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10-24-2011, 06:19 PM
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Senior Member
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Join Date: Feb 2011
Location: San Diego California
Posts: 3,261
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Obama's Finance and Politics
Obama not only is pushing a half-trillion dollar jobs program that he knew would never pass for politcal gain, but now he is making another populist unilateral move on mortgages and finance. Here's a perspective from CSM.
Quote:
Under the plan, owners with “underwater” mortgages that are also government-supervised will not need to reveal much about their credit worthiness, job security, or other personal information in order to refinance those loans.
Sound familiar? It should.
During the housing bubble, many borrowers obtained mortgages without disclosing critical financial details. Jobs were plentiful then and lenders assumed home prices would keep rising. If someone hid negative information or lied about their prospects of paying down on a mortgage, the risks were largely ignored and passed on to Wall Street investors.
But after that widespread lack of honesty and integrity was exposed in 2007-08, the bubble burst. Will a return to the old ways of lending without much documentation now be a solid basis to boost the economy?
Hardly. Even under the current federal mortgage-modification programs, more than half of those granted new loans were back in default within six months. And those loans were negotiated under strict credit standards, not the loose rules coming from the Obama administration.
The president’s plan may reflect a last-ditch attempt to boost the housing market before the 2012 election. Many of Mr. Obama’s efforts so far have done little to slow down the pace of foreclosures or achieve significant numbers of refinancing.
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cf. http://www.csmonitor.com/Commentary/...All+Stories%29
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Dear Optimist: Unless life gives you water and sugar too, your lemonade will suck.
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10-25-2011, 08:10 AM
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Resident octogenarian
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Join Date: May 2009
Location: Maryland
Posts: 20,860
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All this pissing and moaning is doing a great deal to end this recession - NOT.
When we paid off the mortgage on this property (and when I paid of the one in Canada) I flushed the mortgage but not my brain along with it. Unless Freddie or Fannie (i.e., we taxpayers) refund the money to the banks, they lose money on every foreclosure. Empty houses, unkempt and broken, drive propety values down for everyone. Far better to have people in them taking care of them.
So what if some of us paid up and on time, if taxes are used to keep people in their homes is that not better than keeping some bank afloat. In the end it may accomplish both actions and it is still the taxpayer who funds it.
This recesssion is not going to end until all these foreclosures go away. No matter how this is accomplished you and I are going to foot the damn bill and I would as soon not throw people out of their homes in the process.
Admittedly now that I am retired I do not shave every day, but when I do so I like to be able to look at myself and not throw up.
PS: And to qualify under this new plan payments have to have been on time and up to date for the last six months.
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10-25-2011, 09:55 AM
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Reformed Know-Nothing
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Join Date: Oct 2009
Location: MoCo, MD
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Even Romney's key economic advisor supports it, for what that's worth.
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As long as the roots are not severed, all will be well in the garden.
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10-25-2011, 10:35 AM
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Senior Member
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Join Date: Jul 2009
Location: Denver, CO
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You can argue if it's fair or not, but the housing market won't recover untill the forclosures stop- and then a good while after that. Housing prices will keep going down as long as the market is flooded with cheap foreclosures. Should we have to pay for it? Nope, we really shouldn't. But I'd rather they work something out than have my house depreciate year after year as I pay it off. And of course, the lower it goes, the more people are underwater. It's a nasty cycle. Worth trying to stabalize things if we can.
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10-25-2011, 10:44 AM
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Reformed Know-Nothing
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Join Date: Oct 2009
Location: MoCo, MD
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I think the only ones who will be possibly be hurt will be those holding the mortgages or mortgage-based securities based upon 7% loans, rather than 4% loans. OTOH, if lots of 7% loans foreclose and the 4% refinanced loans don't, it may be a wash.
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As long as the roots are not severed, all will be well in the garden.
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10-25-2011, 10:52 AM
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Senior Member
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Join Date: Jul 2009
Location: Denver, CO
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It's worth noting- I sure wish Obama had taken this more seriously earlier on. Glad he's doing what he can now, but it sure did seem to take a back seat to bailing out the banks and auto industry. Yeah, those were bigger problems, but to do it now does smack of politics. Glad it's happening, all the same.
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Two days slow. That's what they are.
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10-25-2011, 07:01 PM
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Senior Member
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Join Date: Dec 2010
Location: Willamette Valley
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Banks should have been allowed to fail as they were to big to continue. That should have been Obama's take but he yeilded to his masters and gave them all of the American tax payers hard earned money to shelter away in off shore accounts.
All of the "bail out" money should have went to the american people to pay off their mortgages. This would have saved the banks, the economy and the country. The "toxic debt" would have pretty much disappeared and all of that cash would have actually went into the economy and not to offshore tax shelters for the "to big to fail" group.
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10-25-2011, 08:28 PM
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Senior Member
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Join Date: Aug 2010
Location: Metro Detroit
Posts: 13,016
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Quote:
Originally Posted by Rex E.
Banks should have been allowed to fail as they were to big to continue. That should have been Obama's take but he yeilded to his masters and gave them all of the American tax payers hard earned money to shelter away in off shore accounts.
All of the "bail out" money should have went to the american people to pay off their mortgages. This would have saved the banks, the economy and the country. The "toxic debt" would have pretty much disappeared and all of that cash would have actually went into the economy and not to offshore tax shelters for the "to big to fail" group.
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Ok, but if the plan would have been to bail out all the folks who were defaulting on their mortgages, then my first plan of action would have been to default on my mortgage...and I doubt I'd be the only one doing so.
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10-25-2011, 09:04 PM
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Loyal Opposition
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Join Date: Oct 2009
Location: Johnson County, Kansas
Posts: 14,401
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Quote:
Originally Posted by whell
Ok, but if the plan would have been to bail out all the folks who were defaulting on their mortgages, then my first plan of action would have been to default on my mortgage...and I doubt I'd be the only one doing so.
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Do you really mean that?
Regards,
D-Ray
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Then I'll get on my knees and pray,
We won't get fooled again; Don't get fooled again
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10-26-2011, 06:21 AM
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Senior Member
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Join Date: Aug 2010
Location: Metro Detroit
Posts: 13,016
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Quote:
Originally Posted by d-ray657
Do you really mean that?
Regards,
D-Ray
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Probably not, but I think there would be a whole lot of folks who would rush to do it. Fundamental law of economics, lower the price (or make it free), and you increase demand. With the entitlement mentality that we've cultivated in the US of A, I'm confident that a fair share of our citizens would find a way to get a piece of the action.
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