly unless it's a blanket, which is very, VERY, unlikely to happen.

Anonymous said...

"I suspect this will be the start of another civil war in the US. Those who got screwed and bailed out vs. those who didn't and were honest. All while the super rich look down and chuckle."

You mean "Those who got bailed out vs. those who didn't"

Those who got bailed out were only "screwed" by the banks, appraisers and realtor hacks. They in in turn screwed the rest of the honest ones.

Apt604 said...

As long as it doesn't involve taxpayer funds, I wouldn't call it a "bailout" and you shouldn't either.

Bernanke is simply saying "you all need to work this out" - not "here, let me help."

Anonymous said...

So, if they lower the loan amount, what happens to the price of the house? What happens to the comps?

Big deal, these people owe less money and are priced in for the next 30 years - it's not like anyone is going to buy their home for even the lower price - the only thing that is going to move homes is a return to fundamentals 2.5-3X wages.

And the best part is that the talking heads all say they see a turnaround in 2009 and 2010, but yet, guess what happens all over again in 2011 and 2012? Oh that's right, look at the chart.

And to top it off, I would have to imagine that the boomers will all begin selling off their second homes and such.

Anonymous said...

This is just another desperate idea that will not fly with the banks in my opinion! I can't believe it was even suggested!!!

Anonymous said...

it is amazing that something so ridiculous as this is actually coming out of the mouth of the fed chairman instead of a democratic presidential candidate.

failed flipper said...

So let's say you commit mortgage fraud and take out a Liar's Loan for $500,000 even though you can't afford the monthly payments. Your new best buddy Helicopter Bernanke wants the banks to cut the loan amount to $400,000, but only for loans where the failed flipper stopped making payments.
-----------

This is GREAT! I was trying to sell my house I bought for $500,000 for 600,000. Now that Ben will cut my end to 400, I'll be making 200 grand when it sells! weeeeeee

Anonymous said...

I predict a new trend:

HOUSE-JACKING!

Well armed thugs taking someone home by force.

Anonymous said...

If Ben succeeds in getting banks to reduce homedebtors mortgage loans, how will it be determined how much banks will shave off the mortgage balance?

Will it be based on their income? 2x income? 5x income? or somewhere in between? Another variance to think about...what about the homeowners that dont have any equity at all and what to do with the mortgages purchased with zero down?

What a mess. Ben is making this problem worse by trying to save the housing market from its own created fate.

Bens actions enforces my belief houses are WAY OVERVALUED, and we will never see these prices again like these in our lifetimes.

Welcome back to the 1980's.

grab thy ankles said...

What a f@ucking tool.So should we all stop makeing payments so we can get out loan reduced?

Anonymous said...

I like anon 10:28. Another idea is to provide blanket principal reductions, regardless of type or LTV, for all mortgages in underwater areas. Keeps anyone who actually ponied up a down payment from loosing it, and only screws those who recently paid cash for a house, which obviously doesn't include everyday working stiffs. None of these plans explain how the current, sub-prime inflated house prices, can be sustained going forward without similar new loans.

Anonymous said...

THis is just absurd. Is this how they handled the last downturn in real estate in the early 90's?

And why does everyone say people are LOSING their homes? They aren't losing a dime. It cost them nothing to get into that home they couldn't afford. So really they are just being inconvenienced by a move. Their credit will suffer but guess what? Most of these people had marginal credit to begin with. Wish someone with enough b@lls would get on TV and report it accurately.


Who do we contact in protest?

Anonymous said...

Check this out.

AP
Families Flock to Foreclosure Fairs
Tuesday March 4, 5:56 pm ET
By Evelyn Nieves, Associated Press Writer

http://biz.yahoo.com/ap/080304
/ca_foreclosure_fairs.html?.v=1

Anonymous said...

Couldn't believe it when I read it in the paper this morning. Whatever credibility the Fed had is completely gone. Now, I'm scared. Isn't this the same guy who's been telling us all along that everything is under control?

area 51 said...

I brought this up before....

-Buy for $300k...
-Refi for $500k, spend cash-out on Hummer, Porche Cayenne, bling, Harley, Vegas trips....
-Don't pay mortgage.
-Bank resets loan back to $300k.
-Bling for free......

Anonymous said...

Pitchforks and torches come to mind.

Anonymous said...

"We're in the middle of a big panic in the market,"

Frank@Scottsdale-Sucks.com said...

There will be rioting and violence if Benny gets his way. Homedebtors who bought modestly and made their payments on time are going to trash and burn the houses of the scum who took out liar's loans and didn't make their payments.

Plus, this makes no sense, if Benny is supposed to be the banker's friend then wouldn't it be better for them to foreclose and sell at auction rather than take a bath of a few hundred grand?

Anonymous said...

Who came up with the idea of the 30year morgage? Instead of paying down the primcipal like a car, it milks the payer for interest for years. We pay on the 30 year program for the house 3 times. Who came up with that idea? The bankers. Some of us would love to "own' our homes and not have a morgage, but because of inflation, interest payments and life in general this is becoming a dream of the past. We have become slaves to the debt. We cannot earn enough to pay it down. America deserves better. Houses use to cost $100,000 dollars now they are many times that. Yes, the interest went down and is the cheapest in years, but hello, the principal was forced up. It is easy to be critical when you already own your home and don't have to take on this huge debt to get one. You go Ben!

Peahippo said...

Well, that old adage of "you can't re-fi the purchase price" is the next thing to fall as we continue to destroy our nation's foundations. Anything's possible at this point, if the Fed makes such a statement.

The nationalization of housing in the USA is progressing. We're doing everything BUT placing houses and apartments into a government database and then doling them out by administrator direction.

Anonymous said...

Why try - I should just stay home smoke pot and play XBOX all day.

Anonymous said...

I have a Coach purse I bought for $800 - but I think I paid too much. I'm going back to the store and asking for $200 back. I think that is fair.

Anonymous said...

bwa ha ha ha ha ha

bwa ha ha ha ha ha

the renters are getting pissy that once again they will lose out.

Anonymous said...

The USA has invented a new economic system, I think we should call it Junior High School Capitalism.

Bucky said...

/quote:"OH MY WHAT A DEPRESSION:"/

***Well, speaking of "a depression"

http://tinyurl.com/2ekj2u

CHICAGO (MarketWatch) -- Housing is in its "deepest, most rapid downswing since the Great Depression," the chief economist for the National Association of Home Builders said Tuesday, and the downward momentum on housing prices appears to be accelerating.

deepcgi said...

So all of those sales were for lower amounts than the records would indicate, and yet the original seller gets away with the total amount. Why should the bank lose? Make the original seller pay for the new owner's mortgage.

Anonymous said...

Are these bailouts constitutional?

SeattleMoose said...

I lost money in Vegas...do I get reimbursed? PLEEEZ Uncle Ben!!!

Anonymous said...

Folks stay liquid! The Fed is playing a game with interest rates to suck us into more debt before he raises interest rates all in an effort to help his banking buddies.

Get out of debt, stay liquid and be ready for some great buys for houses, cars, watches, boats etc..

Good luck!

Market Maker said...

We know that renting is much cheaper than owning, especially for those who are underwater. Anyone who could afford one of the proposed crammed down, frozen teaser rate mortgages could afford to rent. Let's help these buyers boost their cash flow.

We keep hearing that foreclosure is expensive, making it a bad option for banks.

The obvious policy solution is to make foreclosures fast and cheap. Overextended homeowners win. Banks win. No contracts get torn up.

I'm sure some simple reforms could help a lot. Just one example: the question of who owns the mortgage is slowing down some foreclosures. But the main question, whether the buyer is in default, is much easier to establish. Let's have a look at their mortgage and canceled checks (or electronic equivalent) and get the ball rolling. There will be plenty of time for the originator and lender(s) to divvy up the money once the property is auctioned off.

The true "liquidity problem" is in the home selling process. The "credit market liquidity problem" that the pundits whine about can be translated as "lack of suckers/governments willing to take loans off our books at inflated prices" (subsidized rates).

Anonymous said...

I predict a new trend:

HOUSE-JACKING!

Well armed thugs taking someone home by force.


-----------------------------

It's already started, BUT the homes being taken are the VACANT ones. After all, why bother with risking being charged felony criminal home invasion; when there are thousands of VACANT REO properties everywhere.

If you get caught squatting in a vacant home, I believe that the crime is a much lesser charge of criminal trespassing.

deepcgi said...

When the international press keeps saying, with regard to mortgage-backed securities that "no one knows who owns all this paper", what exactly does that mean?

Honestly, does it mean that no one wants to know? Does the bank want to know? Does the true owner of the security want to know? How do the international banks unwind all of this without triggering the Derivatives China Syndrome? I actually am starting to see the potential for a 60 percent drop in average prices, here.

Anonymous said...

angelo m.
If your money isn't offshore in a nice safe undetectable account yet you're the patsy.
Maybe you can give an advice to us? It looks like you are so proud of yourself.

Anonymous said...

the renters are getting pissy that once again they will lose out.

So, when your principal gets reduced to $400,000 from $600,000 and I buy the house next door (on a now $400,000 comp valuation) - how exactly did I get screwed?

We both *essentially* paid the same price for the same house - only you've got a lien on the backend of your mortgage that says the bank gets any sale proceeds on your house up to your original $600,000 mortgage.

Anonymous said...

THIS WILL NEVER EVER HAPPEN!!!!


THREE WORDS -

"CLASS ACTION LAWSUITS..."

AGAINST THE LENDERS.

Anonymous said...

Did anybody catch Buffett on CNBS the other night. (And no, "CNBS" is NOT a typo)

They flat out asked him what he thought about bailouts and he basically stated that he felt it was a bad idea for government to intercede in these types of situations. He also stated that numerous unintended consequences arise anytime bailouts or "tweaking" but the Fed or Congress invariably fail and end up just delaying or exacerbating the problem.

Anonymous said...

I bought an over sized McMansion that my spouse and I could not afford. We put zero percent down and the price was 630K. We saw the value go up, up and up and each time we took out a HELOC so we can go on luxury vacations, trips to other locales, expensive furniture, expensive clothing and shoes and so on....

Now suckers, it looks like people like me will be REWARDED. Ha, ha, LOL, LOL, LOL. The last laugh is on me and not on you HP'ers. You folks kept hoping for a total collapse of the real estate market. Now, the money that you worked hard to save will be transferred to people like me.

Anonymous said...

Once that happens, everyone will suddenly fall behind on their payments and demand their principle balance reduced or else they will walk. The banks and MBS holders will crap in their pants and the entire financial system will follow.

Man of Hope said...

Market is up today you losers and phophets of doom! Everything is fine.

Anonymous said...

Homedebtors who bought modestly and made their payments on time are going to trash and burn the houses of the scum who took out liar's loans and didn't make their payments.

______

Oh, really? Why would those who've always exercised restraint and played by the rules suddenly become anarchists?

People say such dumb things.

Anonymous said...

The MORAL of the Story??

It just doesen't pay to play by the rules anymore, buy only what you can afford and pay for it on time. GO NUTS AMERICA!!

Again, we have a bunch of short-term thinking TWITS running our country that think only of the next 2 weeks at the HUGE expense of the long term health of our country!!

I'm with the other poster--I just want to quit my six figure job, stay home and smoke pot all day...working for a living is overrated.

Anonymous said...

Market is up today you losers and phophets of doom! Everything is fine.

______

This is a fake troll, right?

No one actually says $h|t like this and believes it any more, do they?

Anonymous said...

Are these bailouts constitutional?

_______

Of course not.

Very dumb question. Our whole monetary system is unconstitutional.

Get a clue, d|p$|hit.

Anonymous said...

Maybe they should apply it to everyone. Not going to happen because of massive contract law violations.

Anonymous said...

REMEMBER -- When the recently "enlightened" mainstream media reports that house prices are plummeting (which they are), you should also understand that they are plummeting against a currency that is ALSO PLUMMETING, namely, the US Dollar.

That is, even in terms of the more-and-more worthless US Dollar, houses are losing value!!!

I see that some of you still have that stupid deer-in-the-headlights look. Some of you will NEVER get this, if you don't get it by now.

Anonymous said...

If this passes then I will personally take a cram down on the rent I pay. If my LL doesn't like it I'll tell him to talk to Bernanke.

Anonymous said...

What about when my car loan is under, I think the bank should drop the principal on that too.

Some old guy said...

"Bens actions enforces my belief houses are WAY OVERVALUED, and we will never see these prices again like these in our lifetimes.

Welcome back to the 1980's."

Funny you should say that. I am old enough to rememeber the old S&L scandals and the trouble that caused with home values. As I remember they were saying almost exactly the same thing about property values as they do now. However, those that were smart and were able to hold their property made back all their money and more within 5 to 6 years. All while having a tenant service the loan. I would not make a statement like that unless you know what you are talking about and actually lived through an actual RE cycle. Each time this happens, everyone says - Oh this is the end, your house is worthless yada yada yada, somehow it fixes itself, and houses continue to appreciate. For the record, I am not a Realtor, flipper etc. simply an obsrvant person that has lived a little while and have seen this before.

Don't worry, those that gambled will fall, those that are smart will survive, and those that are patient will prosper.

Anonymous said...

You guys are a bunch of whiners. As the saying goes, never look in another man's pocket.

Let the banks knock $100K off their debt trap. Who cares? They're still in over their heads while I am debt free. I'd rather be me than them.

Anonymous said...

This would drive interest rates to 20% just like the early 1980's

GeneralVanNuys said...

Should result in a general ownership strike organized right here on HousingPanic, where "responsible" homeowners stop paying their mortgages to take advantage of the new rules. Makes me sick.

Anonymous said...

March 5, 2008 -- The Upper East Side mansion seized from former Penthouse magazine publisher Bob Guccione has been sold by his creditors for a very sexy price.

According to city transfer records, the 27-room townhouse on East 67th Street, between Fifth and Madison avenues, has just sold for $49 million to Wall Street financier Philip Falcone.

Anonymous said...

Got Gold?

Anonymous said...

The Mexican...

unfuckinbelievable...Bernanke has no shame!

Anonymous said...

Anon 9:59 said:" I would not make a statement like that unless you know what you are talking about and actually lived through an actual RE cycle. Each time this happens, everyone says - Oh this is the end, your house is worthless yada yada yada, somehow it fixes itself, and houses continue to appreciate."


I would agree with you, except this housing bubble/credit crunch/derivative crisis is 100 times worse than the S&L scandal.

Additionally, cities here in Calif. are talking about raising parcel taxes on property owners and in turn, insurance companies are raising homeowner policies because of the uptick in houses going "poof" in the middle of the night...

Anonymous said...

The Mexican...

Let's give all the irresponsible homeowners that didn't know how to manage their money and spent all their equity...more equity. That'll fix the problem.

Anonymous said...

This just goes to show homes are way overpriced. BB also said this would cause the price to fall more requiring more forgiveness of "principal"

Burn Baby Burn

Anonymous said...

Does anybody have any question that the government is setting up a massive bail-out plan . Do you really think that the lenders are going to pay the full tap on this loan balance reduction plan that the Chairman is letting the cat out of the bag on .

You see ,the problem right now is that the government can't take over these loans as long as there is no equity . Once the equity is crammed down , now the government can buy the loans from the lenders after they make a deal with the government at what % the government(taxpayers ) will pay of the loss .
Are we going to allow this slow gradual violation of contract law at the taxpayers expense to save the lenders ? At some point the government will announce that they are going to buy these crammed down loans .

Andrew Hac said...

The Americano is as toasted as a snapper turtle skewered on a stick from head to ass all sizzling, juices dripping, fat popping over a bed of white hot charcoal grill.

Americano = Grilled Snapper Turtle

Heeeee... Haaaaa... Arrrrr...

The mentality of the average Americano is just amazing, if not stupefying.

A Circuit City Sale Associate is able to buy a house.
A Shoe Sale Man is driving an Audi.
An uneducated, illiterate, ignorant Ford factory auto-assembly worker makes $40/hour.
The Iraqi has Weapon Of Mass Destruction.

Talk about brain-dead zombie, blind-as-a-bat crapper. Maybe that is the reason why there is such word as "Trailer White Trash", "BORKAFATTY" AKA The Pig chomping at the feed trough...

Anonymous said...

Ok I was reponsible and didn't buy what I could not afford WTF where is my free house Ben?

Andrew Hac said...

This Americano nation and its citizens, occupants, dwellers are low and despicable.

How can you call yourself the greatest nation on Earth when dishonor, divorce, immorality, greed, cheat is every day's code of conduct, the way to conduct business in the land of the Snapper Turtle.

Look around you: What do you see ? Fat-ass Americano male and female driving that chicken-coop, pig-raising SUV or F350, for what I may ask ? So you can feel big and powerful. Here is a suggestion if you want to feel almighty, big, and powerful: Go and invade Red China, right now, at this minute, and see what the result may turn out to be.

As I have stated over and over again: This land of the Fat-Ass Americano Homosexual Erectus is a sewage now. And the Americano is being slowly roasted nicely over a bed of white hot charcoal, skewered from mouth to ass like a Snapper Turtle, juice dripping down, fat oozing, sputtering, succulent flesh aromatically wafting hungryly in the air.

Americano Homosexual Erectus == Roasted Snapper Turtle !!!

Go Hick, Hillbilly and Cracker Nuthead. Party all you can. Drink that Cold Mountain rotgut moonshine until you puke your snapper turtle gut out. The doomday is coming and it will judge you and your heathen crowd harshly.

Anonymous said...

I have a Coach purse I bought for $800 - but I think I paid too much. I'm going back to the store and asking for $200 back. I think that is fair
-------------------
Are you sure its genuine? If not, if its a fake made in China, then its not even worth $20 bucks.

Russ DoGG said...

When you want to take advantag of the new rules and stop paying your mortgage, I can see a new army of fashion advisors and staging consultants whose job is to show you how to look poor.

Think about it...
Fake W-2's showing a low salary.
The medical bills ate my housepayment type excuses.
A desire to dress run-down for the interview, to look generally poor.
consultants advising you how to make th house look temporarily less valuable, so that it appraises lower, nad then you get the loan principal partially forgiven.
A new market for goodwill-type clothes.
Homedebtors trying to hide their hummers, gold chains, and assorted bling in the hopes of getting principal reductions forgiven..

This could really be hilarious. I'm just shocked sucha stupid idea came from Bernanke.

Hilarious- I oould start a new business to help people secure the reductions. I would (i) hide the signs of wealth- like stash your hummer until the appraisal is over. And lend you a beater car to put in the driveway
(ii) loan you some crummy cheap clothes to wear in the presence of hte bank officer and appraiser. You must look poor to succeed!
(iii) stash your good silverware adn replace it with some cheap crap for hte occasion
(iv) ditto with any artwork. Replace it with cheap shit.

A Whole class of fraudsters would suddenly be trying to look poor. This is truly hilarious.

Anonymous said...

Americans look down on countries that are so democratic, but you don't hear these sorts of absurdities spouted by politicians in, say, Russia. That's because if a Russian politician was stupid enough to suggest something like this, he would "disappear" or conveniently have a heart attack soon after. In many ways, this is a more efficient system.

Now here in the USA we have to listen to this drivel, and there's even a risk that the idea could go somewhere. No matter that sticking it to the lenders will only drive borrowing costs way up, and thereby depress the housing market further (can you say "vicious cycle"?).

That's all ok with me--when mortgage loans become unaffordable, and housing prices sink lower than even I thought possible, it will just make it that much easier for me to buy a house with cash.

Anonymous said...

Stop your crying. Just because you didn't "get yours". I flipped 3 houses during the bubble, pocketed $190k and traded up to a bigger and better house. NOT A RENTER!!

The Government is doig everything they can to keep me in MY awesome house. Sure I'm outta work because no more flipping, but that actually is a good thing because having no income qualifies me for all sorts of help with my mortgage. I'll wait for full bailout and then go back to work.

Now Ben's gonna reduce MY mortgage for me on my bitchin home and I win again! You lose!

PoolSide

Anonymous said...

LOL - this will be pure chaos. Get ready for smart lawyers pushing lawsuits, class actions by responsible homeowners. They will push back on this violatation of contract law. Responsible homeowners will not be suckers and will very quickly act. Or just stop paying mortgages. The fur will fly.
charlottemom

Anonymous said...

"That's all ok with me--when mortgage loans become unaffordable, and housing prices sink lower than even I thought possible, it will just make it that much easier for me to buy a house with cash."

Good thinking jackass. Might I remind you that when you are able to buy your house for cash, you probably won't want to because the neighborhood it is in will have no more stores, and with the unemployment rate being close to 9% most of the people still there will be squatters living in long since abandoned McMansions. Oh and the crime rate will be so high, that you will end up being beat up or killed for having the cash in the first place.

Listen, I want to see the banks drown in their own BS as much as the next guy, I just don't like the rest of the people in the country to have to pay for it with their 401K's, Fixed Income accounts, Taxes, and Jobs. I think that we need good leadership in Washington. Not a bail out, but a comprehensive plan to fix the problem. Ben is blowing smoke, the Prez is a clueless bafoon, and everytime Paulson speaks he sticks his foot up his own a$$. This morning their statement that now they do not back the GSE's during a crisis was just plain dumb. Kind of like "I am committed to a strong dollar" and you have seen what happened with that. Maybe they back the GSE's, maybe they don't but uttering that to a fragile market during these times is like adding gasoline to an already blazing apartment fire and was just irresponsible. Again, dumba$$ politicos. If they can't do anything good, then shut up and let others or the market fix it. Dumba$$ should have stepped in years ago when these mortgages were being made to people with no income and barely a grasp of english. Oh, but wait, that may have cut in to his true masters profit - Goldman Sachs.....oops, my bad.....What a horses a$$. Rant over.

sasquatch said...

Might I remind you that when you are able to buy your house for cash, you probably won't want to because the neighborhood it is in will have no more stores, and with the unemployment rate being close to 9% most of the people still there will be squatters living in long since abandoned McMansions. Oh and the crime rate will be so high, that you will end up being beat up or killed for having the cash in the first place.



sign me up cuz i'm ready to move in!!! that sounds better than my neighborhood!!!