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White house reaches mortgage deals

The last post in this topic was posted 4632 days ago. 

 

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Is this something to depend on when it is time for loan adjustment. I know there is qualifications involved with this deal like owner occupied property, on time payments untill loan adjusts,etc...

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Well, I'm in the process of being a responsible buyer, so can't say I'm real crazy about the plan-I believe people should be responsible for their actions and that if you're signing something you should understand what you're signing. I think a lot of people in the US are too financially irresponsible. health issues, etc I'm sympathetic to, but a reckless purchase based on speculation? no...easy lending standards added fuel to the fire of rising home prices. uncle sam to the rescue, yay

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If people weren't buying homes 4X their annual income with exotic mortgages none of this would have happened. Buying a $200K house with no money down on a $50K income is a disaster waiting to happen.

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One can blame the industry that let 'em do it, but we also must fault the investors to which the industry was selling the stuff ... because they were just chasing returns and not analyzing the safety of the instruments they were buying ... which calls into question the rating agencies' job peformance.

 

Everybody who has done wrong will, however, pay a price; just not as high a price as you want them to pay. But remember, to exact that full price from them, you would have to be willing to see the housing market crash, and that would tank the value of your house, along with everyone else's.

 

It's in the bible: forgiveness does as much for the forgiver as it does for the one forgiven.

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what happened to letting the market work? moral hazard indeed.

 

Does "letting the market work" include Fed manipulation of interest rates, the size of our money supply, tax codes and such? Our economy is heavily manipulated already. Making a relatively small (1% or so) concession to freeze certain rates isn't going to make Milton Friedman roll in his grave.

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what happened to letting the market work? moral hazard indeed.

 

Does "letting the market work" include Fed manipulation of interest rates, the size of our money supply, tax codes and such? Our economy is heavily manipulated already. Making a relatively small (1% or so) concession to freeze certain rates isn't going to make Milton Friedman roll in his grave.

 

this is about the socialist in the WH, but not apropos for this board. sure there is a lot of regulation already, but this is feel-good pandering at its best.

 

the moral hazard argument is real here, IMHO, with the potential to harm credit markets

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what happened to letting the market work? moral hazard indeed.

 

Does "letting the market work" include Fed manipulation of interest rates, the size of our money supply, tax codes and such? Our economy is heavily manipulated already. Making a relatively small (1% or so) concession to freeze certain rates isn't going to make Milton Friedman roll in his grave.

 

this is about the socialist in the WH, but not apropos for this board. sure there is a lot of regulation already, but this is feel-good pandering at its best.

 

the moral hazard argument is real here, IMHO, with the potential to harm credit markets

 

ITA that the discussion isn't going to get into much detail here, lol. I'd agree on the moral hazard part if the legislation were actually going to apply to a significant number of people. The restrictions are not exactly minimal. Figure I heard is 1.1% tops.

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what happened to letting the market work? moral hazard indeed.

 

Does "letting the market work" include Fed manipulation of interest rates, the size of our money supply, tax codes and such? Our economy is heavily manipulated already. Making a relatively small (1% or so) concession to freeze certain rates isn't going to make Milton Friedman roll in his grave.

 

this is about the socialist in the WH, but not apropos for this board. sure there is a lot of regulation already, but this is feel-good pandering at its best.

 

the moral hazard argument is real here, IMHO, with the potential to harm credit markets

 

ITA that the discussion isn't going to get into much detail here, lol. I'd agree on the moral hazard part if the legislation were actually going to apply to a significant number of people. The restrictions are not exactly minimal. Figure I heard is 1.1% tops.

1.1% of a very large market is a lot of money.

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correct hege: calling the President of the United States a socialist in my forum is not appropriate.

 

but i do agree that he is wrong here..... i dont understand his angle.

 

regardless of the fed actions.... the market will absorb this. it will just cost us all more if they get involved. especially if congress starts trying to 'help'

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Why would the mortgage rescue plan plan cost us all more?

 

<br />correct hege: calling the President of the United States a socialist in my forum is not appropriate.<br /><br />but i do agree that he is wrong here..... i dont understand his angle.<br /><br />regardless of the fed actions.... the market will absorb this. it will just cost us all more if they get involved. especially if congress starts trying to 'help'<br /><br />
<br /><br /><br />

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Why would the mortgage rescue plan plan cost us all more?

if you are a big investor in mortgages and now a portion of your portfolio can only adjust down in value are you going to provide capital in this market in the future?

 

more over:

http://en.wikipedia.org/wiki/Moral_hazard

Edited by hegemony

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an article I just read noted that over 80% of todays foreclosures are not caused by higher interest rates anyway. 53% was due to loss of job, 9% due to divorce, and so on. for those, the interest rate freeze will not have an impact anyway. IMO, just a feel good move, no real value to the market.

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an article I just read noted that over 80% of todays foreclosures are not caused by higher interest rates anyway. 53% was due to loss of job, 9% due to divorce, and so on. for those, the interest rate freeze will not have an impact anyway. IMO, just a feel good move, no real value to the market.

I think I saw the same article.

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an article I just read noted that over 80% of todays foreclosures are not caused by higher interest rates anyway. 53% was due to loss of job, 9% due to divorce, and so on. for those, the interest rate freeze will not have an impact anyway. IMO, just a feel good move, no real value to the market.

I think I saw the same article.

 

 

link?

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:angel:

 

Not everyone who took out an ARM did it because they could not afford the home. DH and I took one out because he was an active duty officer and we knew we would not be stationed in this area more than 2 years TOPS. The 3/1 ARM seemed like a PERFECT loan for us, however we did not take into consideration him passing away. I have been considering a refi on my home and this will certainly save me a considerable amount of money.

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<_<

 

Not everyone who took out an ARM did it because they could not afford the home. DH and I took one out because he was an active duty officer and we knew we would not be stationed in this area more than 2 years TOPS. The 3/1 ARM seemed like a PERFECT loan for us, however we did not take into consideration him passing away. I have been considering a refi on my home and this will certainly save me a considerable amount of money.

 

I am sorry to hear about your lose. I think your post speaks to same thing as the article. Unforeseen circumstances that caused most of the foreclosures. Not the varible interest rate. I too had a varible 4 years ago. I intended to see the home before it went up. Which I did sell this spring. I knew what I was taking out when I did it. I think most did. JMO.

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government to the rescue is right. i think this is pandering to voters especially in an election year. the lenders are completely responsible for this and now they are asking unlce sam to bail them out. the market should takes its course but like always we pass the bill to our kids!! this makes me sick!!

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The mortgage relief (such as it is) is just a bandaid (at best). Most foreclosures are as correctly pointed OUT not caused by interest rate shock but rather loss of income i.e. job. EVERY foreclosure in my Association has been based on INCOME loss. i.e. I lost my six figure job and can't find another one. We had one that moved out to Canada and the lender apparently can't figure it out that no more mortgage payments are forthcoming. I had to get a laugh when the loss mitigation department told me "Well maybe the owners will continue to pay even though they moved to Canada" which got my response "O.K. If you say so"

 

AND

 

I expect to see 5 to 10% of my Association to either lose their homes in foreclosure or a distressed sale i.e. short sale in 2008.

 

AND

 

You can reduce the interest rate to ZERO and it won't matter.

 

The other BIG problem which the White House correctly figured out i.e. Voluntary is that if a lender takes a hard nose approach i.e. The interest rate freeze affects our return and you can't force it on us and we are heading off to court. These mortgage securities were bundled off to investors and the foreign investors may or may not simply get with the program in voluntary compliance. The BIG U.S. banks will no doubt go along as it would be too much political fallout not to do so.

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1.1% of a very large market is a lot of money.

 

Most servicers have the ability to modify up to 5% of the loans they service with out violating the terms of the servicing agreement........This has already been going on and has been going on for years........usually into a fixed rate product or through the extention of the lower introductory rate.......So in reality this is nothing earth shattering........and from a political perspective.......BOTH parties have been screaming for something to happen......so why don't we leave the politics out of it......agree with it or not......anyone who has a 401k........and I do mean anyone...... has benefitted from the fed dumping money into the the markets........has it devalued the dollar.......yes......however the market is still trading over 13k or would those of you who don't like this action like to see the market tank down into the 7-8k range again and lose 40-50% of the equity in your 401k's......sorry if this seems like a rant........however I have seen a lot of posts that sound a lot like my kids........he got something I didn't get.........

Edited by cedski

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The last post in this topic was posted 4632 days ago. 

 

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