Some of you are sugar coating this deal and know better.

 

Our government has NO BUSINESS helping anyone pay their mortgage or lowering their rate. It disgusts me every time I think about it.

 

Open your eyes folks. It's nothing more than a vote buying scheme! When someone buys a vote it's their business, but when my government uses MY MONEY to buy votes, it's disgusting!

Edited February 19, 200917 yr by SKINPIG

IMVHO anyone who got a mortgage the "right" way and has been diligent in making their payments should feel as if they've been slapped in the face.

 

I heard on a radio program today that someone who re-finances through the Obama plan and stays up to date would qualify for a $1000 credit towards their principal annually for 3 years. Please tell me how I can get 3 grand taken off of the principal of my mortgage.

 

:thumb: I totally agree with your frustrations. What about the ones who have been doing things the right way?:confused:

Because it is the right thing to do.

 

We may disagree a lot on politics, but you nailed this one! :thumb:

Here is an example of why all of us who are paying our mortgages and will now be subsidizing those who are not, should be less than thrilled with Obama's plan. Citizen F bought a house 2 years ago for 600K. They financed 100% of the 600K loan for the home and it was more house than they could afford, but house values were going up so they went for the interest only ARM in order to afford the monthly payment. Now they are struggling to make the payments and the house is worth approximately 500K. Citizen F, decides they want to have us the responsible mortgage payers and taxpayers subsidize their mistakes. This is my understanding of how the Obama plan will work for Citizen F. Citizen F will have their principal balance reduced to the approximate fair market value of the home (so in this case about 100K off their mortgage) and they also get a significantly reduced interest rate not available to us responsible homeowners on the open market (approximately 2-4%). As if that were not bad enough, ready for the really sick part. Five to seven years from now, when the market recovers and Citizen F goes to sell their house which is now worth 625K or greater, Citizen F pockets all of the profit on the sale(someone please correct me if I am wrong, but this is how I read it)... That is completely absurd IMO. IMO we, the taxpayers, should get all the profit at least back to he original principal amount of 600K, and arguably all of the profit because of the front end subsidy Citizen F received (I will not be greedy and just be happy with our money back with zero interest charged). So basically Citizen F gets to participate in all the upside potential of home ownership, with the added downside protection of my tax dollars to subsidize their mistakes. Welcome to socialism...

I am fortunate to have a loan that, if the rates go down, I can lower my rate, for a small fee of course. I went from 5.55% to 4.5%. I pay my monthly payments on time and expect everyone with a loan to do the same. I do not wish to help anyone pay their payments, they should be responible or suffer the consequences.

What happens if we let large numbers of mortgages default?

I would, but who do I get in touch w/ so that I would only be paying 2%?

 

PM me. I might be able to point you in the right direction...

What happens if we let large numbers of mortgages default?

 

Houses get foreclosed, people move into housing they can afford, banks resell the houses to buyers in a better capital position. Hopefully both parties learn a good lesson. The circle of life.

Houses get foreclosed, people move into housing they can afford, banks resell the houses to buyers in a better capital position. Hopefully both parties learn a good lesson. The circle of life.

 

I'd agree if you're talking about one house in a neighborhood. This plan is aimed at communities where a great number of houses are being dumped. That kills the value of all of those like you who are paying their mortgages.

 

This plan IMO is a bitter pill to swallow but you just can't let the housing market collapse and large chunks of communities go into default.

 

In addition, if certain banks who have many mortgages vulnerable to default and multiple banks go under the people whose deposits are in those banks are in trouble.

All values are being hurt right now, regardless of the number of foreclosures. If I was in that neighborhood, my choices are move or pay my mortgage and stay in my house until things turn around (which they will, it will just take a few years, maybe 5 or more). This has happened in the past. To me this is no different than someone buying an investment that was overvalued. When the asset dropped in value, you have two choices (sell it in hope of retaining some of your capital, or hold onto it and wait for it to regain value). Should those that bought shares of PG at 80, be looking to the governent/taxpayers to make up the difference in the amount that the stock has declined? Yes homes are slightly different than stocks as homes are tangilble assets, but the principal is the same.

 

People with deposits in banks are insured up to 100K (I think FDIC might have gotten increased recently as well) by the federal government already so those with deposits over that amount should know the risk they are taking.

 

The problem here is that people need to feel this pain, that way they learn their lesson and do not make the same mistake again. Both parties, banks and individuals. If they know big brother is going to come in and bail them out, they will make the same mistake again, because the lack of consequences do not prevent the same errors from occurring.

All values are being hurt right now, regardless of the number of foreclosures. If I was in that neighborhood, my choices are move or pay my mortgage and stay in my house until things turn around (which they will, it will just take a few years, maybe 5 or more). This has happened in the past. To me this is no different than someone buying an investment that was overvalued. When the asset dropped in value, you have two choices (sell it in hope of retaining some of your capital, or hold onto it and wait for it to regain value). Should those that bought shares of PG at 80, be looking to the governent/taxpayers to make up the difference in the amount that the stock has declined? Yes homes are slightly different than stocks as homes are tangilble assets, but the principal is the same.

 

People with deposits in banks are insured up to 100K (I think FDIC might have gotten increased recently as well) by the federal government already so those with deposits over that amount should know the risk they are taking.

 

The problem here is that people need to feel this pain, that way they learn their lesson and do not make the same mistake again. Both parties, banks and individuals. If they know big brother is going to come in and bail them out, they will make the same mistake again, because the lack of consequences do not prevent the same errors from occurring.

 

Gunner , your example doesn't work here.

 

If me, you, and RTS all bought stock in P&G and it plummeted, our neighbor isn't going to go in the hole.

 

Secondly, if you are in a community hard hit by the burst, your house now is worth considerably less. You may have been counting on the equity to fund your child's education bills. You may have been counting on equity to fund part of your impending retirement.

 

There are many negatives of your neighbor's troubles effecting you even though you have been 100% playing by the rules.

 

Lastly, if a large bank would go under because of so many failed mortgages this would have a snowball effect on other large banks. People would demand their money. Banks don't have the money. The FDIC insures upto $250k now (I think) but the fund that provides the insurance is only a miniscule fraction of the deposits in this country. I think its something like $30B to $40B in the fund but trillions and trillions of deposits.

 

As I said, its a bitter pill but if its good for the country you should look at it as an unfortunate but needed step.

Gunner , your example doesn't work here.

 

If me, you, and RTS all bought stock in P&G and it plummeted, our neighbor isn't going to go in the hole.

 

Secondly, if you are in a community hard hit by the burst, your house now is worth considerably less. You may have been counting on the equity to fund your child's education bills. You may have been counting on equity to fund part of your impending retirement.

 

There are many negatives of your neighbor's troubles effecting you even though you have been 100% playing by the rules.

 

Lastly, if a large bank would go under because of so many failed mortgages this would have a snowball effect on other large banks. People would demand their money. Banks don't have the money. The FDIC insures upto $250k now (I think) but the fund that provides the insurance is only a miniscule fraction of the deposits in this country. I think its something like $30B to $40B in the fund but trillions and trillions of deposits.

 

As I said, its a bitter pill but if its good for the country you should look at it as an unfortunate but needed step.

 

Why is our neighbor not going to go into the hole? Half of this country owns stocks, so yes when my neighbor sells and your neighbor sells, and his neighbor sells, the price goes down and we are effected... Like I said, the assets are different, but the principal is the same. However the difference here is that because it is a tangible asset like your home it is someone elses responsibility (taxpayers/the government) to pay for my poor decision. That is a slippery slope to go down. So every time someone overpays for something, big brother will step in instead of letting the error/loss occur...

 

If you were planning on using the equity in your home to fund your child's education and it does not work out, then you made an extremely poor decision. Why should my tax dollars compensate you for your inept planning?

 

Where do the "unfortunate needed steps" end? Where do you draw the line? Like someone pointed out before in another thread. The airlines have been allowed to go bankrupt, we still have planes and air transportation. Right now it is the homeowner, next it is the auto makers, next the banks, next the insurance companies, next the car dealerships, etc. etc... All lining up for a get out of jail free card at your and my expense...

Why is our neighbor not going to go into the hole? Half of this country owns stocks, so yes when my neighbor sells and your neighbor sells, and his neighbor sells, the price goes down and we are effected... Like I said, the assets are different, but the principal is the same. However the difference here is that because it is a tangible asset like your home it is someone elses responsibility (taxpayers/the government) to pay for my poor decision. That is a slippery slope to go down. So every time someone overpays for something, big brother will step in instead of letting the error/loss occur...

 

Where do the "unfortunate needed steps" end? Where do you draw the line? Like someone pointed out before in another thread. The airlines have been allowed to go bankrupt, we still have planes and air transportation. Right now it is the homeowner, next it is the auto makers, next the banks, next the insurance companies, next the car dealerships, etc. etc... All lining up for a get out of jail free card at your and my expense...

 

I should have clarified that our neighbor doesn't own P&G stock. He didn't make the same investment as we did. Therefore, he's not effected - unlike the mortgage issue.

 

You've certainly asked a fair question as to where does it end.

 

My point is that doing nothing and letting people fail in massive numbers has consequences to you and me even though our payments are in the mail every month on time. We don't live in a bubble (pardon the pun).

I should have clarified that our neighbor doesn't own P&G stock. He didn't make the same investment as we did. Therefore, he's not effected - unlike the mortgage issue.

 

You've certainly asked a fair question as to where does it end.

 

My point is that doing nothing and letting people fail in massive numbers has consequences to you and me even though our payments are in the mail every month on time. We don't live in a bubble (pardon the pun).

 

I agree with you, action and inaction both have consequences. My issue is that this action seems extremely unfair in the opposite direction toward the people (taxpayers) that are going to be footing this bill. Moreso than the pain that would be caused by letting these people get foreclosed.

 

The economist in me says inaction, while painful, may be the necessary medicine for those that made the bad decisions.

 

I am very scared that this slippery slope is going to turn into nationalized banks and more government control of things they have no business being involved in.

I should have clarified that our neighbor doesn't own P&G stock. He didn't make the same investment as we did. Therefore, he's not effected - unlike the mortgage issue.

 

You've certainly asked a fair question as to where does it end.

 

My point is that doing nothing and letting people fail in massive numbers has consequences to you and me even though our payments are in the mail every month on time. We don't live in a bubble (pardon the pun).

 

A problem to me is where is the incentive to pay your mortgage if you will be bailed out by the government anyway? Who decides if I can afford my payment or not? Why not store cash in a shoe box and show no money to pay your bills? Do people get bailed out of their mortgage if they have two car payments and a boat? If I drive a new car off of a lot tomorrow I'm upside down in that loan, do they lower the principal of that loan by $1000 a year and give me a 2% interest rate in that case? This next part is a joke kind of, do only people who voted for O get bailed out? Who really decides?