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?

 

No - those who contributed to the O.

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.

 

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?

 

Unless I've not read all of the details, I don't think someone who hasn't been paying their mortgage or has gone into default gets bailed out. So that answers the incentive question for me.

 

The cars and boats also fail to come into play if I read it correctly. The only factors are mortgage payment as a % of your income and home value vs mortgage balance. Cars, boats, and other toys are not a factor.

 

Inaction in some markets is the way to go. I'm not sure if it is in this market. One thing we haven't discussed is the effect on credit lines available to businesses. If a bank suffers massive mortgage losses as a result of defaults I think that effects their ability to make loans to businesses. I know the tight credit market has stopped the company I work for from buying another business to add to our offerings.

 

We tend to look at it in a micro way vs a macro view which takes into account the domino effects of any decision made.

Unless I've not read all of the details, I don't think someone who hasn't been paying their mortgage or has gone into default gets bailed out. So that answers the incentive question for me.

 

The cars and boats also fail to come into play if I read it correctly. The only factors are mortgage payment as a % of your income and home value vs mortgage balance. Cars, boats, and other toys are not a factor.

 

Inaction in some markets is the way to go. I'm not sure if it is in this market. One thing we haven't discussed is the effect on credit lines available to businesses. If a bank suffers massive mortgage losses as a result of defaults I think that effects their ability to make loans to businesses. I know the tight credit market has stopped the company I work for from buying another business to add to our offerings.

 

We tend to look at it in a micro way vs a macro view which takes into account the domino effects of any decision made.

 

 

I agree w/ that, but there really isn't much of an incentive. I heard yesterday that even w/ this help that 40% of the people who qualify for the help still won't be aable to afford it. The problem that I see is very micro, I can afford my payment, but why not seek this help from the government. My principal gets lowered and I only would have a 2% interest rate. Do the right people get help? Do people take advantage of it that don't need it? Does it really help in the grand scheme of things?

Unless I've not read all of the details, I don't think someone who hasn't been paying their mortgage or has gone into default gets bailed out. So that answers the incentive question for me.

 

The cars and boats also fail to come into play if I read it correctly. The only factors are mortgage payment as a % of your income and home value vs mortgage balance. Cars, boats, and other toys are not a factor.

 

Inaction in some markets is the way to go. I'm not sure if it is in this market. One thing we haven't discussed is the effect on credit lines available to businesses. If a bank suffers massive mortgage losses as a result of defaults I think that effects their ability to make loans to businesses. I know the tight credit market has stopped the company I work for from buying another business to add to our offerings.

 

We tend to look at it in a micro way vs a macro view which takes into account the domino effects of any decision made.

 

 

This is not true (although I know you do not realize it and said that you do not have all the information). I have the PDF doc of it, but do not know how to post it.

 

Per page 3 under Section B. Loan modifications it says.

 

To qualify for a loan modification under this Policy, the borrower must be at least 60 days delinquent. Exceptions to this requirement may be made in appropriate cases, such as if a borrower is expecting a known trigger event (e.g., an interest rate reset) or has recently experienced a decline in income that, in either case is likely to result in the borrower becoming 60 days or more past due.

 

So the ones that are paying their mortgage, do not qualify for this Policy.

This is not true (although I know you do not realize it and said that you do not have all the information). I have the PDF doc of it, but do not know how to post it.

 

Per page 3 under Section B. Loan modifications it says.

 

To qualify for a loan modification under this Policy, the borrower must be at least 60 days delinquent. Exceptions to this requirement may be made in appropriate cases, such as if a borrower is expecting a known trigger event (e.g., an interest rate reset) or has recently experienced a decline in income that, in either case is likely to result in the borrower becoming 60 days or more past due.

 

So the ones that are paying their mortgage, do not qualify for this Policy.

 

Thanks. Can you post the link of the site that provided the PDF?

Thanks. Can you post the link of the site that provided the PDF?

 

I tried but it is an embedded doc. I'll look to see if I can find it elsewhere.

Found one.

 

http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20090130a1.pdf

 

Thoughts?

You can't simply quit making your mortgage payments and get help.

 

I don't believe you can quit your job and get help either.

Unemployment or better yet welfare.:irked:

You can't simply quit making your mortgage payments and get help.

 

I don't believe you can quit your job and get help either.[/quote]

Unemployment or better yet welfare.:irked:

 

The whole thing stinks if you ask me... It is moving this country completely the opposite direction of where it should be going IMO. This is socialism, plain and simple. The next move will be, everyone should be entitled to a job that pays 60K per year, if you do not make that much, the government/taxpayers will subsidize the difference.

Found one.

 

http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20090130a1.pdf

 

Thoughts?

 

This is dated 1.30.09. Wasn't the bailout just signed?

Here's an article talking about people that are unhappy because they are excluded from the program.

 

http://online.wsj.com/article/SB123500329338917907.html

This is dated 1.30.09. Wasn't the bailout just signed?

 

Not sure your point? Are you saying this is not accurate? I am assuming not, by looking at your next post which seems to detail a similar situation to the example that I originally described. Have you changed your thoughts on all of this?

Not sure your point? Are you saying this is not accurate? I am assuming not, by looking at your next post which seems to detail a similar situation to the example that I originally described. Have you changed your thoughts on all of this?

 

I guess I'm not smart enough to read your link and tell if its accurate and germane. I'm not sure how we can have a fed document dated before the bill was signed.

I guess I'm not smart enough to read your link and tell if its accurate and germane. I'm not sure how we can have a fed document dated before the bill was signed.

 

I was not trying to be flippant or suggest that you are not smart enough to read it.:confused:

 

This is what the Federal Reserve has proposed to do with mortgages that they own and it is also what Obama and Geithner are going to get the Treasury department/Federal Government to do for mortgages owned by Fannie Mae and Freddie Mac and potentially all mortgages across the country. The document that I linked is the blueprint of their mortgage bill. So if this is their plan (which by all accounts I can find it is) I am assuming that you have changed your opinion that, "you just can't quit paying your mortgage and get help" because that is exactly what it appears to be the case. What are your thoughts?

I was not trying to be flippant or suggest that you are not smart enough to read it.:confused:

 

This is what the Federal Reserve has proposed to do with mortgages that they own and it is also what Obama and Geithner are going to get the Treasury department/Federal Government to do for mortgages owned by Fannie Mae and Freddie Mac and potentially all mortgages across the country. The document that I linked is the blueprint of their mortgage bill. So if this is their plan (which by all accounts I can find it is) I am assuming that you have changed your opinion that, "you just can't quit paying your mortgage and get help" because that is exactly what it appears to be the case. What are your thoughts?

 

Let me be clear. I took no offense to anything you posted. I truly meant that I am not smart enough to determine if the link you posted is the final bill.