Bush to outline plans to help homeowners
Proposals aimed at helping those with risky mortgages keep their homes

WASHINGTON - Offering federal help for strapped mortgage holders, President Bush is proposing to aid hundreds of thousands of borrowers hard hit by the housing slump.

The president on Friday was to talk about several initiatives and reforms to help homeowners with risky mortgages keep their homes, a senior administration official said Thursday. Bush also was to discuss efforts to prevent these kinds of problems from arising in the future.

http://www.msnbc.msn.com/id/20524454/


OK, so all these people that were either too stupid to understand their loan or too greedy to care about the consequences now get a bail out from our government? WTF! I could be in a house right now if I took out one of those scam loans, but I was smart enough to know it would bite me in the ass later and that I couldn't overstretch my budget that far. But all of these other people who bought 300K homes on 40K salaries get rewarded for their own stupidity or greed? This REALLY pisses me off. It's THEIR OWN damn fault that they are over their heads in debt and mortgage payments. They are the assholes that mortgaged their equity to buy Hummers and Jetskis. Now Bush is going to come to the rescue for these impulse driven ignoramuses?

Ughhh!

quote Originally posted by connecticutFIERO: ...... Now Bush is going to come to the rescue for these impulse driven ignoramuses? Ughhh!

well, I expect alot has to do with Bush is also a impulse driven ignoramus?
and - overall - who is really being helped? who is gonna actually end up with that money? me thinks a cronie. yes, a few idiots will get some repreive - but it wont last. but, a cronie will get a wheelbarrow load of $$$....

Conn,

Regardless of what happens, be happy that YOU know better and didn't fall in the trap. You're really better off that way.

As to the "bailout", unless you helped write the speech, you don't really know what's in it, now do you? I'm fairly certain the Feds aren't going to hand out buckets of money to people facing foreclosure. Some of the rumors I've read say that Bush is going to push to get through FHA reforms that have been debated for quite some time. He is also talking about easing some tax laws that some homeowners are facing that are going to result in a very large tax bite (aren't you for tax breaks for the little guy?). He's also supposedly going to push for vigorous enforcement of predatory lending practices which should have been happening all along.

To my mind, I'm not sure if this is a good thing or a bad thing. It's definitely interference from an outside source of a "true" marketplace and as you pointed out, it's kind of taking care of the stupid people that probably should learn from their own mistakes.

<shrug>

don't really know where I come down on this.

John Stricker

I think its a load of crap. They got themselves in the mess, they either get themeselves out, or their lender will throw them out. How many take on a car loan that they can't pay? I see no reason for the government to take money away from me and give it to people who obviously already have no money mangement skills. Ridiculous.

After my recent raise, I make 41k a year. After Child Support, I get roughly 18k of that a year. I qualified for a home loan 8 months ago for 470,000 dollars.

That was with child support reporting me delinquent (I owe some backpay from a few years ago.)

I walked away, quickly, and bought what I could afford. A mobile home. Not much, but it is a start.

You know I'm generally for helping "the little guy" out. But my philosophy is "teach a man to fish and he eats for life", whereas I see these types of bailouts "catch a man a fish and eats for a day".

From what I understand, Bush is telling the treasury to make low interest fixed rate loans available for these subprime borrowers in default or foreclosure proceedings. Now, if these people bought 300K homes on a 40K budget they won't have a snow balls chance in hell at making those mortgage payments on a true 30 year fixed rate loan. Plus they will certainly have to pay PMI insurance since there is no way they have 20% equity in their home. I worked hard all my life to achieve my good credit and I don't appreciate the government side stepping all of us responsible people's hard work and giving out low interest fixed rate loans to people who don't deserve them and who got themselves in trouble because of A. laziness, B. greed, or C. Bad Budgeting. I WANT these people to lose their homes. It's not like they'll be living on the street, they can go rent like the rest of us waiting for housing prices to come back down to reality.

Go outside any time of day and you'll see people making 35K a year driving around in a 65K Chevy Suburban on their way home to their 350K house. Do those people deserve to get what they want simply because they want it and took risky loans? Shouldn't they have to work for it like the rest of us?

We'll see what happens. The government created this mess when they removed regulations on lending practices, and they created this last bubble because of it. NOW they want regulation and oversight? Ughhh, spare me.

I know you're not arguing with me John, I'm just venting at the ubiquitous "THEY" we always hear about.

[This message has been edited by connecticutFIERO (edited 08-31-2007).]

So...
In the simplest terms, Here we have a bunch of people who had no business trying to buy a house. People who knew they couldn't afford it.
And then we have a bunch of lenders who also knew the buyers couldn't afford it, and knew that some of them would default, and lose their homes to said lender.
What the lenders didn't anticipate is that most of them would default, and that they would be stuck with a bunch of properties that they couldn't sell to anyone, due to the resulting crunch.

Sounds like poor, irresponsible planning on both sides of the situation.
I don't have a lot of sympathy for either side.

quote Originally posted by Raydar: So... In the simplest terms, Here we have a bunch of people who had no business trying to buy a house. People who knew they couldn't afford it. And then we have a bunch of lenders who also knew the buyers couldn't afford it, and knew that some of them would default, and lose their homes to said lender. What the lenders didn't anticipate is that most of them would default, and that they would be stuck with a bunch of properties that they couldn't sell to anyone, due to the resulting crunch. Sounds like poor, irresponsible planning on both sides of the situation. I don't have a lot of sympathy for either side.

yup - I think the side affect was all the purchasing that was done on credit cards, that was then shifted to euqity loans. so, there was the huge boom in purchasing. then, when this generation hit the wall - there was the sudden stop in purchasing. there is a good 5-10 year hole to fill now.

and - if there is going to be a "bailout" - I would expect there will have to be demands made of the people being "bailed". otherwise - just give back the old bankruptcy laws. at least with them old laws - everyone comes out with a little bruising. and, lastly - I dont want to see the lenders come out of this shining either. lending is risky business too - thats why we pay interest after all. if they are not going to assume their risk - I dont want to pay interest.

ayyepp!

quote Originally posted by connecticutFIERO: You know I'm generally for helping "the little guy" out. But my philosophy is "teach a man to fish and he eats for life", whereas I see these types of bailouts "catch a man a fish and eats for a day".

Oh, come ON, Conn. If Bush doesn't help, he's an uncaring bastard. If he does, he's failing to let them learn a hard lesson. Geez.

quote Originally posted by fierobear: Oh, come ON, Conn. If Bush doesn't help, he's an uncaring bastard. If he does, he's failing to let them learn a hard lesson. Geez.

That pretty much sums it up doesn't it,,,,,,,,,,,,, I do see Conn's point though, BUT I just can't think that if Bill C or Billary did it, it would be golden.
--

Can we say that unrestricted capitalism is bad and laws that keep companies from sucking stupid people are good?

Or are we going to stick our heads in the ground again?

quote Originally posted by connecticutFIERO: I know you're not arguing with me John, I'm just venting at the ubiquitous "THEY" we always hear about.

Conn,

Nope, not arguing. As I said, I'm really torn on this. I think I hear some jealousy coming out in your rant but to be honest, I don't blame you for it. You sat back when others were doing what you knew wasn't going to work for them long term and went "WTF???" and remained responsible in your budgeting, and now it looks like they're getting a bailout.

I'm not blaming you for feeling that way at all. I do think that you don't really mean that you want them to "lose their houses". What you really WANT is for them to be responsible and have to live in a responsible fashion. I wouldn't wish foreclosure on anyone, regardless of their irresponsibility. You also REALLY don't want the housing marke to collapse and prices to "come down", even though you might think you do. Think that one through. If it comes down now, why? Just so you can "buy in"? Then what? You want it to continue to climb at double digit rates because now you're in the game?

I don't believe that's really what you want. We may not agree politically on many things, Conn, but I don't think you really want bad things to fall on a lot of people so that you can personally gain. That would be out of character for you.

John Stricker

quote Originally posted by jstricker: He is also talking about easing some tax laws that some homeowners are facing that are going to result in a very large tax bite (aren't you for tax breaks for the little guy?). He's also supposedly going to push for vigorous enforcement of predatory lending practices which should have been happening all along.

We are not talking about tax breaks for the little guy. These people bought houses over their heads on speculation and now oh crap they can't afford them anymore.

Meanwhile "responsible" homeowners will see an increase in taxes because the people who bought into homes they couldn't afford get a tax break, let me rephrase that "easing of their taxes." This plan sucks, rewards incompetence and will encourange the problem, but doesn't suprise me.

“A key element of Bush’s plan would allow homeowners with good credit histories, but who cannot afford their mortgage payments, to refinance into mortgages insured by the Federal Housing Administration to keep from defaulting.” “Mortgage foreclosures and late payments are expected to worsen. Some 2 million adjustable rate mortgages are to reset to higher rates this year and next. Steep penalties for prepaying mortgages have added to some homeowners’ headaches”


So, it sounds like millions of borrowers (some that maybe should not have gotten a loan in first place) get a second chance, the lenders (that made the high-risk loan) get their money, and the taxpayers get to guarantee the new mortgage.

I’m sure this will help a lot of homeowners, but it sounds like a bailout for lenders and a bad deal for taxpayers. The government will be guaranteeing the payoff of high-risk loans made by private corporations. Lenders will be able to write new FHA-insured loans to collect on the risky first loan (and those "steep" prepayment penalties).

[This message has been edited by SC Coupe (edited 08-31-2007).]

quote Originally posted by Synthesis: After my recent raise, I make 41k a year. After Child Support, I get roughly 18k of that a year. I qualified for a home loan 8 months ago for 470,000 dollars. That was with child support reporting me delinquent (I owe some backpay from a few years ago.) I walked away, quickly, and bought what I could afford. A mobile home. Not much, but it is a start.

Um, I think you are stretching the truth a bit to much on this chris.. I make 6 figures and I qualify for a $500,000 home, which is what I live in. If you did qualify for this type of house. was yoru interest rate 14% with your high credit risk from child support and the short time you been on your job.

Why do you stretch the truth like this when its obvious you dont qualify and everyone sees thru your story..

quote Originally posted by yello86se: Um, I think you are stretching the truth a bit to much on this chris.. I make 6 figures and I qualify for a $500,000 home, which is what I live in. If you did qualify for this type of house. was yoru interest rate 14% with your high credit risk from child support and the short time you been on your job. Why do you stretch the truth like this when its obvious you dont qualify and everyone sees thru your story..

that is the problem - he obviously does not qualify - but, I am sure he has had the offers. I know I have. I know my daughter has. I am surprised my cats haven't tho. My cats have had credit cards.

What a collosally stupid idea - lets fix an fix a deflating housing bubble by re-inflating it! Things happen for a reason. The bursting of the so called housing bubble occurred because the current real estate market needed a correction. Many of these morons finding themselves in dire financial straits are there because of their own greed and ignorance. Speculators who came late to the party and thought they could turn a quick buck by gobbling up property, only to find out that there gamble has apparently not paid off. Why should the tax payer have to bail them out? Would these same individuals who find themselves in this current predicament have likely shared their profits with the tax payers had the tables been turned?

[This message has been edited by loafer87gt (edited 08-31-2007).]

quote Originally posted by loafer87gt: Why should the tax payer have to bail them out?

The taxpayers are guaranteeing a bailout of the lenders. The borrowers (the ones with good credit histories) get a chance to refinance and they'll still have mortgages, but the lenders won't be plagued by so many defaulting loans, thanks to this little act of "Corporate Welfare".

quote Originally posted by SC Coupe: “A key element of Bush’s plan would allow homeowners with good credit histories, but who cannot afford their mortgage payments, to refinance into mortgages insured by the Federal Housing Administration to keep from defaulting.” “Mortgage foreclosures and late payments are expected to worsen. Some 2 million adjustable rate mortgages are to reset to higher rates this year and next. Steep penalties for prepaying mortgages have added to some homeowners’ headaches” So, it sounds like millions of borrowers (some that maybe should not have gotten a loan in first place) get a second chance, the lenders (that made the high-risk loan) get their money, and the taxpayers get to guarantee the new mortgage. I’m sure this will help a lot of homeowners, but it sounds like a bailout for lenders and a bad deal for taxpayers. The government will be guaranteeing the payoff of high-risk loans made by private corporations. Lenders will be able to write new FHA-insured loans to collect on the risky first loan (and those "steep" prepayment penalties).

With my limited kowledge of this topic, I'd have to say that this is mostly about bailing out the "BIG" lenders and attempting to hold the housing market to some kind of stability. If the rest of the country is anything like Central Kentucky, the builders have overbuilt significantly and the only way these houses are going to be sold is with radical financing and reduced prices allowing people that really can't afford homes of this "value". IMO, this only extends out the ultimate and predictable result of lengthing and maybe softening the impact of the collaspe of the housing industry. I believe that anyone currently making a living building houses in this area had better have a back up plan.
I don't really support the government stepping in and bailing out the lender or the home owner. Our economy goes through cycles, we're due for a down trend. Could I be one of those that loses their homes? Anything is possible but when I recently purchased a new home and was offered a variable rate loan, I advised the loan officer as to where he could stick that loan. He agreed with me but said he had to offer it. All these troubled home owners had to do was stay within what they could afford and "they" would not be in this situation. I'm not as mixed in this as John, I see this as something that was predictable and was simply ignored. What's that old saying "Caveat Emptor"? I don't see it as the tax payers responsibility to bail the lenders or the borrowers out. Would I feel differently if I was one of those problem buyers, heck yes. Would I hop on any assistance the government offered? Heck yes. Do I think the government (taxpayer) owes me anything? Hell NO!

------------------
Ron

Never, never do anything that you don't want to have to explain to Paramedics, it can get very embarassing.

[This message has been edited by blackrams (edited 08-31-2007).]

.

[This message has been edited by JazzMan (edited 12-08-2008).]

quote Originally posted by yello86se: Um, I think you are stretching the truth a bit to much on this chris.. I make 6 figures and I qualify for a $500,000 home, which is what I live in. If you did qualify for this type of house. was yoru interest rate 14% with your high credit risk from child support and the short time you been on your job. Why do you stretch the truth like this when its obvious you dont qualify and everyone sees thru your story..

And you seem to have a massive issue with me as of late.

No, I qualified for 470,000 dollars when I went looking for a home loan. It was a very low interest loan. The truth is, according to the lender, I qualified. Now, keep in mind, this was not the most wellknown high integrity loan place.
But I was going through everything I could to find a place so I could get out of my former landlady's basement.

I did what I could do. I bought a mobile home.

yea, I have a problem with all the fake stories you bring up.. You are simply looking to either fit in or are a liar...


to many things you have said in the past few years have given you away... So fess up and quit lying..

And you sir, are an ass when you choose to be. Which lately, seems like a large part of the time. I have the paperwork here that I received in the mail after an initial query into mortgages. And I do not need to prove myself to you.

So, you can back the **** off.

Ok,

Well, you have told everyone in the past few years alot of funny stories,,, like you are a felon,, cheating on yoru wife, not paying child support for your own kids..
Begging for donations for yoru car,t, said you were homless and jobless. this was just last year...

Well, now you are making 41k , can get a 470k mortgage and more... Liar. not even BS..

I dotn have to back off, I am stating all the facts...you sir,, are a liar looking for sympathy or atteniton..

And you sir, need to pull your head out of your ass. In the last year, I have been working steadily. For 2 years now. Prior to that, BEFORE I fixed my life, I had issues.

A large portion of what you "quoted" about me is true. But your timelines are off. Pull your head out of your ass, go dig through some threads, and next time you feel like attacking me, do it in PM, not in public, or else you will look like the fool you are. I used to respect you, until now.

Back off, or you and I can take this outside, in real life.

Calculate what you can afford here http://realestate.msn.com/b...g/tools/HA_Calc.aspx
Here is an example using my numbers. I have an excellent credit rating and $200,000 for a downpayment. Using an interest rate of 6.5% and $2000 in monthly bills and my salary, the calculator says I can afford a $560,000 house. Plug your numbers in and I bet what you can afford will be a lot lower.
I actually will be looking at $400,000 or cheaper houses in Florida when I move. I don't need a $560,000 house, even if I can afford one. If someone told you you could afford a $470,000 house they lied to you. If you could get a 30 year loan at a 6.5% interest rate with no money down, your monthly payments would be around $2970.

Using an old calculator sheet my bank gave me when I first bought my home, I figure you can afford around a $147,000 at the 6.5% interest rate if you are making $50,000 a year. That has a monthly payment of around $1,167 and that is if you have enough money for at least a 5% downpayment.

[This message has been edited by avengador1 (edited 08-31-2007).]

Can I point out that through HUD we taxpayers already help people, who can't afford to buy homes, to buy homes. This is just an expansion of this concept.

Now as to whether I support it or not....different topic.

quote Originally posted by avengador1: Plug your numbers in and I bet what you can afford will be a lot lower. If someone told you you could afford a $470,000 house they lied to you. If you could get a 30 year loan at a 6.5% interest rate with no money down, your monthly payments would be around $2970.

That is exactly why I walked away... Because they said I could afford that much, and I know that 95-110,000 would be in my maximum range for a mortgage.

I don't think this is a full bail out. From what I understand is that if people foreclose on their homes and if the banks forgives the loan on it, the person who was foreclosed on will be hit for a tax bill for the capital gains of that forgiven loan. This relief package is designed to do away with the tax consequences of the foreclosed forgiven loans.

quote Originally posted by Synthesis: That is exactly why I walked away... Because they said I could afford that much, and I know that 95-110,000 would be in my maximum range for a mortgage.

Which was precisely my point, earlier.
They knew damn well you couldn't afford it (as did you.) They were willing to make that loan in order to own a piece of property, a few months or years down the road.
But you had enough sense to recognize it for the BS that it was, where thousands of other buyers tried to fool themselves into believing that if the lender told them they could afford it, that it had to be true. Even if it didn't make any sense.

BTW... I heard a sound bite of Bush's comments. He said that the government wasn't going to be in the business of bailing out speculators.

[This message has been edited by Raydar (edited 08-31-2007).]

quote Originally posted by JazzMan: Bush is just trying to buy votes, standard tactic. I say, let the speculators ride their bubble, hehehe... JazzMan

But he can't run again....

quote Originally posted by JazzMan: Bush is just trying to buy votes, standard tactic. I say, let the speculators ride their bubble, hehehe... JazzMan

Hmmm...Bush is criticized for not doing enough for New Orleans after Katrina. So he was wrong for not doing enough, but he would have been wrong for pandering for votes if he had done more?

quote Originally posted by Toddster: Can I point out that through HUD we taxpayers already help people, who can't afford to buy homes, to buy homes. This is just an expansion of this concept. Now as to whether I support it or not....different topic.

hey todd
I remember your telling me ARM rates were NOT going up
when you were hipeing them for your used house salesmans act
and I correctly said ARM's suck and will go UP and SOON
and said stay away from ARM's or get bit

------------------
Question wonder and be wierd
are you kind?

According to the evening news, the FHA-insured refinancing loans will only be available to about 80,000 homeowners (who still have good credit ratings). Seems to me that if you're in financial trouble because of your mortgage, you probably do not have a "good" credit rating.

I just hope these loans go to people who actually live in the mortgaged homes, not speculators or landlords.

quote Originally posted by SC Coupe: “A key element of Bush’s plan would allow homeowners with good credit histories, but who cannot afford their mortgage payments, to refinance into mortgages insured by the Federal Housing Administration to keep from defaulting.”

I do not refute this.

quote Originally posted by SC Coupe: The taxpayers are guaranteeing a bailout of the lenders.

I see this as more of a driving force.

quote Originally posted by blackrams: With my limited kowledge of this topic, I'd have to say that this is mostly about bailing out the "BIG" lenders and attempting to hold the housing market to some kind of stability.

My factual understanding right now is also lacking. I, like you, also do not favor the bail out. However, like John, I am unsure of how I should feel.
I understand that a key element helps first time homeowners with relative low income. People who thought they had achieved the American dream of home ownership. Now, I can not call the inexperienced irresponsible. I can see that they tried and maybe we should try to help them. They were most likely taken advantage of by big business. The big business of the housing industry should pay for this. They are taxpayers also. It is after all for their good.

[This message has been edited by cliffw (edited 09-01-2007).]

quote Originally posted by cliffw: The big business of the housing industry should pay for this. They are taxpayers also. It is after all for their good.

They will but, it will be through lack of sales, empty new houses sitting, not selling or selling at a greatly reduced price. Just as the auto industry suffers when the product offered is not what the buying public wants.

Unfortunately, what will happen is the big builders will cut back on "spec" houses and workers, the small builders will eventually be forced out of the industry by the lack of sales. It's the way things work. The market will "right" itself and attempt return to a more balanced seller to buyer ratio. Interest rates will flex both up and down as the borrowing market dictates. Many will lose their homes due to bad decisions but, when we make bad decisions, we eventually have to pay for those.

This will be a blow to the economy but, it is survivable.

------------------
Ron

Never, never do anything that you don't want to have to explain to Paramedics, it can get very embarassing.

[This message has been edited by blackrams (edited 09-01-2007).]

It's a ploy... much like John said, it wont really make a dent in the sub prime situation but it will quell stock / investor histeria and stabilize the markets.... Again it's just a ploy