The Presidental BS conference - DPChallenge Forums

02/20/2009 11:12:12 AM · #176

Originally posted by LoudDog:

Simple solution. Short sale and get into a house they can afford, or rent. No need to forelose. The wave of people downsizing would probaby be good for the market! No need for me to pay for people to live above their means.

Reminder:

Originally posted by scalvert:

...you're selling into a falling market, where credit and buyers are both scarce and the value may be much lower than the original mortgage. When that happens, you may wind up still owing money AND homeless. Those are the people the bailout is aimed at. Whether they made bad decisions or not, a glut of empty houses and destitute people could easily drive down the value of your home even more than it would cost to help them.

Your simple solution would crush the value of your own home and neighborhood, and potentially leave taxpayers with the burden of sheltering a surge of homeless people whose debt exceeded the market value of the homes they sold. You might very well sacrifice your own worth just to keep someone else from having what they shouldn't have bought.

Message edited by author 2009-02-20 11:18:01.

02/20/2009 01:18:37 PM · #177

Originally posted by scalvert:

Originally posted by LoudDog:
Simple solution. Short sale and get into a house they can afford, or rent. No need to forelose. The wave of people downsizing would probaby be good for the market! No need for me to pay for people to live above their means.

Reminder:
Originally posted by scalvert:
...you're selling into a falling market, where credit and buyers are both scarce and the value may be much lower than the original mortgage. When that happens, you may wind up still owing money AND homeless. Those are the people the bailout is aimed at. Whether they made bad decisions or not, a glut of empty houses and destitute people could easily drive down the value of your home even more than it would cost to help them.

Your simple solution would crush the value of your own home and neighborhood, and potentially leave taxpayers with the burden of sheltering a surge of homeless people whose debt exceeded the market value of the homes they sold. You might very well sacrifice your own worth just to keep someone else from having what they shouldn't have bought.

The value of my own home is already crushed. 20% drop in the last 2 years (when I bought). No one is helping me. I'm not asking for a handout. But if I bought the house I wanted on an interest only ARM and could no longer make the payments (like many have) Obama would be bailing me out. So in the end, shame on me for being responsible?

I'd much rather see my home price drop more, that market stabalize and fix the right way, and things back to normal some day then to bandaid it with this crap which mortgages our kids future even further, rewards bad decisions, only prolongs or delays the real problems, and is a slap in the face to the 90% of us that were responsible and are suffering and struggling with this stupid mess.

Canon 12x IS USM (S3 IS built-in Lens) -- 36-432mm (35mm EQ)

02/20/2009 01:21:51 PM · #178

Originally posted by GeneralE:

Originally posted by LoudDog:
This is what I�m talking about:

Together the couple made $3700/month. They tried to buy a condo where the payments would be $7200 per month!!! And somehow it�s not their fault?

How is making a loan under those conditions not an irresponsible business practice on the part of the bank? They could ask for a mortgage on Windsor Castle, but the bank's under no obligation to grant such a request.

I don't really disagree that people who deliberately over-bought or concealed their true financial resources from the lender shouldn't get this kind of help, but remember that it's the minority of extreme and egregious cases which get the publicity -- I'd have to guess that the vast majority of people seeking/getting help under these programs are the victims of circumstance rather than fraudsters.

If I ask you to lend me money that I have no way to pay back and lie to you and say i can pay it back, when I don't pay you back, is it your fault or mine? I'd say both, but more my fault for being devious then your fault for being naive.

You assume that the people being foreclosed on are mostly bad luck cases.

I contend that the VAST majority of these cases are people that knowingly (or stupidly) bought more house then they could afford (mostly via interest only ARMS or negative amortization mortgages) or are investors that bit off more then they could handle and are willingly letting the bank foreclose and it�s the cheapest and easiest way out of the sinking ship (and you will be shocked how many people are doing this).

I challenge anyone to prove me wrong and will be happy to admit I was wrong if you can.

Message edited by author 2009-02-20 13:24:56.

GeneralE

Canon PowerShot S3 IS

02/20/2009 01:35:46 PM · #179

Originally posted by LoudDog:

If I ask you to lend me money that I have no way to pay back and I lie to you and say i can pay it back, when I don't pay you back, is it your fault or mine? I'd say both, but more my fault for being devious then your fault for being naive.

When banks stopped asking people to prove (or demonstrate) their source of income, they (the banks, IMO) took on the bulk of the responsibility ... if I were to just take your word that you could pay me back (or not even ask), then I think I'd bear the greater responsibility (in a business, not moral sense) for the outcome.

I think there are also plenty of folks who are in homes they could afford at the time of purchase, but who've been downturned/downsized out of some or all of their income; unless they are self-employed or had certain foreknowledge of their impending layoff, I don't see how they can really be blamed for a situation not of their making.

I don't know what percentages of people were frauds or speculators, and how many just victims of the changes in the overall economic situation. I actually think we're not far apart on what should happen to the cheaters, but just have markedly different estimates of how many fall into each category, and we both admit that all we have are our own estimates. Perhaps we should move on to a different argument, since this one will only be settled with time, and neither of us has any influence over how the plan will proceed.

02/20/2009 01:37:50 PM · #180

Your view of the market might change if you were in a position where you needed to sell your house now. Sure you can handle the virtual 20% decrease in your house's value because you aren't trying to sell it.

As far as I understand the mortgage bailout plan, that couple you talked about with the $7200 payment and $3700/month income would still get foreclosed on. No amount of bailing out under the plan is going to save them. Their foreclosure may be delayed, but it's inevitable, so why bring it up as evidence against? You provided your own challenge. I challenge you to show me how these people keep their condo under Obama's plan.

Message edited by author 2009-02-20 13:39:07.

02/20/2009 01:52:35 PM · #181

Originally posted by LoudDog:

No one is helping me. I'm not asking for a handout. But if I bought the house I wanted on an interest only ARM and could no longer make the payments (like many have) Obama would be bailing me out. So in the end, shame on me for being responsible?

Ayiyi. You don't even know what the proposed bailout entails, do ya? Nobody is getting a fancy estate for free or even a discount. It's essentially a plan to lower a high interest rate on what you owe. The Fed raised interest rates 15 consecutive times since 2004, and that can have a major impact on monthly payments. If your monthly mortgage payment is greater than 31% of your monthly gross income, you may qualify to have the loan modified to a lower interest rate. You still have to pay for what you bought, just at a lower interest rate.

02/20/2009 02:05:50 PM · #182

Originally posted by scalvert:

Originally posted by LoudDog:
No one is helping me. I'm not asking for a handout. But if I bought the house I wanted on an interest only ARM and could no longer make the payments (like many have) Obama would be bailing me out. So in the end, shame on me for being responsible?

Ayiyi. You don't even know what the proposed bailout entails, do ya? Nobody is getting a fancy estate for free or even a discount. It's essentially a plan to lower a high interest rate on what you owe. The Fed raised interest rates 15 consecutive times since 2004, and that can have a major impact on monthly payments. If your monthly mortgage payment is greater than 31% of your monthly gross income, you may qualify to have the loan modified to a lower interest rate. You still have to pay for what you bought, just at a lower interest rate.

I heard yesterday that even if they dropped the interet rate to 2%, 40% of troubled borrowers will still foreclose. The plan is to lower interest rates and principal as needed to get to 31% of the person's income. Given that 40% number it will take more then just interest cuts.

I have the same principal and the same interest rate I started with because I was smart enough to plan my house payments to be affordable to begin with. No one is paying banks to cut my interest rate or principal. How is that not a "discount" for bad decision making?

Canon EF-S 17-55mm f/2.8 IS USM

02/20/2009 02:18:50 PM · #183

Originally posted by LoudDog:

Originally posted by DrAchoo:
Your view of the market might change if you were in a position where you needed to sell your house now.

Bad assumption, VERY bad assumption. My wife is/was a real estate agent. We moved to a different state 2 years ago and in this down market it has been very hard for a new agent to get a client base. After losing $25,000 the last two years and with no signs of the market turning around she cut her losses and is looking for a 9-5 job.

No, I'm not trying to sell a house, but when a dual income home turns into a single income home with a $25,000 debt it gets difficult. A real estate agent does not qualify for unemployment, no bailout, no help from govt unless I stop paying my mortgage.

edit, on the other part of your post I agree, they would probably not get a bailout because they are the exteme case. What I have seen is people that could afford a $300,000 buy a $400-500,000 home on an interest only ARM. Those people are getting bailouts.

Message edited by author 2009-02-20 14:19:46.

jpochard

Canon EOS-40D

02/20/2009 02:20:14 PM · #184

By the way, there is a new mortgage fraud out there that is close to one of the suggestions being made here. It's called "buy and bail." Generally speaking...the homeowner realizes they are in over their heads with their current mortage, but have not yet defaulted. They purchase a cheaper home as "rental, investment or second home"...and then bail from the first place, just walking away and moving into the cheaper place.

edit to add: I've been a Realtor for 11 years.

Message edited by author 2009-02-20 14:22:07.

02/20/2009 02:24:35 PM · #185

Originally posted by LoudDog:

I heard yesterday that even if they dropped the interet rate to 2%, 40% of troubled borrowers will still foreclose.

Do you have a credible source for that figure, or did it come from your cousin's neighbor's pool guy? What if they dropped that rate to 1.5% or 1%? Note that banks are getting a nearly 0% rate now, and wouldn't be incurring the trouble and cost of foreclosure. Cutting the rate of foreclosures by 60% or more is not a bad thing.

Originally posted by LoudDog:

I have the same principal and the same interest rate I started with because I was smart enough to plan my house payments to be affordable to begin with.

We started with a rate we could afford, but when those rates dropped, we refinanced and then refinanced again... eventually winding up with a rate almost 40% lower than the original, and for half the term. Unless you happened to buy at the interest rate lows of 2003, I wouldn't go trumpeting claims of how smart you are (by not refinancing, you flushed a pile of cash down the proverbial toilet). If you DID buy in 2003, then you benefitted more from timing than intelligence. It's one or the other: you're either lucky or foolish.

Message edited by author 2009-02-20 14:31:26.

Canon EF-S 17-55mm f/2.8 IS USM

02/20/2009 02:24:42 PM · #186

Originally posted by jpochard:

Yes, I know someone doing this (not at all a friend!!!)

You buy the cheaper house and get all the paper work through, as soon as the paperwork is signed you bail on the other one. bank forecloses, you walk away from the problem, 7 years later your credit is fixed.

My short sale solution rather then foreclosure prevents this.

jpochard

Canon EOS-40D

02/20/2009 02:26:29 PM · #187

The biggest change we've seen is more willingness from investers, banks etc. to actually work with a home owner to try and prevent foreclosure. Even a year ago, banks just really didn't care until you reached 90 days or more in default of payments. By then, a short sale wasn't a possibility.

We do a lot of short sales, and we are seeing more banks willing to release the sellers from the deficiencies in the payoff of the mortgage. It saves the banks from the expense of going through the foreclosure process. Loss mitigation departments will actually talk with us now.

That's really the biggest change I have seen in the last several months. The first time buyer's credit has already helped activity in our area as well.

Message edited by author 2009-02-20 14:38:23.

02/20/2009 02:27:35 PM · #188

Originally posted by LoudDog:

A real estate agent does not qualify for unemployment, no bailout, no help from govt unless I stop paying my mortgage.

Wrong. If you stopped paying your mortgage, you wouldn't qualify for mortgage help. There are no free rides.

02/20/2009 02:33:36 PM · #189

Originally posted by scalvert:

Originally posted by LoudDog:
I heard yesterday that even if they dropped the interet rate to 2%, 40% of troubled borrowers will still foreclose.

Do you have a credible source for that figure, or did it come from your cousin's neighbor's pool guy? What if they dropped that rate to 1.5% or 1%? Note that banks are getting a nearly 0% rate now, and wouldn't be incurring the trouble and cost of foreclosure.

Originally posted by LoudDog:
I have the same principal and the same interest rate I started with because I was smart enough to plan my house payments to be affordable to begin with.

We started with a rate we could afford, but when those rates dropped, we refinanced and then refinanced again... eventually winding up with a rate almost 40% lower than the original, and for half the term. Unless you happened to buy at the interest rate lows of 2003, I wouldn't go trumpeting claims of how smart you are (by not refinancing, you flushed a pile of cash down the proverbial toilet). If you DID buy in 2003, then you benefitted more from timing than intelligence.

Heard the 40% thing on CNBC.

Because My loan is backwards, and other things, re-finance is not an option. But my interest rate is not bad at all. But thanks for your concern :) And yes, I know they are expanding Freddy/Fanny to 105% of the loan so we may be able to refinance. I plan to look into that.

Canon EF-S 17-55mm f/2.8 IS USM

02/20/2009 02:37:19 PM · #190

Originally posted by scalvert:

Originally posted by LoudDog:
A real estate agent does not qualify for unemployment, no bailout, no help from govt unless I stop paying my mortgage.

Wrong. If you stopped paying your mortgage, you wouldn't qualify for mortgage help. There are no free rides.

Disagree.

There is another real estate scam out there where you intentionally miss 2 payments and if the bank does not call you, you call them. You risk foreclosure but most people are ending up renegotiating interest and sometimes principal.

And I believe some of the TARP funds are funding this but it may be the banks just sucking up the losses?

Obama's plan is to cut the payment to 31% of income. I'm already there, so you are correct in that Obama's plan would not give ME a discount/free ride.

jpochard

Canon EOS-40D

02/20/2009 02:42:50 PM · #191

The other thing to realize is that banks will check for assets and ability to pay. Just because you missed a payment or two doesn't automatically qualify you for restructuring of your loan. If the banks see that you CAN pay, but just WON'T pay, they still come down hard.

02/20/2009 02:52:41 PM · #192

Originally posted by scalvert:

It depends if you consider Rick Santelli reliable...

Listen, nobody is really comfortable with the idea of giving aid to people who have made poor choices while ignoring people who make good choices. Nobody. There are times, however, when you are forced to do so in order to keep the responsible people from being dragged down the cliff with them. Are we there? That's the debate. But don't paint those who are pro-bailout as just wanting to help those who don't deserve it.

I don't know why my words about you selling your house were bad. You AREN'T trying to sell your house. And I don't care if your wife is a real estate agent. My mom is a real estate agent. I'm sure you weren't complaining in 2005 when she was doing deals every week with multiple offers on the same house and people bidding prices up into the stratosphere. Real estate agents were benefitting from the irrationality at that point.

Message edited by author 2009-02-20 14:57:06.

02/20/2009 02:59:09 PM · #193

Originally posted by jpochard:

Correct, but lying about income/assets is even easier when you are saying you make/have less! And the "loan modification consultants" out there can help you with that.

Pentax D-FA* 70-200mm f/2.8 ED DC AW

02/20/2009 03:02:10 PM · #194

Originally posted by LoudDog:

Originally posted by jpochard:
The other thing to realize is that banks will check for assets and ability to pay. Just because you missed a payment or two doesn't automatically qualify you for restructuring of your loan. If the banks see that you CAN pay, but just WON'T pay, they still come down hard.

Correct, but lying about income/assets is even easier when you are saying you make/have less! And the "loan modification consultants" out there can help you with that.

I never understand this attitude. F*ck the people who really need help, because somebody is going to game the system. We wouldn't have a single government program out there if it was a requirement that nobody can unethically benefit from it. While we're at it we should probably shut down the stock market...

Message edited by author 2009-02-20 15:03:04.

K3Master

Pentax K-3

02/20/2009 03:04:13 PM · #195

Originally posted by DrAchoo:

Originally posted by LoudDog:

Originally posted by jpochard:
The other thing to realize is that banks will check for assets and ability to pay. Just because you missed a payment or two doesn't automatically qualify you for restructuring of your loan. If the banks see that you CAN pay, but just WON'T pay, they still come down hard.

Correct, but lying about income/assets is even easier when you are saying you make/have less! And the "loan modification consultants" out there can help you with that.

I never understand this attitude. F*ck the people who really need help, because somebody is going to game the system. We wouldn't have a single government program out there if it was a requirement that nobody can unethically benefit from it. While we're at it we should probably shut down the stock market...

We'd pretty much have to shut down life and humanity as a whole.

02/20/2009 03:06:41 PM · #196

Originally posted by DrAchoo:

I don't know why my words about you selling your house were bad. You AREN'T trying to sell your house.

Your assumption that I'm not feeling the pain of the market was bad.

If a real estate agent can't sell houses they don't make money. It's not just homeowners that suffer. And yes, it was good for a few years? That's why I'm not crying about losing $25K.

Sorry if that confused you.

And if you watch that video, Santelli didn't say that 2/40 stat. Someone else did, the anchor tried to ask Santelli about it. I'm not sure of the real source of the stat or if it's accurate.

02/20/2009 03:10:21 PM · #197

Originally posted by LoudDog:

And if you watch that video, Santelli didn't say that 2/40 stat. Someone else did, the anchor tried to ask Santelli about it. I'm not sure of the real source of the stat or if it's accurate.

So we don't have a source. Well, assuming it's true, maybe it's good news. It means the worst offenders (40% of the total) are unlikely to be bailed out. It does mean the people who are closest to actually making their payment (and thus are least likely to have really abused the system) can get some help. Having 60% of the potential foreclosures not hit the market would go a long way. No plan is going to keep 100% of the foreclosures off the market and no plan should.

02/20/2009 03:11:00 PM · #198

Originally posted by DrAchoo:

Please pay attention. I'm against this plan because most of the people that "need" the help are in the position because of their own greedy choice to get into a home they can't afford, ot they were a greedy investor that failed. As I already stated, put in good checks and balances help the 3 or 4 (exageration for those of you that do not understand) pepel that really do need the help and I'm for it. Or help people short sale rather then foreclose. I'd even be okay if my tax dollars were used to assist short sales!

The scams is just more ammunition for how F'd up this mess is.

02/20/2009 03:13:09 PM · #199

Haha, here's the level of journalism these days. This local news article has the 40% and 2% stat as the headline. Their source? The Santelli video where it was purely mentioned out of the blue with no source to back it up.

Sounds like someone really dug a scoop up there. Does journalism actually require a GED these days?