posted on October 8, 2008 10:49:11 AM new
I thought I was hearing wrong when last night McCain said that he would have US renegotiate home mortgages at the new value of the buyers' homes.
Not new interest rates, but new home values!
Is he kidding?
F me for paying my mortgage off. Nobody lowered mine because housing tanked. I don't have a problem with lowering interest rates for people having a hard time, but revaluing the principal is just plain wrong.
Hey, how do I get on this gravy train? Maybe my wife can sell me the house, and I can fall behind in payments, ...
posted on October 8, 2008 11:02:36 AM new
Cash,
Yes, he said that and it is WRONG. I understand what you are saying. We pay our car payments and mortgage every month. Why should we pay for another's HUGE mistakes. By the way, those CEO's should be forgiven and allowed to collect their HUGE bonus. NOT I can't stand McCain and what he stands for.
A poll is not a prediction. It is a snapshot of how people are thinking right now.
posted on October 8, 2008 11:11:50 AM new
Deichen,
"I can't stand McCain and what he stands for."
Unfortunately, McCain doesn't stand for much. He has gone from being reasonable 8 years ago (i.e., not my cup of tea, but within reason) to someone whose position can turn on every whim and poll.
He was strongly anti-torture, anti-Bush economics, etc. 8 years ago. Now, he's beyond the pale. What a sad, creepy, old man.
posted on October 8, 2008 11:39:23 AM new
After the debate, lastnight, I texted my daughter in Ohio and said "Yoda Loses!"
A poll is not a prediction. It is a snapshot of how people are thinking right now.
posted on October 8, 2008 12:32:20 PM new
I was amazed at the McCain plan too - to base home mortgages on TODAY'S VALUES? without recording a lien of any kind?
I have a real problem with this plan unless it involves a pay back to the gov't down the line. It would not be fair if some of those folks who gambled and lost when they took out mortgages on their McMansions got bailed out while the rest of us who lived within our means have to pay for it. NO WAY! I don't want to put anyone out on the street but at the same time these folks should not profit from their folly.
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posted on October 8, 2008 12:33:19 PM new
Squirrel,
On the basis that a stopped clock is right twice a day, you and I agree for the second time in 24 hours Sort of.
I have been railing about tax deductions for housing interest for years, mostly to blank stares. The tax system is not for encouraging home ownership. It is also not for encouraging religious institutions; why don't they pay property taxes?
I support workouts in bankruptcy court. I do not support them for "business as usual."
posted on October 8, 2008 12:34:57 PM new
Squirrel dear, we are talking about the MCCAIN (not the Obama) plan. Your boy outlined a whacky plan for saving the housing market and it involved rewriting the loans to today's values. The rest of us would be signing the check.
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posted on October 8, 2008 01:44:26 PM new
Neglus,
Again you stated what I wanted to say. (POUT)
A poll is not a prediction. It is a snapshot of how people are thinking right now.
posted on October 8, 2008 01:44:49 PM new
You signed that check a long time ago:
Fannie Mae buys mortgages from other companies, backed by taxpayers for all loses, but keeps all profits.
1993
President Bill Clinton ordered new regulations for the CRA which would increase access to mortgage credit for inner city and distressed rural communities.
1997
Clinton loosens Home Loan requirements.
1998
Banks issue loans (0 down, no documentation, 120%) by the thousands (1998-2008)
Executives at FM receive bonuses if loan targets are met.
Freanklin Maines and Jamie Garelick appointed from Clinton admin. to run FM
2003
Bush proposes new committe to clean up FM. Torpedoed by Democrats in committee.
Melvin Watt (D-NC) "I don't see much other than weakening the bargaining power poorer families to get affordable housing"
1999 - 2004
Raines earns 100m in bonuses, Garelick 75m.
2004
Enron collapse
Government moves to regulate corporation more heavily.
OMB finds massive bookkeeping fraud at FM. False numbers triggered executive bonuses.
Congress starts no investigation or hearings.
FM pays millions into Democratic causes esp. Jesse Jackson & Acorn
FM pays MILLIONS to 354 members of Congress from BOTH PARTIES
Paid the most:
1) Chris Dodd (D-CT)
2) Barak Obama (D-IL)
3) Chuck Schumer (D-NY)
4) Barney Frank (D-MA)
2005
Franklin Raines and top execs forced to resign, keeping all bonuses but forced to pay 31.4m civil fines.
No jail time.
John McCain (R-AZ) sponsors Federal Housing Enterprise Reg Reform Act
"If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that FM
and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole."
None of the top 4 support the legislation which is eventually blocked by Democrats in committee.
None of the 354 politicians returns any of the fraudulent money.
2008
FM and Freddie Mac go bankrupt
Lehman Bros goes bankrupt after investing in mortgages.
Franklin Raines sought for mortgage advise by the Obama campaign.
posted on October 8, 2008 02:32:35 PM new
Squirrel's post up there is a word for word copy of a post that can be found on a million right wing forums. It's usually titled "The History of a Financial Disaster". It was most likely orignally a forwarded email. You know, the kind Colin and Bear get sent from "a friend". The ones with no citations and no proof.
posted on October 8, 2008 02:33:27 PM new
I don't know why people keep referring to the Community Reinvestment Ac, which was enacted to stop defacto redlining by banking institutions (racial discrimination any way you cut it), as the cause of all this mess. The bulk of the loans were not made to the citizens that were helped by that act.
posted on October 8, 2008 02:38:38 PM new
Squirrel,
Please post a link to where we can check your post. I am assuming you won't and can't but maybe we will be surprised.
A poll is not a prediction. It is a snapshot of how people are thinking right now.
posted on October 9, 2008 09:09:13 AM new
Squirrel,
I'm not going into the past here on this post. Do you, or do you not, think McCain's plan to purchase mortgages at FULL face value is a good idea?
Mind you, there is room for reasonable people to debate whether mortgage assets should be fairly priced at $0.20/dollar or $0.50/dollar or any other number, but I don't think anyone would value them at $1.00/dollar.
How about a haircut for the lending institution? How about a profit for the taxpayer if the home goes up in value?
Your point about foreclosures is well taken. Everybody loses in that case. However, there is plenty of middle ground between foreclosure and a full-price buyout of the loans.
posted on October 9, 2008 09:39:20 AM new
It would depend on the circumstance. For instance, if you are under the assumption, you have a 700B bailout and now McCain says do THIS, you formulate an opinion.
Buffet was the biggest holder of FM bonds, etc. He sold out 9 YEARS AGO. My broker said his firm dumped all of it 6 YEARS AGO. He also says 700B is nonsense, it will be TRILLIONS. As long as I've known him, he's never been wrong.
The fat cats know this. So maybe if they don't do this everything collapses????
posted on October 9, 2008 10:03:49 AM new
I agree that it will likely be trillions (globally, it might be that much already).
My support of the 700B bailout was provisional, on the basis that a price SLIGHTLY higher than mark to market would be paid for the assets purchased by the US. The idea was to get the toxic assets off the balance sheets, at a slightly better price than could be gotten in the frozen market, but not to give a huge present to the seller. The idea was that a fair portion of those assets should yield a profit to the taxpayer if held to maturity. Some lose, some win: fair play.
My problem with McCain's plan is that as constituted, it is a gift of 300B or so to the LEAST deserving of the lower and middle classes: those that purchased more than they should have in markets that were over-priced. I don't mind giving them a hand when the interest rates are just too high for them, but I can't tolerate the idea of resetting their mortgages to the current value of the house, especially if I, the taxpayer making this possible, get nothing if they sell in 10 years with a sizable profit.
posted on October 9, 2008 10:13:07 AM new
THat's my problem with it too Cash. Surely the Government could record a second mortgage lien in the amount of the mortgage buydown that would have to be repaid when the property is sold so the borrower would not profit. I hope that would be part of any mortgage buydown plan. not just McCain's.
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posted on October 9, 2008 03:32:05 PM new
Note that these are not exactly liberal leaning newspapers (except Krugman):
Brad DeLong, New York Daily News: "John McCain's new foreclosure plan is a giveaway to the banks... Put this in perspective. Under the just-passed $700 billion bailout bill, the Federal Housing Administration is already charged with guaranteeing and refinancing up to $300 billion of mortgages. But there is a big difference between that and what McCain proposes. What we already have requires that the bank get only 85% of the face value back. Under the deal McCain is offering, the banks could get back 100%. Why do they deserve it? ...Out of the blue, McCain has just proposed a large, no-strings-attached gift of taxpayer cash to bank executives who failed at their business of risk management, and to bank shareholders who failed at their business of hiring executives. That's simply corrupt."
Krugman: "John McCain's bailout plan manages to take everything that's wrong with the Paulson plan and make it worse."
And when your plan is too beneficial to the wealthy, irresponsible and/or crooked CEOs for even the Wall Street Journal editorial board and the National Review, you're reaching into new territory.
Wall Street Journal editorial: "The 'Resurgence' is different, the McCain campaign says, because it is more 'aggressive.' By this, it means that this one doesn't require lenders or investors to share the pain. Instead, the government will buy the mortgages for their full amount and write a new mortgage that reflects the current (lower) value of the home. The taxpayer -- not the lender or homeowner -- absorbs the losses on loans that exceed the value of the home."
National Review: "McCain's plan would also be a gift to lenders who abandoned any sense of prudence during the boom years. Under the Frank-Dodd bill, lenders must agree to 'take a haircut' -- slang for writing down the value of a mortgage -- in order to qualify for federal insurance on a distressed mortgage. The lender bears an initial loss but is protected if the borrower eventually defaults. McCain would transfer that initial loss to the taxpayers. Under his plan, the government would buy mortgage loans at face value and then reduce the principal and interest on these loans to accommodate distressed borrowers. Taxpayers would take so many haircuts we would all look like Britney Spears after a three-day bender."
posted on October 9, 2008 10:42:16 PM new
I meant trillions in the US not worldwide. And of course, just transferring the current number means that now the taxpayer has to foreclose on a house that can not be gotten rid of for what is still owed on it. It a simple principle, you take what you get.
I don't get it. Almost everyone here has a laundry list of things people are "entitled to". If someone is entitled to something and cannot pay for it, it means SOMEBODY HAS TO TAKE IT IN THE NECK. It would seem you all what something as long as someone ELSE pays for, which is a great trick if you can do it.
Don't you think these poor people have the right to own their own home???
posted on October 10, 2008 04:05:58 AM new
Squirrel,
I think you're projecting a pre-formed image onto us. I don't see anyone here suggesting that people have a right to own a home that they can't afford. You always leave out the afford part. Of course we believe that everyone has a right to own a home. I have a "right" to own a yacht; I just can't afford one.
Health care and education are somewhat different. It's a social contract that people will pay their taxes and receive education for their children. It SHOULD be the same for health care.
Sort of.