home

Obama To Help Under Water Homeowners?

By Big Tent Democrat, Section Other Politics
Posted on Fri Aug 06, 2010 at 11:34:44 AM EST
Tags: (all tags)
Share This: Digg! StumbleUpon del.icio.us reddit reddit

This would be a great move:

Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.

The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie.

Good policy and good politics. Let's hope this happens and the GOP whines about the government helping middle class homeowners while insisting on tax cuts for the rich.

Speaking for me only

< Then And Now: The Price Of A Lack Of Audacity | Friday Morning Open Thread >

  • The Online Magazine with Liberal coverage of crime-related political and injustice news

  • Contribute To TalkLeft


    • Display: Sort:
    Obama To Help Under Water Homeowners? | 140 comments (140 topical)

    Readers Must Login or Create an Account to Comment

    I think politically this works only if they also (5.00 / 3) (#1)
    by steviez314 on Fri Aug 06, 2010 at 11:43:21 AM EST
    offer something to homeowners NOT under water.

    Say, if you've owned a home for 10+ years and have always been current on payments, the gov't will re-finance your mortgage for 3% fixed for 10 more years.  (I know, that's me!)

    Sh*t... (5.00 / 3) (#6)
    by kdog on Fri Aug 06, 2010 at 12:01:16 PM EST
    how about a bone for the responsible renters!

    Trying hard not to hate on those who may be helped, but it ain't easy.  Hotshot bankers and brokers got their help and they're easy to hate on...compared to that hand-out it's a no-brainer to help people who bought high and couldn't afford it...but c'mon, at some point we gotta let the boneheads eat the sh*t pie they baked.  Both the Wall St. boneheads and the Main St. boneheads.  

    If this goes through I want my 10k a head general bailout proposal to get some serious consideration...why not right?  Apparently anything goes...I feel like enough of an arsehole without being the only schmuck not gettin' something for nothing:)

    Parent

    Well, supposedly, if your landlord (none / 0) (#17)
    by Cream City on Fri Aug 06, 2010 at 12:43:38 PM EST
    remortgaged at a better rate, it ought to lower your rent.  Just as, supposedly, if your landlord's property has been reassessed down, and if (not often) that means a property tax break, that ought to lower your rent, too.

    Funny how that so rarely happens, though, huh?  Living in a heavily rental area, with student prey, the only thing that I have seen that brings rents down is ye olde law of supply and demand.  It works.

    Parent

    I'm blessed in that regard... (5.00 / 1) (#21)
    by kdog on Fri Aug 06, 2010 at 12:55:14 PM EST
    my sweetest little old landlady ever owns the joint outright, and I can't remember the last time she raised the rent, we even have a handshake lease.  We're a match made in heaven.

    Thanks for the "count thy blessings" reminder while Uncle Sam ponders another giveaway I'm missin' out on...can never have enough of those:)

    Parent

    They are making every wrong decision (none / 0) (#24)
    by Militarytracy on Fri Aug 06, 2010 at 12:58:38 PM EST
    available to them.  Who knows kdog (I can't call you dog cuz then you'd be a bounty hunter with a mullet), maybe in a few years you can buy something decent for $250 the way these idiots seem intent on going about it all.

    Parent
    I'll pass... (none / 0) (#25)
    by kdog on Fri Aug 06, 2010 at 01:04:13 PM EST
    I think if I move I'm gonna be a squatter...I should have my pick of the litter in the working class hoods I feel most comfortable living in if current trends continue.

    Parent
    Check out Puente Polonia in (none / 0) (#42)
    by jeffinalabama on Fri Aug 06, 2010 at 02:04:38 PM EST
    Uruguay... I might be living there, and could help you find an unoccupied shack, or help you build one.

    I like most all of South America, so I'm looking there, and at Ecuador, at some unspoiled beaches I saw on Anthony Bourdain...

    Parent

    What? (5.00 / 1) (#49)
    by me only on Fri Aug 06, 2010 at 02:41:50 PM EST
    Well, supposedly, if your landlord remortgaged at a better rate, it ought to lower your rent.

    Supposedly according to whom?  Economic illiterates?  Saudi Arabia does not charge less for the same grade of crude oil as the US, even though it costs 1/8 to produce it in Saudi Arabia as it does here.

    Parent

    How about a bone for ALL responsible people? (none / 0) (#71)
    by BrassTacks on Fri Aug 06, 2010 at 04:12:28 PM EST
    Those who paid their mortgage or rent even when it was hard, even when they were underwater?  I worry that those people who should never have paid enormous amounts for houses they couldn't afford, like over a million, will get their mortgage forgiven.  Meanwhile they've bought a new car every year, taken expensive vacations, lived well beyond their means, while the rest of us stayed home, drove old cars, and dutifully made our mortgage payments!  What about us?  Why do the over spenders get rewarded for buying houses they couldn't afford?!

    Parent
    What about you? (5.00 / 5) (#86)
    by waldenpond on Fri Aug 06, 2010 at 05:25:29 PM EST
    jeez, it just seems a little shallow....

    Some people have screwed up and it's impacting the whole country but I should give you my money because?  uh, no thanks.  The thought that people who screwed up are being 'rewarded' is absurd, it's about saving the economy for the millions of jobless.  

    It isn't necessarily someone paying 150k for a house instead of 200k.  Some programs involve nothing more than being able to stay in a home by renting.  As if that's some great evil.

    Parent

    As long as I can sleep at night, (5.00 / 6) (#87)
    by Anne on Fri Aug 06, 2010 at 05:28:19 PM EST
    I figure I'm ahead of the game.  We didn't buy a house or have kids or pay off our cars, or pay off our credit cards because we were hoping someone would notice and reward us for doing so - we did those things because they were the right thing for us - and we wanted to be able to sleep at night.  Don't get me wrong, that hasn't been easy.  Periodic bouts of unemployment, unexpected repairs or cars just crapping out when we could least afford it, maxing out our credit: we've been there, done that.  Little-known extra slap-in-the-face is that debt that is forgiven is considered taxable income - so what is "given" with one hand is taken with another.

    For everyone who has so much more than you do, for everyone who is given something he or she didn't earn, there are so many people who have so much less, who work like dogs and still cannot get ahead - who also played by the rules, and through no fault of their own, have slipped over the edge into near-poverty.

    There but for the grace of Whomever go a lot of people.

    Yeah, it seems unfair that those at both ends of the deal - the bad decision-makers in the industry and the bad decision-makers who got into the sandbox with the financial industry - are being rewarded - or have a possibility of reaping some benefit, but if you can sleep at night, in a home you can pay for, have a job and can put food on the table, you are not "losing" anything.

    Parent

    That's well said Anne.... (5.00 / 1) (#93)
    by kdog on Fri Aug 06, 2010 at 06:31:46 PM EST
    especially the being able to sleep at night stuff:)

    Compared to the nastiness this country spends money on, helping people out is a no-brainer...I get that.  

    Me and Brasstacks looking for our check is exactly why all this "goverment spending as savior" talk is dangerous though...people start sittin' around waitin' for their check instead doin' something...like picketing the damn bank or civil disobedient stoppage of evictions.  It just feels like we're throwing money at a broken way of doing things....instead of weening off the junk we're fixing to OD.

    Parent

    Huh? (5.00 / 1) (#95)
    by squeaky on Fri Aug 06, 2010 at 07:32:15 PM EST
    Never thought you were a what about meeee type of guy.

    Never thought you would stereotpye a group in trouble (underwater) as being irresponsible, and complain that it is not fair that they are bailed out, and you get nothing.

    Maybe I am missing something....  


    Parent

    Cuz it's not "what about me"... (none / 0) (#119)
    by kdog on Sat Aug 07, 2010 at 10:44:35 AM EST
    its what about our country and wtf are we doin' to it squeak.  I think there's a better way to help underwater homeowners than making the banks whole (again)...a better way to help addicts than enabling the addiction that created this mess.

    Parent
    Not About The Banks (none / 0) (#128)
    by squeaky on Sat Aug 07, 2010 at 12:02:45 PM EST
    But about cutting some slack for good customers, as opposed to cutting up the customers and spitting on them for good measure, who kept you afloat. And kept the banks afloat by paying taxes (bail out) as well as mtg.

    On the other hand, for those who can stomach it, and it seems that that group is more wealthy and educated, I advocate walking away from an underwater mtg, en mass. Were that to happen, the banks, who depend on compliance, would wake up and realize that their customers do matter.

    This is a good read, Walk Away From Yout Mortgage, from of all places, the NYT...  and more here...

    Parent

    Yeah (none / 0) (#72)
    by squeaky on Fri Aug 06, 2010 at 04:17:25 PM EST
    And what about all the people who managed to continue paying their health insurance and stayed healthy but now have to bail out the fat pigs who all have major health problems and no insurance.

    What about meeeeeeeeeeeeeee.

    Pretty much GOP central position.

    Parent

    Living below your means, buying what you can (none / 0) (#73)
    by BrassTacks on Fri Aug 06, 2010 at 04:28:20 PM EST
    afford is a GOP thing?  Gee, won't my family be surprised when they hear this!  Had we bought a McMansion that we couldn't afford, what would that make us?  Democrats?  Oops, no, we already are democrats!  

    Parent
    BS (5.00 / 1) (#80)
    by squeaky on Fri Aug 06, 2010 at 04:47:27 PM EST
    Greed And envy, are not part of the "virtuous" life formula you pretend you have lived.

    How do I know, because you are crying What about Meeeeeeee!

    The "virtuous" life is an end in itself, and is not a competition.

    Parent

    Don't bother arguing ... (4.00 / 4) (#81)
    by Yman on Fri Aug 06, 2010 at 05:05:20 PM EST
    ... with the Amazing Squeaky.  His mind reading powers give him an unfair advantage.

    The ability to put words in your mouth.

    Parent

    You Are FOS As Usual (3.00 / 2) (#84)
    by squeaky on Fri Aug 06, 2010 at 05:12:53 PM EST
    How about a bone for ALL responsible people?...Meanwhile they've bought a new car every year, taken expensive vacations, lived well beyond their means, while the rest of us stayed home, drove old cars, and dutifully made our mortgage payments!  What about us?

    No mind reading necessary a$$hat, BrassTacks spells it out in plain english:

    What about Meeeeeeeee!

    Parent

    As Brasstacks pointed out, ... (5.00 / 1) (#88)
    by Yman on Fri Aug 06, 2010 at 05:31:14 PM EST
    ... his primary concern was with bailing out those who (irresponsibly) lived far beyond their financial means.  That's not "GOP central", it's common sense.

    Ohhhhhhhhhhhhhh ....

    .... now I understand why you're having such an issue with it.

    BTW - FOS?  Nahhhhhh .... FOS is someone who thinks someone can enter into a common law marriage merely by cohabiting, having kids, or even vacationing in Pennsylvania.

    Parent

    Well (none / 0) (#89)
    by squeaky on Fri Aug 06, 2010 at 05:38:35 PM EST
    I can understand that you would jump to believing that I have mind reading abilities, because your reading abilities are around 2nd grade.

    Clearly BrassTacks is mouthing the same old Welfare queen, lazy irresponsible argument that we have heard from GOPers for ever.

    And if you agree with BT you are aligned with the wingnuts on the issue.

    Parent

    Clearly? (5.00 / 1) (#98)
    by Yman on Fri Aug 06, 2010 at 08:53:45 PM EST
    Yeah - That's what he was talking about when he referenced people buying McMansions that cost more than a million dollars.

    Lotta "welfare queens" doing that.

    (snicker)

    Parent

    Oh (none / 0) (#90)
    by squeaky on Fri Aug 06, 2010 at 05:51:23 PM EST
    And NYS not only recognizes gay marriages from other states, but it also recognized common law marriages from other states pursuant to the "full faith and credit" clause of the U.S. Constitution despite the fact that NYS is not a common law marriage state and despite the fact that same sex marriage is not allowed in NYS.

    Your moronic denial of this fact is, well moronic.

    Parent

    Never denied that, ... (none / 0) (#100)
    by Yman on Fri Aug 06, 2010 at 09:00:23 PM EST
    ... and that was not, of course, your original claim.  In fact, I specifically pointed out that NYS (and every state) recognizes the valid common law marriages of other states.  It was your suggestion that you could end up in a common law marriage merely by cohabiting/having children with someone, or by vacationing with someone in Pennsylvania - a state which does not recognize common law marriages.

    Squeaky - living proof that a little knowledge combined with an overactive imagination can lead to hilarious results.

    Parent

    BS (none / 0) (#133)
    by squeaky on Sat Aug 07, 2010 at 01:36:27 PM EST
    But, that is what you are here for, I guess.

    Parent
    Did you ever notice ... (none / 0) (#134)
    by Yman on Sat Aug 07, 2010 at 03:06:00 PM EST
    ... how often you lead with that same subject line.  Should give you pause to think, ...

    ... maybe it's not everyone else that's full of it.  Yeah, ......... I know, ...

    ... nothing could do that.

    Parent

    exactly my situation. (5.00 / 5) (#18)
    by Dr Molly on Fri Aug 06, 2010 at 12:48:17 PM EST
    Not yet underwater, but heading there if things keep tanking the way they are in my neighborhood.

    Didn't buy a mcmansion, didn't overbuy, modest ranch home, completely responsible, current on every payment, have lost all the (modest) equity I had.

    They ought to do cramdown.

    Parent

    Homeowners not underwater (none / 0) (#96)
    by ruffian on Fri Aug 06, 2010 at 08:49:05 PM EST
    get an economy with a chance of recovery. Without something like this there is simply no chance.  

    Parent
    Though some people... (none / 0) (#120)
    by kdog on Sat Aug 07, 2010 at 11:10:54 AM EST
    don't notice the difference between this economy and a booming one ruffian...alotta people were livin' check to check in 1997, and are livin' check to check now...people who survive in a permanent "down economy".  People who didn't even think to try and jump up a class on the arm.  When do they get a hand?  I don't think bailing out Wall St & underwater homeowners is gonna get 'em a raise over at Walmart or McDonalds.

    I think we gotta find a better play than propping up a busted trickle-down system that only trickles down so far...never raising the boats of people who really need a lift.  

    What is it they say..."never let a crisis go to waste"..well bailing out Wall St. and those who didn't realize the "ownership society" was a conjob could be letting this crisis go to waste and dooming us to a repeat.  And I don't care what anybody says, eventually we're gonna really go busto...then what?

    Parent

    offer something to homeowners NOT underwater (none / 0) (#126)
    by sj on Sat Aug 07, 2010 at 12:00:15 PM EST
    One thing that is being offered to those homeowners is NOT having boarded up residences "next door".

    It's like paying taxes to support schools when you don't have children.  It makes your society better.

    While I would very much like the sweet deal you outline, I don't have a problem with my neighbors getting a helping hand.  Because I would hope that if I should need a hand, it would be there to help me as well.

    That's how I was raised I guess.  When someone needs a helping hand you give it.  Makes for a greater possibility of one extended to you, should you need it.

    Parent

    More than one way... (none / 0) (#129)
    by kdog on Sat Aug 07, 2010 at 12:06:25 PM EST
    to keep the boards off the windows next door sj...stop the eviction with people power, or help a squatter move in. The banks sure take enough from us, time we took something back, like some of the houses they now own outright. Think of it as a transaction fee.

    Parent
    So, when I held off on buying a house... (5.00 / 2) (#2)
    by dainla on Fri Aug 06, 2010 at 11:44:35 AM EST
    because there appeared to be a bubble happening, that was a stupid move then?

    Thee has to be some sort of personal responsibility in all this.  What is it?

    Yeah, you were stupid and you should have (5.00 / 1) (#12)
    by Militarytracy on Fri Aug 06, 2010 at 12:21:50 PM EST
    bought a giant McMansion that taxpayers would later pay for.  You should have borrowed every cent that anyone would have lended you on it too.  Countrywide would have given you 125% of its appraisal at one time.  I should have bought one too other than the house that I could afford, even if the bubble burst...which is what I did.  I'm stupid too.

    Parent
    Seems there is a limit to our liberality/ (5.00 / 1) (#22)
    by oculus on Fri Aug 06, 2010 at 12:56:26 PM EST
    progressiveness.  

    Parent
    apparently (5.00 / 3) (#31)
    by CST on Fri Aug 06, 2010 at 01:22:49 PM EST
    I have no problem with this. They bailed out wall street and gmt.  Honestly having fewer people underwater will help everyone - whether its "fair" or not

    Parent
    Cutting every taxpayer a check... (5.00 / 2) (#39)
    by kdog on Fri Aug 06, 2010 at 01:48:21 PM EST
    will help everyone too, and at least it is fair, if not smart considering how in the red we supposedly are as a nation.  (Though if that mattered the occupations would be over).

    C'mon CST...think of all the economy stimulating fun we could have with a fat check!

    Parent

    the only bailout (none / 0) (#44)
    by CST on Fri Aug 06, 2010 at 02:20:27 PM EST
    I'm looking for now is on my student loans.  Now that's some loan forgiveness I can get behind.  Or a free car. Or I suppose help with that trip to Brazil I'm trying to take for nye.  Anything less than that won't help me much.

    I could do some great things with an extra 20g or so. Everything in my list plus a little extra.

    But someone saving their roof is probably more important.  ill take whatever I can get.

    Parent

    Unless the roof is caving in... (none / 0) (#47)
    by kdog on Fri Aug 06, 2010 at 02:35:44 PM EST
    their roof ain't the problem...the roof has the same value it always did, keepin' you dry and warm.

    Like I've said once before...homeowners aka debt owners can help themselves here...nationwide mortgage payment strike till banks renegotiate back to the realm of the sane...there aren't enough sheriffs to evict everybody.

    Parent

    Yikes, read the headlines re the rate (none / 0) (#51)
    by Cream City on Fri Aug 06, 2010 at 02:45:10 PM EST
    now, the mortgage rate -- it's so low that you and many others might find owning more affordable than renting.  (That's why I finally bought again.)

    Essentially, what you call for already has happened, kdog.

    Parent

    For new buyers... (5.00 / 1) (#54)
    by kdog on Fri Aug 06, 2010 at 02:52:17 PM EST
    of debt, yeah it's happened...I'm talking about those locked in to high rates on homes whose book value has plummeted.  I say book value because the real value hasn't changed unless the water heater went kaput...a home's value is in the shelter from the elements it provides.

    Parent
    House Value (none / 0) (#62)
    by PatHat on Fri Aug 06, 2010 at 03:22:58 PM EST
    kdog,

    I think you have this particular aspect totally wrong. A house's value is way more than its use as a shelter. It has a lot to do with size and condition, but the dominant factor is LOCATION!

    My $100,000 house in Syracuse NY would be worth $500,000 in California. I don't have an equity problem because in Syracuse, there is not much expectation that the house value with appreciate much.

    Parent

    I'm not talking monetary value... (5.00 / 1) (#64)
    by kdog on Fri Aug 06, 2010 at 03:33:08 PM EST
    you're right if monetary value is the measure...size, location, right down to the bathroom fixtures.  

    I'm talking concrete value, real value....nothing to do with money.  The housing market can soar and crash but at the end of every trading day the real value of your home remains unchanged...it's a place to hang your hat.  

    Unless you can't make your payments, or are looking to sell for a move...the book value is irrelevant, the house keeps you dry whether it's book is 100k or 300k on any given day.  

    I think part of the reason the housing market is all farked up is people stopped looking at a home as a...you know, home.  They started looking at it as part of their portfolio...aka Wall St. thinking.  And we've all seen where Wall St. Think has gotten us...

    Parent

    You are talking monetary value (none / 0) (#75)
    by Cream City on Fri Aug 06, 2010 at 04:32:37 PM EST
    because you are talking about homebuying.

    Parent
    Then perhaps the basic thinking (none / 0) (#79)
    by Untold Story on Fri Aug 06, 2010 at 04:46:50 PM EST
    of owning a home for its monetary value is where the trouble begins.  

    I think kdog is right on with the definition of a home's value!

    Parent

    Another unnecessary dichotomy (none / 0) (#97)
    by Cream City on Fri Aug 06, 2010 at 08:50:00 PM EST
    as -- read a home section, a home magazine, in which this always is discussed in terms of decisions to buy, sell, stay, move, etc. -- homes have both tangible and intangible values.

    Why is this so hard to understand?

    Parent

    Perhaps because I am not (none / 0) (#130)
    by Untold Story on Sat Aug 07, 2010 at 12:20:53 PM EST
    conditioned to believing all the sales pitches being offered out there!  

    Owning one's own home, should mean such that, owning a home one can afford.  A home should offer security, peace of mind, and Anne's thought of sleeping at night!

    What happened to all the real value in owning one's own home?  That have been taken over by greed.  

    Commissions are equal to value, the more value, the more the commission earned.  That is why people are urged to go beyond their means by candy-coated deals of living on the edge.  Urged to use this free money, called interest, as it can be deducted from income tax (never mentioned is what happens if there is a drop in income!)

    The consequences should not be with us, for we have had no part in the formation of this new school of thought, or, this conditioning for greed.  

    The consequences need to be felt by those that engineered these false value loans and sold them in bad faith.

    Consequences in the form of real regulations for the banking industry need to take place and be enforced before the innocent taxpayer, is handed, one more time, a request to pay the consequences of corrupt practices.

    Just my opinion.

    Parent

    Again: All that "real value," as you say (none / 0) (#137)
    by Cream City on Sat Aug 07, 2010 at 04:15:19 PM EST
    is still there, of course.

    The question is how to realistically help those who love those homes for that value so that they can come up with the monetary value, too.  That's all.  Not really that complicated for those of us who do not live in such a dichotomous world. . . .

    Parent

    I say lower the interest rate and extend (none / 0) (#45)
    by oculus on Fri Aug 06, 2010 at 02:29:05 PM EST
    the life of the mortgages.

    Parent
    Sounds good... (5.00 / 1) (#55)
    by kdog on Fri Aug 06, 2010 at 02:53:37 PM EST
    the bank and the debt holder need to sit down and sort it...neither should be made "whole", in part, by people renting a sh*tty studio.

    Parent
    No thanks. (2.00 / 1) (#77)
    by Cream City on Fri Aug 06, 2010 at 04:35:16 PM EST
    I have worked hard to keep refinancing my mortgage down to fewer years, in hope that I might still be alive when it is paid off.

    And ye goddess, the mortgage rate never has been so low as now.  Any lower, and it would mean giving away homes for free.  Sure, the voters were darn gullible in 2008, but please don't tell me that Dems now think that voters are that gullible!


    Parent

    Exploring our own limits here (5.00 / 3) (#48)
    by christinep on Fri Aug 06, 2010 at 02:39:44 PM EST
    could teach us a lot about ourselves, as you suggest oculus.  For me, it has been necessary over the years to be thankful for my many blessings throughout my life...especially when I'm tempted by that prickly feeling of "why them, and not me--it isn't fair--they shouldn't take my share," etc. I'm certainly no angel; but, it will help us all to do a gut check of our liberalness/progressiveness. For one thing, if we as a government decide to help out those unlucky homeowners "underwater" and prevent those thousands from drowning, does that really take away from those who were lucky enough or prudent enough (as the case may be) to not buy into the bubble?
    We all make mistakes, don't we? Sometimes it is luck--one way or the other--and sometimes it is not. Why begrudge help (or welfare or assistance or a hand-up) to those who need it? After all, the McMansion crowd (similar to the old "welfare queen") represents only a portion of unfortunate homeowners caught in the undertow of the lonstanding economic woes. It just may be that such a commanding directive to help out main street--while political in inception--would have the positive power to help so many that the ripple effect would be a benefit to the greater economy soon thereafter.

    Parent
    This is not a why them not me thing (5.00 / 1) (#106)
    by Militarytracy on Sat Aug 07, 2010 at 07:18:02 AM EST
    How very sophomoric.  There are certain consumer habits that a majority of Americans will not entertain at this time and haven't for at least a decade, like moderation and an ability to pick and choose and not live in the babyhood immediate gratification.

    The exact habits that they say everyone needs to foster now.....you actually going to punish those who didn't throw good money practices by the wayside.  It is well known that healthy economies reward those people.  If I'm going to be punished for being a responsible consumer I will simply walk away from mortgage.  I won't personally condone it or tolerate it, and I have the money to make other decsions because once again, we've lived responsibly come hell or high water.

    When Joshua was born I could no longer work.  My husband and I must raise and educate kids on one income.  He works himself into the ground, I take care of everything else so he can do that.  He must be the one to excel for the both of us.  We have lived for years with less than everyone else, and we made what we had work for us.  Now you think you will punish me for it?  I don't think so, not with my blessing at least.

    Parent

    A few more words from me, MT (none / 0) (#131)
    by christinep on Sat Aug 07, 2010 at 12:54:40 PM EST
    I really do appreciate your points, MT, and clearly understand what you say. My husband & I bought over 35 years ago a house that was considered by many--realtors, friends, financial types--to be well below what we could afford. We eventually paid it off, we saved too, we pay the crdit cards off every month, etc. I know that you get the picture. (Perhaps, my Polish background makes me more prone to want to put $$ under the mattress or in extremely safe and insured holdings than most...been kidded about that trait for years.) But, I've also been very lucky. My government career (even before I fully appreciated it) gave me access to good health care at reasonable costs and to early, well-funded retirement.
    So, I'll accept your term "sophomoric," and--while trying to use a more polite description--essentially repeat my earlier impression. Again, I agree with your concern about the habits of some who treat money/assets as if it grows on trees and who don't seem to try to understand the interwoven nature of a brand of consumerism sometimes gone awry. Where I very strongly disagree is the retreat to what very much seems like a "they made their bad" theorism. Yes, I hope that you and I will be rewarded (or satisfied) for being good stewards, productive people. (Judging from your warm comments about your family and offering the same about mine, we may well have the greater reward.) Yet, where so many are hurting economically, I believe that it adds to the overall economic hurt to retreat to the what-should-have-been and proper behavior and all that. Keeping thousands of people in their homes supercedes economic, behavioral theory. As the hurt recedes, we as a government can reinject important values about savings, preparation, and responsibility. Assuredly, people may have become their own victims, but these underwater-dwellers do need help now.
    BTW, one bit of good news from a shared ethic: The savings rate for US individuals continues to increase this past year. Learning theory at work.

    Parent
    I don't think we should retreat (5.00 / 1) (#132)
    by Militarytracy on Sat Aug 07, 2010 at 01:29:10 PM EST
    and allow people to hurt.  That is not what I'm saying at all.  But please argue for real solutions that will work for a greater good and further destroy the rest of us.  This is selective rescue and what it really is masking is more bank bailout at full price.

    I'm for helping everyone in a destroyed economy and I am for the BANKS being responsible for what they did.

    After reading Matt Taibbi this morning though about what Geithner did to destroy actual finance reform, nothing that benefits the people is coming the people's way.

    If I had put some bank at risk though, there would be "help" for me.

    Now, they want to remove our health benefit as it exists too.  I guess Josh would go into a high risk pool then if they get their way.  If they do that, this family will be penalized even more.  I'm younger than you.  My house is not paid for and what it is worth is going to crash in the new wave of deflation.  We are a midlife middle class family with a young disabled child, and my ability to keep making the payments is going to penalize me while they bleed a single income family with a disabled child even more.  I'm sorry if I am blunt and gruff with you, but you don't understand the game at hand.  The name of the game is those who have blood to give will be bled dry for anything left that they have.  The name of the game is not called "Helping Americans Recover".

    Parent

    I understand (none / 0) (#135)
    by christinep on Sat Aug 07, 2010 at 03:23:09 PM EST
    A bit of personal info: My sister suffered from rheumatoid arthritis, and lost her lower left leg because of a blood clot when she was 40. I'll tell you that we knew the hospital rounds; but, because she was able to get disability from the state (as a state employee)and because I was fortunate enough to be able to help, we had wonderful times--through the physical pain & even through the mental pain of finding our way through the maze of the medical system. Rita is gone now--about 5 years--the result of a sudden clot again; tho she didn't get to walk this earth (with a good prosthesis) for more than 55 years, she surmounted so much, and with a smile (mostly) and a real passion for social change and helping others. My little sister would be thrilled with the beginning of change underway now through the recent healthcare reform; she taught me more than imaginable. The essential, wonderful joy of life.

    One major philosophical position from this end: Change comes bit by bit...in real life as we completely unfold and grow, and in the world of regulation, sometimes tackling the problems seriatim.

    MT, just about everytime that I read your words, I feel your determination and love for family. Look up, not down. You'll prevail.

    Parent

    I will (none / 0) (#136)
    by Militarytracy on Sat Aug 07, 2010 at 03:49:29 PM EST
    Even if we have to call whoever has our mortgage at this time....God only knows, and renegotiate it ourselves...we will do it.  I have the personality of only 1/10 of the population.  My spouse is that dominant too.  That means to me that 90% of the other people in our pile will not renegotiate, they won't even begin to know where or when to fight for themselves.  Some people don't like to do it.  It scares the hell out of them to stand up.  They rely in a fashion on the 10% who do, and since I'm lucky enough to be born with that voice that will probably never let me go down without a fight....and I will likely have a better standard of living because of squeaky overactive wheels and such, I often feel that I have an obligation to my community to speak the truths before me.

    This country is in deep trouble right now.  And the banks are not looking at you for their meager simple man profit.  If nothing, you are a necessary evil...they all think they are going to make money playing casino some more.  You and I are boring, 5.5% on 30 yrs sux....it's pauper's wages.

    Parent

    Refinance! (none / 0) (#138)
    by BrassTacks on Sat Aug 07, 2010 at 08:54:00 PM EST
    I know more than a few people who are getting interest rates around 4%!   it might be worth it to you to make some calls in your area and see what you interest rate you can get.

    Parent
    My thoughts (none / 0) (#83)
    by NYShooter on Fri Aug 06, 2010 at 05:11:02 PM EST
    exactly.

    Parent
    Me too, Dumb as Rocks (none / 0) (#74)
    by BrassTacks on Fri Aug 06, 2010 at 04:29:23 PM EST


    Parent
    I'm in the same boat (none / 0) (#3)
    by Dadler on Fri Aug 06, 2010 at 11:54:28 AM EST
    But you can take consolation in knowing that even with that help, the value of those houses is not going up for a LONG time.  LOOOOOOOOOOOOOOOOOOONG. If ever in this lifetime. If a good number of people come out of this help able to sell for a profit in a few years, then I will be more than surprised, I will be numb.

    Parent
    Well (none / 0) (#20)
    by squeaky on Fri Aug 06, 2010 at 12:50:44 PM EST
    Not all the same... Prices have gone up in the Northeast... and places like Boston, New York, San Francisco and San Jose seem to be doing well..

    But yes, most of America will not see a rise..

    Parent

    yeah, i know (none / 0) (#35)
    by Dadler on Fri Aug 06, 2010 at 01:33:17 PM EST
    in the little pockets here and there. my mother lives in a lovely part of Pasadena, practically surrounded by CalTech, in a house built in 1888. That neighborhood is fine.  But, hey, that's a nice part of town, and they always do fine, even if they don't, since everyone there can basically afford to weather any storm quite nicely. It's not hordes of affluent taking to the streets in violent rebellion, after all.

    whatever value anything has in relation to money (another thing) right now is not backed up by ANY confidence in the larger general population. because we're all in the dark.  everyone, or a good percentage, kind of understands the internal combustion engine; no one understands the maze of rigged equations and blind deals our economy is. no one. the guy running the federal reserve didn't have a clue.

    that kind of matters.

    then entire existence and value of money needs to be rethought and remade in a much more equitable manner. but that's commie talk, and we can't have none of that, except in europe, and even then...

    sigh. i need to go ride bikes with my son, that'll be much nicer.

    Parent

    What happens to young homeowners (5.00 / 2) (#4)
    by Untold Story on Fri Aug 06, 2010 at 11:55:08 AM EST
    not connected to F & F, where one has lost a job, but they are still 'managing' to meet mortgage payments?  Seems unfair and may well lose votes come November, if that is the important issue.

    I would be (none / 0) (#85)
    by NYShooter on Fri Aug 06, 2010 at 05:15:10 PM EST
    very surprised if they didn't do something for everyone.

    I mean, they're not that stupid, and who knows, maybe even some Republicans who get some sort of largesse from Uncle Sam might think, privately, hey, this cat ain't too bad after all.

    Parent

    If they are barely managing (none / 0) (#116)
    by ruffian on Sat Aug 07, 2010 at 10:08:21 AM EST
    They should stop managing, and look into using the programs already in place, such as HAMP.

    Parent
    I don't believe this will happen (5.00 / 3) (#5)
    by Romberry on Fri Aug 06, 2010 at 11:56:01 AM EST
    Not only do I not believe it will happen, I don't think the president has the authority to order it, and if he did order it and it was lawful, the result would be a massive transfer of taxpayer funds from taxpayers who are either renters or homeowners in paid for homes or in homes that are not underwater to people who are under water. Not only would that not be a good move politically, it would be political suicide.

    Fannie and Freddie became a dumping ground for toxic waste. It was a backdoor bailout of the banks. If the plan you are talking about here, it would be shoving that toxic waste up our backdoors. No thanks.

    Calculated Risk says this is a nonsense rumour. I hope that CR is right.

    Cramdown in bankruptcy I can support. This cockamamie idea? No. Just...no.

    Investors need to take the hit (5.00 / 3) (#11)
    by waldenpond on Fri Aug 06, 2010 at 12:20:11 PM EST
    I agree with the cramdown through bankruptcy.  Make the bank and the investor take the hit, not the taxpayer.  This is a bad idea/rumor.

    Parent
    Everyone should get a cramdown (none / 0) (#13)
    by Militarytracy on Fri Aug 06, 2010 at 12:22:28 PM EST


    Parent
    Couldn't disagree more (3.67 / 3) (#16)
    by waldenpond on Fri Aug 06, 2010 at 12:39:26 PM EST
    The system needs the help.  Many homeowners are facing a new reality of permanent lower wages.  It is inefficient to kick people out of homes, let them deteriorate, sell them at the lower rate, wait years for credit recovery and then re-enter the market.... not to mention the permanent damage to economic growth from such a drawn out policy.

    I don't need a cramdown.  I don't want one.  I want the middle class tax cuts to expire.

    Parent

    You want the middle class tax cuts to expire? (5.00 / 1) (#19)
    by Militarytracy on Fri Aug 06, 2010 at 12:50:35 PM EST


    Parent
    Jobs, jobs, jobs (5.00 / 1) (#23)
    by waldenpond on Fri Aug 06, 2010 at 12:57:40 PM EST
    Yes, I do.  I think the tax cuts are the least stimulative part of the recovery bill.  Every dime of tax cut has gone into the bank in our family, signed the back of the checks and deposited them and changed the amount directed to savings from paycheck.  My parents, my daughter and her family, our family... we are all savers.  

    I want my tax cut to expire and I want my money taken from me and I want the govt to do direct job creation.  I want my neighbors to have jobs and I want to pay for it.

    Parent

    You could just write a check to the treasury (5.00 / 1) (#26)
    by sarcastic unnamed one on Fri Aug 06, 2010 at 01:05:48 PM EST
    or to your neighbors directly...

    That aside, how will higner taxes on the middle class create jobs?

    Parent

    Then do it (5.00 / 1) (#52)
    by me only on Fri Aug 06, 2010 at 02:47:18 PM EST
    there is nothing preventing you from sending money to the IRS or your favorite charity.  You don't have to take any deductions on taxes.  

    Parent
    Typical Republican response (5.00 / 1) (#59)
    by waldenpond on Fri Aug 06, 2010 at 03:11:48 PM EST
    More Republican magical thinking.... keep govt out of it, rely on charity for the needy.  Oh goody.

    Republican plan.... go hit the food bank.

    Parent

    Typical Progressive (none / 0) (#115)
    by me only on Sat Aug 07, 2010 at 10:06:13 AM EST
    lie.  I say I want to give my money, but what I really mean is that I want to the government to take other people's money.

    Parent
    Whatnot means is I want everyone to (5.00 / 1) (#118)
    by ruffian on Sat Aug 07, 2010 at 10:13:03 AM EST
    pay a little more so for the overall benefit of the community. My taxes pay for things I don't like, yours pay for things you don't like. it all evens out.

    Parent
    But realistically, that is not an available option (none / 0) (#28)
    by steviez314 on Fri Aug 06, 2010 at 01:08:17 PM EST
    If they let ALL the tax cuts expire, it's only because enough deficit Blue Dogs teamed up with Republicans--so there is no chance that that money would go to direct job creation.

    The better plan would be to keep the middle class tax cuts.  Let the upper tax cuts expire, and use that money to cut payroll taxes for new hires.

    Parent

    A person after my own heart. (none / 0) (#127)
    by sj on Sat Aug 07, 2010 at 12:01:47 PM EST


    Parent
    I do NOT want them to expire! (none / 0) (#139)
    by BrassTacks on Sat Aug 07, 2010 at 08:57:29 PM EST
    My dh finally has a job again, but we're barely making it since we have to support our grown sons and one of their families.  We cannot afford to pay more in taxes.  We really cannot.  

    Parent
    Un-American (4.00 / 1) (#27)
    by waldenpond on Fri Aug 06, 2010 at 01:07:11 PM EST
    You give me a 1 because I'm not greedy and won't take a bailout.  How un-American of me!  ha! ha!

    Doesn't anyone on this site have someone that desperately needs a job?  Anyone?  I am happy to give my money so your loved one can have a job.

    Parent

    Fugetaboutit :) Said your peace/peice (none / 0) (#29)
    by squeaky on Fri Aug 06, 2010 at 01:12:31 PM EST
    I heard you.  Food for thought.
    You'll be here all night trying to comprehend how much and how badly and on which levels of the inferno you suck in [Militarytracy's] mind.  In the grand scheme of a real life....not that important :)

    lol

    Parent

    You probably already know (none / 0) (#91)
    by Untold Story on Fri Aug 06, 2010 at 06:00:06 PM EST
    but the Vatican owns loads of shares in many US major banks, such as JP Morgan, Case, Citibank, can't remember the rest, think Melon is in there.  It also is third in gold holdings, after the US and then Germany.  Even more gold holdings than the International Monetary Fund.  So, when talk about too big to fail, what is actually meant?  

    Parent
    Dean Baker--Banksters real beneficiaries; taxpayer (5.00 / 5) (#8)
    by jawbone on Fri Aug 06, 2010 at 12:13:10 PM EST
    will bear cost of Fannie and Freddie buying mortgages at face or close to face value from banks holding mortgages on their books to avoid becoming insolvent. Taxpayers will have to make up the loss to the F&F.

    Beware this administration bearing gifts to the little people: There tends to be profit for the Banksters and Wall Street buried within -- and those losses get socialized to the people.

    Read all the comments to this post.

    Yes, some homeowners may benefit, but at what cost? And Banksters go merrily on with their casino winnings.

    This should not happen! (5.00 / 2) (#10)
    by Militarytracy on Fri Aug 06, 2010 at 12:19:07 PM EST
    If Fannie and Freddie pay more than what the house is worth I cannot sign up for this.  This is nothing but more bank bailout and the banks did this.  The banks made these loans in order to create derrivatives, they made loans to anyone for anything.  I will not bail them out more than I already have.  They are either solvent and can withstand their own defaults or they need to be taken over.

    Parent
    It cannot be emphasized strongly enough (5.00 / 7) (#15)
    by Anne on Fri Aug 06, 2010 at 12:33:27 PM EST
    that this is a Trojan Horse of pretty significant proportions, and should not - NOT - be taken at face value.

    If there is one thing people should keep in mind, it is that this is an administration that governs by optics and infomercials, and very little of what they show us, or tell us, is ever as advertised.

    When this administration says, "we want to help you," it usually means that the only way they could figure out how to give another big payday to the savvy businessmen without anyone noticing is to throw us a well-chewed bone as a distraction.
     

    Parent

    Anne, you are so right (5.00 / 1) (#46)
    by Untold Story on Fri Aug 06, 2010 at 02:29:58 PM EST
    (love all your posts!)

    Yes, this, imo, is all about those toxic assets the banks have to try get rid of - the carefully hidden future values of toxic assets, called derivatives.  Even Buffet called derivatives as 'financial weapons of mass destruction'.

    US's unfunded liabilities are larger than the entire global economy - but Wall Street banking derivatives are 20 times larger than the entire global economy!

    Yet, they remain unregulated, totally lacking in transparency, and we know about them only as much as the bankers want to tell us!

    The entire $10T bail out was to settle the derivatives of Lehman Brothers - only that amount couldn't even bail them out.

    Before more Wall Street bankers went bankrupt they got to change the rules of accounting - the most radical in history, so as to 'hide' these toxic assets under some more layers of magic.  It is estimated the actual amount of the derivatives is some $4 quadrillion.  

    These toxic assets still exist and are steadily increasing.  Obama may be faced with another financial crises or try this Trojan Horse approach.

    There is no part of this for Main Street, it is another necessary deed for Wall Street bankers in order to keep the US economy from collasping.

    Parent

    What if it helps (none / 0) (#53)
    by christinep on Fri Aug 06, 2010 at 02:50:36 PM EST
    the thousands of homeowners as well as the banks? Does our desire to see the banks take a (much deserved) hit overpower our concern to help out many of our neighbors? While I know that framing the question that way could be decried by some, nonetheless it is as fair a question/statement as any other I've observed on this issue. I think that anger at the mess we have been in economically for years has started to mess up our finding measures of relief in the interim.

    Parent
    How do you imagine this can (5.00 / 2) (#57)
    by Untold Story on Fri Aug 06, 2010 at 03:07:48 PM EST
    directly, or indirectly, help one's neighbor - unless the neighbor is a top flight of the Wall Street banking group, or the Washington so-called banking regulators?  Or, perhaps a Wall Street banking lobbyist - then the odds are it could reach them!

    This money would never go toward one's neighbor - never has and never will - far too many greedy hands on it before it would ever get there.

    The Pentagon is losing billions, no one bats an eye, just another few billion missing in Washington, its okay as it was given in an effort to help our neighbors of the world, such as Iraq.  Pity it never got there, but it is all in the intent really isn't it :(  

    Please - over and done with all that nonsense.

    Parent

    Well said Untold... (5.00 / 1) (#60)
    by kdog on Fri Aug 06, 2010 at 03:15:19 PM EST
    how many times we gonna get conned?

    If we really wanna help an underwater neighbor... we should picket the bank that holds their debt, take up a collection for them, or I think the best thing to do would be to form a human chain around the house when the sheriff comes to evict.  AKA grow a pair and start putting up a fight against those who would rape our nation for a quick buck...both private and public sector.

    Parent

    K-dog (none / 0) (#65)
    by Untold Story on Fri Aug 06, 2010 at 03:34:55 PM EST
    We would probably get shot and then have to pay for hospital charges!  

    Parent
    I never said it would be easy! :) (none / 0) (#66)
    by kdog on Fri Aug 06, 2010 at 03:41:21 PM EST
    Though the co-conspirators in Washington would love us to think it's as easy as giving them the ok on another trillion to "help underwater homeowners"...which is newspeak for "Reverse Robin Hood, Act XXXIV".

    Parent
    Wish we could vote personally (none / 0) (#70)
    by Untold Story on Fri Aug 06, 2010 at 04:07:30 PM EST
    for all this stuff as our so-called 'representatives' have forgotten all about us and when in Washington, it becomes all about them and how better to line their pockets.

    Sorry kdog - for my post K-dog.  

    Parent

    I'm upset (none / 0) (#61)
    by christinep on Fri Aug 06, 2010 at 03:15:37 PM EST
    with the wrongs of the world too. I don't disagree with a lot of what you say. But, it "helps" if <by required restructuring, etc. of the loan in the numerous so-called underwater situations> many individuals/families can remain in their home. My understanding is that that is the goal. The "fact" that others may be theoretically or really unjustly enriched is a separate issue for me. At this point in the state of the economy, I believe that we need to help those human beings that need help first.

    Parent
    You seem to be a kind person (none / 0) (#63)
    by Untold Story on Fri Aug 06, 2010 at 03:32:17 PM EST
    and resonable person.

    What did the banks do with 'our' bail-out money?  Did they make loans more accessible - No, not at all, as a matter of fact they tightened their position on loans, as in freezing up all loans!

    Why can't banks, all on their big own, replace purchase home value to the present market value on the homes in question?  Afterall, even if they repossess the homes they can only get the market value for the home.

    Cut back interest rates - all, again, on their big little own, to correspond with what they actually pay for their money, prime rate.  

    (Well, that's only for the money they do have to borrow, otherwise they are free and clear to hold our money for up to ten days or so, electronic funds going through their very own banking system, allowing them the benefit of billions of 'free' money each and every day.)


    Parent

    Well, if they run this alleged program (5.00 / 4) (#67)
    by Anne on Fri Aug 06, 2010 at 03:45:16 PM EST
    as well as they've run HAMP, the chances that people will see the kind of help they really need are somewhere between slim and none.

    You remember HAMP, don't you?  That was funded in part with some $25 billion (of the total $75 billion) by...Fannie and Freddie.  HAMP is the "sister" program mentioned in the piece BTD cited - and one ugly sister it is.  Take a gander at the HuffPo article about it: Extend and Pretend, for a taste of how much "help" has been provided.

    It isn't my desire to see the banks take a hit, as much as it is my desire that they not continue to be rewarded for their greed and their role in creating this financial mess, by being allowed to siphon off even more unconscionable amounts of money in exchange for doing very little.

    Anger isn't the problem: greed is. Greed is what is getting in the way of everything from affordable and accessible health care to real financial regulation to unemployment and the social safety net.

    Greed.

    Parent

    Anne, you are so right! (none / 0) (#76)
    by Untold Story on Fri Aug 06, 2010 at 04:34:55 PM EST
    Greed - in order to make the million dollar bonuses.  

    They gamble with values, some to go up and some down, without any regulation, transparency, or consequences.  

    They gambled on home values increasing, on wages increasing - a gamble they continue to play and are allowed to play in many other areas even today.  More bubbles are set to burst because Wall Street bankers are allowed to continue these practices, putting the nation at risk, for the sole purpose of increasing their personal year-end bonus.

    IMO

    Parent

    Of course taxpayers will pay (none / 0) (#140)
    by BrassTacks on Sat Aug 07, 2010 at 09:01:31 PM EST
    Where else would the government get the money to bail out all these people's mortgages?  One more reason to think we're all going to get tax increases.  

    Parent
    If this is only provided to those (5.00 / 1) (#9)
    by Militarytracy on Fri Aug 06, 2010 at 12:16:44 PM EST
    who are in trouble, it will be sold as penalizing "careful" people by the GOP and allowing those who overspent to be rewarded. And the GOP will slaughter him with that because many of us were very careful while others thought the sky was the limit.

    Absolutely! (none / 0) (#14)
    by Untold Story on Fri Aug 06, 2010 at 12:31:12 PM EST
    Many of those underwater, so to speak, are multiple home owners caught up in the 'fixin-up' scams.

    Certainly hope Obama doesn't entertain this measure.

    Parent

    The moral judgement of the housing (5.00 / 1) (#33)
    by Slado on Fri Aug 06, 2010 at 01:24:17 PM EST
    bubble is not on the borrower.

    It is on the lender that lent the money and the government that stepped in later to bail them out.

    Parent

    and the people who claim (5.00 / 1) (#34)
    by jondee on Fri Aug 06, 2010 at 01:32:17 PM EST
    "money is speech", who greased the government to deregulate and who bet on those loans going South and then cleaned up..

    Parent
    If you have not read "The Big Short" (5.00 / 2) (#30)
    by Slado on Fri Aug 06, 2010 at 01:20:52 PM EST
    You need to.

    The home crisis was not as a result of bad home buyers.   They played their part but the real criminals where the big banks that sold bad debt, then collected that debt into bonds, then sold bets against those bonds to investors, themselves and other banks.  

    This pyramid of bad debt was only made possible by the ridiculous policies of Clinton and GW.  It goes back farther but it was bi-partisan either way.

    The banks ran up a huge debit that could not be justified, homeowners stupidly jumped on the bandwagon of the never declining home price (myself included) and 2000 housing bubble ensued.

    That our government stepped in to guarantee the fraud perpetrated on us by the big banks and their cronies on Wall Street is the single greatest theft in World History.

    For this Administration to now double down on this is not only bad policy but terrible politics.  TARP is as big an albatross as the stimulus and if Obama tries it he'll be hammered worse in November and 2012 then he already will be.

    About homeowner (none / 0) (#58)
    by christinep on Fri Aug 06, 2010 at 03:07:49 PM EST
    Perhaps, they did "stupidly jump on the bandwagon" OR perhaps many followed the supposed leadership of the supposed economic pooh-bahs such as Mr. Greenspan. Recall Greenspan publicly stating (during the bubble--the one he professed not to see) that he would avail himself of some of the "innovative" financing to purchase a home if he were a young person again.
    Even tho we have lived in the same place for 35 years--own without mortgage, etc.--I do not believe it is right for me to think that I was smarter or more prudent than others. Just lucky! Think about those days at the beginning of the cenutry when the economic, political, social, news messaging push was to buy. It wasn't just for greedy people, but to the many young people (and, some not so young) who wanted to own a home.
    Anybody can find him/herself in danger of drowning...in known as well as unknown waters. I'm an excellent swimmer (still swim multiple times per week); and yet, I almost drowned once when an unusual current took down others. By luck, I was rescued.

    Parent
    Good point (5.00 / 1) (#107)
    by Slado on Sat Aug 07, 2010 at 08:31:52 AM EST
    Stupidly is a strong word.  Maybe predictably foolish?

    Either way as I say the burden was not on the home buyer but instead the lender.   The lenders, the mortgage brokers, the closing attorney's everyone in the industry was just looking for a body to loan money too so they could make money.

    An attorney friend of mine related a story to me just yesterday.  He filled in for a fellow attorney when he was doing closings in 2005 during the heart of the boom.   His buddy had so many closings to go to he couldn't even keep up with them.   So my friend sat in when a man who was obviously fresh of a construction worksite, if he had to guess maybe made $50K a year and was still sweating from his days work sat down to sign on to a $750K loan.   My friend was trying not to judge him but it seemed obvious to him that this man had no business taking a 2 year no intrest loan out on a $750K home.   None of the other people seemed bothered in the least.     Why should they?   They just had to sign a few papers, make some quick cash and the debt was passed on to somebody that wasn't even in the room.   Why wouldn't you do it?

    A system was put in motion by our government and the big banks that the average person would in almost every circumstance take advantage of.

    Peter Schiff compares it to teenagers and alcohol.  Parents that don't discourage their children from drinking and even provide the alcohol shouldn't be surprised when these same children get drunk.  Sure the kids should know better but the burden of judgement is on the parents.

    The system was set up for abuse and greed and we all acted surprised when that greed brought the system down.

    What is the response now of our government?  To deny their involvement and keep propping up a system that should be allowed to fall apart.

    Parent

    Good point (5.00 / 1) (#108)
    by Slado on Sat Aug 07, 2010 at 08:32:08 AM EST
    Stupidly is a strong word.  Maybe predictably foolish?

    Either way as I say the burden was not on the home buyer but instead the lender.   The lenders, the mortgage brokers, the closing attorney's everyone in the industry was just looking for a body to loan money too so they could make money.

    An attorney friend of mine related a story to me just yesterday.  He filled in for a fellow attorney when he was doing closings in 2005 during the heart of the boom.   His buddy had so many closings to go to he couldn't even keep up with them.   So my friend sat in when a man who was obviously fresh of a construction worksite, if he had to guess maybe made $50K a year and was still sweating from his days work sat down to sign on to a $750K loan.   My friend was trying not to judge him but it seemed obvious to him that this man had no business taking a 2 year no intrest loan out on a $750K home.   None of the other people seemed bothered in the least.     Why should they?   They just had to sign a few papers, make some quick cash and the debt was passed on to somebody that wasn't even in the room.   Why wouldn't you do it?

    A system was put in motion by our government and the big banks that the average person would in almost every circumstance take advantage of.

    Peter Schiff compares it to teenagers and alcohol.  Parents that don't discourage their children from drinking and even provide the alcohol shouldn't be surprised when these same children get drunk.  Sure the kids should know better but the burden of judgement is on the parents.

    The system was set up for abuse and greed and we all acted surprised when that greed brought the system down.

    What is the response now of our government?  To deny their involvement and keep propping up a system that should be allowed to fall apart.

    Parent

    I'm underwater on my (5.00 / 1) (#36)
    by Wile ECoyote on Fri Aug 06, 2010 at 01:41:19 PM EST
    car.  How about some love.  

    No protest from me (none / 0) (#40)
    by Big Tent Democrat on Fri Aug 06, 2010 at 01:56:19 PM EST


    Parent
    Good How about covering me for my bad choice (none / 0) (#41)
    by Wile ECoyote on Fri Aug 06, 2010 at 02:00:15 PM EST
    of Laptop purchase?

    Parent
    Tell me more (none / 0) (#43)
    by Big Tent Democrat on Fri Aug 06, 2010 at 02:07:09 PM EST
    Would it spur you to spend more?

    Parent
    I am looking for someone to pay for the past (5.00 / 1) (#68)
    by Wile ECoyote on Fri Aug 06, 2010 at 03:46:50 PM EST
    twenty years of bad fiscal decisions.  Including the meals I paid for at bad restaurants, and clothes purchased in haste.  

    Parent
    "...and clothes purchased in haste" (5.00 / 3) (#78)
    by shoephone on Fri Aug 06, 2010 at 04:43:06 PM EST
    You don't deserve a bailout for that, but you probably need better fashion advice.

    Parent
    I see you did not answer my question (none / 0) (#69)
    by Big Tent Democrat on Fri Aug 06, 2010 at 03:51:09 PM EST
    I can see why.

    Parent
    No it would cause me to spend more (5.00 / 1) (#121)
    by Wile ECoyote on Sat Aug 07, 2010 at 11:25:57 AM EST
    since I would be financing it with my tax money.  

    Parent
    To those who are upset about this (5.00 / 4) (#38)
    by Democratic Cat on Fri Aug 06, 2010 at 01:44:46 PM EST
    Because they think this rewards bad behavior, think of it this way: You live in a rowhouse, connected to the next-door neighbor with a common wall. Your inconsiderate neighbor smokes in bed, falls asleep, and sets his house on fire. Now your house is in danger and you are standing there with a garden hose. Suppose water is really expensive. Would you refuse to put out the fire?

    We are all interconnected with each other economically. The value of my home and my ability to have a job and to support myself are threatened when the economy is as terrible as it is now.  This plan seems likely to help not only my neighbor, but me too because of all the economic connections among us. I didn't smoke in bed, but I'm in favor of turning on the hose--not only to help my neighbor but to help me too.

    And in any case, many of those neighbors weren't smoking in bed, they were suckered into leaving their window open and Countrywide and others lit a match and tossed it in.

    It's true that you can't tell the reckless homeowners from the merely feckless, but we have to face the fact that in order to help anyone at all, some people will get some things that maybe they don't deserve.

    Think of it this way (5.00 / 1) (#109)
    by Slado on Sat Aug 07, 2010 at 08:35:16 AM EST
    Sometimes the losers have to lose.

    For the greater good some people have to win and some have to lose.

    Some of the winners won't deserve it and some of the losers won't deserve it.

    But no system is sustainable when nobody is allowed to lose.

    In that system, we all lose.

    Parent

    Well, the "losers" who engineered this (5.00 / 3) (#111)
    by Anne on Sat Aug 07, 2010 at 09:20:29 AM EST
    financial crisis, the banksters who dreamed up more products with even higher risk, the ones who went after potential homeowners with liar's loans - they weren't allowed to lose, were they?  No...they were too big to be allowed to fail.

    But those who got caught up in the mess, whether they were recipients of loans on over-valued property, had retirement funds invested by fund managers in questionable financial products, lost jobs because of the severe dip in the economy - these people were the ones allowed to lose.  

    We don't, apparently, have a system where winners and losers sort themselves out with no interference; we have a system where those with the power are deciding who wins and who loses - and so far, on issue after issue, when it comes to deciding which would be worse, for business to lose or the people, it's the people who keep coming down on the losing side.  

    And as far as I can tell, that's not being done to make the system more sustainable and "fair" for everyone, it's to make sure that those with the most get to keep the most, and improve their chances of getting more.  And this is possible because, as usual, those with the most have all the power.

    What I expect government to do, to some extent, is to level the playing field - not by giving things to people, necessarily, but by putting policies and regulations and laws into place that create more of a balance of power between the haves and the have-nots.

    As for this potential plan for forgivness of debt, that's just pandering for votes at a time when approval ratings are in the toilet - and that's about them - not about the people that would allegedly be "helped."

    Parent

    You need to run for office! (none / 0) (#117)
    by Untold Story on Sat Aug 07, 2010 at 10:08:44 AM EST
    New life, new blood in Washington where regulations can be put in place so this financial crisis never happens again!  

    Term limits have got to become a reality - these old crooks are embedded in self-interest up and beyond their eyebrows!  

    Parent

    Cut a break on student loans (5.00 / 4) (#50)
    by Cream City on Fri Aug 06, 2010 at 02:43:52 PM EST
    and watch the 20-somethings and 30-somethings be able to buy homes.  (And cars and more.)

    Wouldn't that have a similarly salutary impact for the banks so beloved by the administration?  Bring back the housing market, the construction industry, the retailers counting on those consumers, etc.?

    It also would help those of us, their parents, who are trying to help the progeny.  We might be able to retire sooner, after all, thus freeing up jobs. . . .

    Sign me up (5.00 / 2) (#56)
    by Big Tent Democrat on Fri Aug 06, 2010 at 02:55:08 PM EST


    Parent
    You can sign up and in (none / 0) (#110)
    by Slado on Sat Aug 07, 2010 at 08:37:28 AM EST
    10 years we'll be right back where we are today.

    The housing market was fake.  It was inflated by the easy access to money.

    If we don't let it reset itself we will be stuck in limbo for decades.

    It sucks, it's not fair but life isn't fair.   Trying to re-inflate a bubble with cheap money won't help anyone.   The bubble will simply re-pop and we'll be worse off then when we started.

    Parent

    Common sense... (5.00 / 1) (#122)
    by kdog on Sat Aug 07, 2010 at 11:28:38 AM EST
    tells me the same...like a compulsive gambler borrowing from the shies to "double or nothin'"...you're only delaying and worsening your problems.

    Parent
    The devil is in the details, (5.00 / 3) (#92)
    by caseyOR on Fri Aug 06, 2010 at 06:17:40 PM EST
    as always. If, and that is a big if, the administration is really thinking of a program like this, what matters are the rules.

     Like who qualifies? Remember, a lot of the people who over-bought or got liar loans, etc., have already lost their homes in foreclosures or short sales. This won't help them. The people in trouble now are more often than not in trouble because of unemployment or underemployment. They would love to re-finance, but the bank won't deal because these homeowners no longer have the income to meet the bank's refinancing requirements.

     Restrict this to the primary residence, no vacation homes or rental properties or investment properties. People stay in their homes; the neighborhood stays viable. What is so bad about that?

    And, if you still think that is a big old bailout,(I don't see it that way) then for god's sake let's at least allow bankruptcy cramdown for the primary residence.

    What social and economic good is served by throwing even more people out of their homes?

    We cannot go on the way we are.

    Yeah, there are not enough details (none / 0) (#94)
    by ruffian on Fri Aug 06, 2010 at 06:52:15 PM EST
    in this rumor to see exactly how it would work. But something like this is absolutely necessary to fix the economy.  As I've said before, no one that is 100 k underwater on their home, no matter how they got there, is going to spend any extra money.

    In fact it is just the last shred of their pride that is keeping them from doing the financially wise thing, and walking away from their houses. If the moral hazard chorus would rather see that happen in droves, go ahead and prevent the gov from pressing the big reset button.

    I hope this is structured so that the banks take the hit, as in a cram down, and not taxpayers. Even the banks splitting the difference wiith the homeowner would help a lot. Something has to be done to make staying in the home a financially sound decision.  

    Parent

    I wonder of some people are confusing (5.00 / 2) (#99)
    by sarcastic unnamed one on Fri Aug 06, 2010 at 08:55:59 PM EST
    being "upside down/underwater" with not being able to make your monthly payments?

    Being upside down/underwater on your mortgage has nothing to do with whether you can afford to pay the mortgage or not.

    The monthly mortgage payment amounts have nothing to do with the value of the home, regardless of how it fluctuates.

    The home could be worth - now - absolutely nothing, but if you can afford the mortgage of the loan you took out to buy that house, well, you can afford the mortgage...

    Wanna be banksters (none / 0) (#101)
    by waldenpond on Fri Aug 06, 2010 at 10:01:02 PM EST
    Nope, people don't misunderstand the issue.  They see someone else getting something (nothing but relief from misery) and they want what they perceive to be their piece of the pie.  They are thinking about the banksters and what they do to justify jumping on board.

    Parent
    Okaaaay.... (none / 0) (#103)
    by sarcastic unnamed one on Fri Aug 06, 2010 at 10:48:42 PM EST


    Parent
    Okaaaay.... (none / 0) (#104)
    by sarcastic unnamed one on Fri Aug 06, 2010 at 10:48:56 PM EST


    Parent
    Yes that is true (none / 0) (#112)
    by ruffian on Sat Aug 07, 2010 at 09:55:56 AM EST
    They are two different issues. I'm an example of someone way underwater, but can afford my mortgage. I did jot buy more house than i can afford, just had horrible timing in when i moved to central FL, the epicenter of underwater mortgages. The effect on the economy is that I am saving more to protect against the day that I have to sell the house and will owe the bank about 100k.  With double digit effective unemployment, the economy needs me, and many other of the employed underwater, to be spending our money.

    Also, for my personal finances, if i get transferred out of state for work soon, which is highly likely, the sensible thing would be to let the bank have the house. And in fact it may be necessary, since i am not going to have the ready cash to pay them off. That is a perfectly legal option that the bank agreed to when they loaned me money on this real estate - they were as dumb as I was in not seeing the bubble.

    Now, if the bank splits the difference with me, I would have more incentive to keep the house.  

    Parent

    By the way, savings rates are way up (none / 0) (#113)
    by ruffian on Sat Aug 07, 2010 at 09:59:53 AM EST
    this year, for precisely the reason I described. At 1pct interest, whom does that benefit? Why, the banks of course.

    Parent
    Tsongas was wrong. (5.00 / 1) (#102)
    by diogenes on Fri Aug 06, 2010 at 10:05:55 PM EST
    If this happens, then the biggest pander bear in the world will be Barack Obama, not Bill Clinton.
    Eight hundred billion is two thousand seven hundred dollars PER PERSON.  You could stimulate the economy a lot more by giving every family of four ten thousand dollars.
    Are the Chinese going to forgive us our ever-increasing debt?

    Please, please, please (none / 0) (#105)
    by BrassTacks on Fri Aug 06, 2010 at 11:03:15 PM EST
    Let Obama do that!  Give EVERY family $10,000!  Every family in America could use and spend that money.  That would definitely JUMP START the economy!  

    Parent
    And even add an incentive (5.00 / 1) (#114)
    by ruffian on Sat Aug 07, 2010 at 10:02:54 AM EST
    such that if you use it to put towards your mortgage, the bank will match it in reduced principle.

    Really, we know what needs to be done to fix the economy. But no one wants to help the regular people. i cannot understand that attitude at all.

    Parent

    Regular people... (none / 0) (#123)
    by kdog on Sat Aug 07, 2010 at 11:39:52 AM EST
    I'm not convinced it will help regular people.  I just can't buy trickle-down anymore...it never does, and this scheme won't either...it will help the banks or it won't fly at all.

    I don't think our economic system's design allows for so much home ownership...anybody think of that?  There aren't enough good jobs, even before the meltdown.  The whole she-bang is made of tissue paper...all the helping hands in the world won't change that.

    Parent

    Just emailed my old college roomate (none / 0) (#7)
    by sarcastic unnamed one on Fri Aug 06, 2010 at 12:07:27 PM EST
    who has been a big cheese re: both Fannie and Freddie for the past half-decade or so to see if there is any truth to the rumor. I don't suppose it's likely that he'll be able to give me a straight answer, at least not now, and not by email, but we'll see...

    He's says the rumor is just that - a rumor. (none / 0) (#125)
    by sarcastic unnamed one on Sat Aug 07, 2010 at 11:53:29 AM EST
    Highly unlikely to ever happen.

    Parent
    I.M.O. (none / 0) (#32)
    by NYShooter on Fri Aug 06, 2010 at 01:23:01 PM EST
    there's only one thing that will wash away the stench that this crisis has left behind:

    Indictments, trials, perp walks,.....jail time; big time! (sorry kdog)

    "They" dreamed it up, "They" carried it out, "They" stole it, and "They" should give it back.

    Hundreds went to jail in the Ronnie's, deregulated, S & L con job of the 80's. And that was just a tiny fraction of this rape.

    Shackle them all together:
    Blankfein, Dimon, Mack, Thain, O'Neal, Greenberg,

    make a portrait, and hang it in every bank lobby in America.

    Meet you half way... (none / 0) (#37)
    by kdog on Fri Aug 06, 2010 at 01:43:10 PM EST
    seize every ill-gotten cent, but leave them their freedom.

    Parent
    Deal! (none / 0) (#82)
    by NYShooter on Fri Aug 06, 2010 at 05:09:00 PM EST
    can we flip a few boogers at'm while we're cleaning out their numbered Swiss accounts?

    Parent
    Sure... (none / 0) (#124)
    by kdog on Sat Aug 07, 2010 at 11:41:12 AM EST
    you can beat 'em with a whiffle ball bat...street justice is preferred to sullying the system any further.

    Parent
    Obama To Help Under Water Homeowners? | 140 comments (140 topical)

    Readers Must Login or Create an Account to Comment