Democratic Congress Passes Housing Bill-Bush drops veto threat - Page 3

Anikdote · #21 (**permalink**) 07-29-2008, 07:11 PM

Bailing out lenders... bailing out homeowners, six one way, half dozen the other.

Whaler17 · #22 (**permalink**) 07-29-2008, 07:14 PM

Quote:

Originally Posted by justabubba

privatize profits
socialize losses

those companies, which were making lots of money and paying their managers and stockholders massive premiums because of all those "good" mortgage loans they were making, are now tanking
likewise for the investment houses which were buying the securitized mortgages
but the boom went bust when reality set in, once it was apparent those who qualified for mortgage loans were not actually able to pay back what they borrowed
so we have lenders and investors holding mortgage paper on real estate, the value of which is very inadequate to cover the amount of the money they lent or invested
now, the homeowner is faced with a return to the rental market for housing, while the lender/investor is faced with recovering just a portion of the funds it placed at risk

congress is deciding the taxpayer is going to cover the costs so that those borrowers who allowed themselves to become financially overextended will now be able to borrow enough money to pay in full the present lender/investor and cover the losses they would otherwise incur

do not be fooled. this has nothing to do with helping the irresponsible home buyer and everything to do with covering the losses of the wealthy lending and investing institutions. the congress is now gearing up for the taxpayer to cover the losses that the lenders and investors were otherwise going to have to absorb, which losses are due only to greed and stupidity. providing another loan - this time federally backed - to people who obviously are not fiscally responsible, so that they will agree to pay a mortggage which exceeds the value of the home they are living in, is the eyewash being used to hide screw job the taxpayers are about to receive

mortgage holders took a risk
investors and lenders took a risk
we would not have shared in their profits. why will we taxpayers now have to pay for their losses?

EXCELLENT POINT!!!!
The Democrats pass a bill they think deserves praise, but it is actually just a corporate bailout of sorts!

justabubba · #23 (**permalink**) 07-29-2008, 10:41 PM

Quote:

Originally Posted by Anikdote

Bailing out lenders... bailing out homeowners, six one way, half dozen the other.

while i fear that the plan is intended to actually bail out the lenders, it does not have to be. which is why Obama's comments to the secretary of the treasury to focus on aiding home buyers rather than lenders were encouraging

the replacement loans could disallow take out financing which exceeds some percentage of the PRESENT fair market value of the home ... which real property will continue to serve as the underlying collateral

lenders would have to eat the difference between the outstanding loan and the reduced federal loan eligibility resulting from lower current home values

that way the bank/investor can either (1) write off its loss and accept a compromised amount as satisfaction of its debt once the new federally back loan is placed or (2) the lender can refuse to accept the lesser amount available under the refinancing plan and either hope (a) the borrower finds a means to pay, (b) the borrower can sell the real property for enough to cover the outstanding debt, or (c) the lender takes a bath by going thru foreclosure in the present market

only stupid lenders would refuse to recognize their losses and move on ... but being stupid got them in this position in the first place

Raharu Haruha · #24 (**permalink**) 07-29-2008, 11:30 PM

Quote:

Originally Posted by justabubba

Obama seems to "get it" ... maybe this week's meeting with the major economists and financal honchos put him on the right track:

[bold emphasis added]
http://rawstory.com/news/2008/Obama_...nomy_0729.html

Why would they need help? They were people who felt they could afford a house. Now that they don't have to pay for the house are they going to be suddenly poor? I don't think so. They'll have bad credit, but boo hoo, why do you need to buy their house?

justabubba · #25 (**permalink**) 07-30-2008, 01:09 AM

Quote:

Originally Posted by Raharu Haruha

Why would they need help? They were people who felt they could afford a house. Now that they don't have to pay for the house are they going to be suddenly poor? I don't think so. They'll have bad credit, but boo hoo, why do you need to buy their house?

actually i agree with you. no government intervention should be provided, whatsoever

but congress saw it differently and sent up for dubya's execution a package which was sold as help for distressed borrowers -- which funds could very easily be used to bail out lenders instead

just trying to find a way to make the best out of a bad situation

Raharu Haruha · #26 (**permalink**) 07-30-2008, 11:01 AM

Quote:

Originally Posted by justabubba

actually i agree with you. no government intervention should be provided, whatsoever

but congress saw it differently and sent up for dubya's execution a package which was sold as help for distressed borrowers -- which funds could very easily be used to bail out lenders instead

just trying to find a way to make the best out of a bad situation

More like, trying to help his buddy into the white house.

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