The Democrats Need to Pass a Mortgage/Foreclosure Bill NOW!

[Dems Will Win]

For Pete's Sake! We are going to have a Depression for sure if they don't act NOW.

WTF are they waiting for? Obama could win A LOT of votes if he spoke on the Senate Floor and introduced or co-sponsored a bill.

Foreclosures should have a long moratorium and all of these sub-primes should be rescheduled so their rates DO NOT rise and there is a low fixed rate.

FUCK!

It's a metter of weeks, not months here. People are losing their homes and lives NOW.

[flvegan]

1. What kind of Bill? What would be the intent/purpose?

[Vincardog]

2. The first thing it would do is protect the people who took the loans not the ones who profited fro

Why not roll ALL house mortgages into a US GOVT POOL AND let them all have the same fixed rate of say 6%?

[sepulveda]

3. in other words

we should create perverse incentives by rewarding those who overleveraged and/or bought more house they could afford, and/or with ridiculous zero interest loans?

the market needs to correct properly. when i bought my last house, my realtor told me i should buy a way bigger house cause i could afford it and because "prices have to go up". lol

where there was provable cases of illegal lending practices, punish the wrongdoers. but giving blanket gifts to those who chose to act financially irresponsibly is wrong.

[Vincardog]

5. You would prefer a bill that rewards the bankers for making the irresponsible loans in the first

place? You want to reward the parasitic hedge funds who siphoned off billion in profits creating this situation? What are you proposing? Oh an in case you are not a tool WELCOME TO DU

[sepulveda]

13. that's a false choice

i don't want either.

i don't have to propose anything to state that i don't agree with a specific proposal.

i have written elsewhere about this, so i'll keep it short.

bubbles are a natural part of capital markets - gold, oil, housing, , tech stocks, telecom stocks, the nifty fifty, tulips, etc. etc.

all markets go through bubble and bust cycles,. it's a natural result of swings in the supply/demand curve.

i don't believe in creating perverse incentives. i don't believe govt. should just give money (and that is why bailing out many of these people) to people who acted irresponsibly, selfishly, and imprudently.

thank you for the welcome btw.

fwiw, i lurked here a long time before i registered. i have seen a lot of posts about the housing crises that i have strongly disagreed with, and i readily accept that i may get some flames for my views on this, but i hold them strongly. having studies markets for decades, i am intimately involved in these price movements.

i trade futures for most of my income. so, i look at markets every day. i take responsibility for my bad trades. so do many hedge funds. do you have any idea how many hedge funds go BUST trying to make it. they take major risks, and if you are buying a house overleveraged and well beyond your means, YOU are taking major risk, too. you are doing (essentailly) the same thing hedge funds and speculators do - you are overextending in leverage/risk based on the (often false) assumption that price will move your way. people who did so with houses were (generally) speculating. if you buy a house, you better be damn sure to accept that it can go down in price, and leverage accordingly. people who buy after a 10+ yr bull market in housing, overleverage, use ridiculous ARM's/negative amortization etc. instruments to get more house than they can afford were (whether they admit it or not) buying into the "greater fool theory" (look it up).


the best thing we can do is (generally) LET the market correct. in some regional markets it has done so. i have said before, and i'll say it again - people who engaged in fraudulent or otherwise illegal lending practices should be PROSECUTED. i have zero sympathy for parasitic/fradulent lenders (and don't even get me started on usurious credit card lenders).

i have some sympathy for people who acted irresponsibly, cause they had no malice. but ultimately, they have to be responsible for their actions. and responsible homeowners who didn't overleverage shouldn't have to pay for others who did.

[dysfunctional press]

17. exactly right.

why should those of us who were prudent, and realized what was on the horizon, have to watch the irresponsible ones get rewarded for it?

it would NOT go over well, and if it were sponsored by obama, especially- it would mean another 4 years of a repuglican white house.

[AngryAmish]

6. Those people who profited from the loans are not the people holding the mortgages now

The way mortgages generally work is a bank or mortgage company gives a loan, sells the loan to an investment bank who then bundle the loans together and sells bonds based upon the income derived from the mortgages. Who bought the bonds? many people but mostly insurance companies, pension funds and other people seeking safe investments. These are not all high flying hedge funds (but many are).

So if all mortgages are rolled into a US gov't fund, it screws those people holding notes for higher interest. Pensions, etc. have been planned based upon that return. Not good.

You want to protect the little guy, a person who took hundreds of thousands of dollars to buy a house they may not afford. They did not have to do this. Now if they default other little people may get screwed by their actions.

This area is not all black and white.

One thing I do know is Hillary's mortgage plan would kill low end housing for a generation. It is awful. Barack's plan may be just as bad, but I don't know what his plan is.

[Vincardog]

11. That is how home loans work today. Back when home town banks made and serviced the loans

The had an interest in making sure that the loans were made to people that could and would pay them back.
That was before we deregulated the banks and allowed the predatory parasites into out financial house.
The only interests the current crop of politicians are wanting to protect are those of the moneyed class.
My post was to point out that any help should go to PEOPLE not the corrupt organizations that profited from and created the situation.

[AngryAmish]

14. Many people have homes today who could not afford them back in the day

20% down was standard. Many people could never get the cash together for that. So large families were raised in apartment buildings, with many relatives sharing bedrooms, little privacy, etc.

My point is that this banking mess is very complicated and when one makes these "off with their heads" remarks about the moneyed class one may end up advocating policies that hurt people in the un-monied class.

Bottom line: educate yourself about the issue. If one advocates freezing loans at teaser rates, or turning all adjustable loans into fixed then that will kill all home loans for low income and bad credit people for a generation. THat is not a good thing.

[Vincardog]

15. Project much? My post was about helping people not institutions, What is your post about?

What is the advantage of putting people into loans they can not afford? Who does that help?

[AngryAmish]

23. It helped a lot of people

Real estate agents and brokers, title companies, local and state governments, inspectors, mortgage brokers, attorneys, mortgage lenders and investment banks and bankers. All these people get paid to close a deal and don't care after the deal was closed.

Some people who bought too much house were helped when the prices were rising. If you make an interest only loan, your asset value goes up, you sell then, boom, you have made money as a real estate investor.

WHo has been hurt? Those who bought at the end of the bubble. That is the nature of bubbles.

We need reform but not the kind of reform that kills riskier loans, that is a way the screw people on the bottom rung of the ladder for a generation.

[Vincardog]

24. OH I get it you are more concerned with the

Real estate agents and brokers, title companies, local and state governments, inspectors, mortgage brokers, attorneys, mortgage lenders and investment banks and bankers. All these people get paid to close a deal and don't care after the deal was closed.

You think it is OK to screw the unlucky last guy in who has to pay the bill and get sent to debtor prison for failing. That is the nature of ponzi schemes.

[DaveJ]

7. Good idea, but that should be available to everyone

People also need to show concern for those who are homeless, and would like to have a home but have never been given the chance.

Whatever programs are available for student loans, for instance, very easy to get, should also be available to homebuyers.

Do that and the economy would skyrocket so much it would be scary.

[Tesha]

16. The people who *TOOK* the loans profited from them too.

> The first thing it would do is protect the people
> who took the loans not the ones who profited fro...

The people who *TOOK* the loans profited from
them too.

At least for a while. They got to live in houses
that were far beyond their means. Some even sold
out (in the nick of time) at huge capital gains.
And now you want to extend their profits at the
expense of the rest of us?

No thank you.

Tesha

[ixion]

4. we're going to have one whether they do or don't

but restoring the bankruptcy rules as they were before the Consumer Enslavement Act would certainly help things out.

[AngryAmish]

8. bingo!

[Greyhound]

9. Bingo! We have a winner!

The bankruptcy laws were put in place to prevent just this sort of thing. The aptly named consumer enslavement act (really good, is it yours?) was passed by the corporate shills for only one reason, to prop up the nefarious lenders and CC companies when the inevitable pop came. The result is essentially that citizens are relegated to the status of indenture even after they lose their homes. forced to make years of payments on a house that they have no interest in, enforcing the profits for the lenders no matter how ridiculous the original loan.

[ixion]

10. thanks... yep it's mine

feel free to use it as you see fit...:hi:

[Javaman]

22. Frankly, I have always believed that the feds knew that there would be

foreclosures, perhaps just not at this level, and that is why the bankruptcy bill was passed.

They wanted to protect the corps from losing money, not help people who were pushed into mortgages by predatory lenders.

as a result we have this colossal mess because of greenspan pushing this ever expanding never ending gold mind real estate fantasy.

just like any quick rich scheme the have nots will always jump aboard, because they are the ones always at the bottom of the pile and are trying the hardest to get out from under.

the "dream" of home ownership was just that illusion to them to rise above.

There will always be morons and get quick rich suckers, but I believe that they are a small percentage. (it's a scary thought to think if in fact they made up a large percentage)

I think the majority of people who are now on the hell end of the stick are people who are 1) low on the education ladder 2) never ever felt they had an opportunity to ever improve their lives 3) were cast aside as "that" part of society that are nothing but problems 4) have low self esteem 5) and are easily duped into thinking they can have a leg up via a by "just working hard for ones dream" and be like everyone else. To name a few.

The American over consumer public has been had. Period. Suckered into buying something they couldn't afford with no adequate escape valve. This was all in a quest to recreate "wealth" for the wealthy via hedge funds based on imaginary numbers.

Who is pissed? the rich. Who wants the bail out? the rich. Who condemns the poor as stupid? the rich.

What makes their anger clever though, is the fact that due to their greed and the over inflation of housing prices, everyone who is on a fixed rate and/or owns a home, gets pissed off at the poor for buying too much home or at the "on paper rich" who borrowed on their equity.

I own my home, am I pissed off that my housing value is dropping? To an extent, but I also see the larger picture. I didn't buy my home as an investment, I bought as a place to live for the rest of my life. prices fluctuate.

People who are losing value on their homes are under the belief that their homes are worth more than what they really are.

Person A buys a house at x price. person B buys a house a x price. If Person A bought his home at an inflated price but on a fixed rate mortgage, they are under the same delusion as Person B who bought theirs at an adjustable mortgage. They were both thinking that the price would go up endlessly and would be able to either cash out and resell at a profit or have a nice investment when it was paid off.

Either way, it's still the same situation. Both thought the price of their house was properly valued. However in reality, it was over inflated. So Person A gets pissed off at Person B because he loses value because first time or flippers are going bankrupt thus lowering the overall value of houses.

The larger issue at hand is this, we need to help these people who are in foreclosure. I love the argument that we are "rewarding" the poor. No, we are putting the brakes on the economy spinning out of control. Who we are rewarding now is the rich. Time and time again the fed keeps bailing them out. these are the tools that were hoping to benefit off the stupidity of the poor with their hedge funds.

In a society were tax break after tax break is given to the rich, this is just one more leg up for them. And increases the divide between the rich and the poor.

The poor have always struggled, but if we don't do something soon to bail these folks out, the gap between the rich and the poor will grow to epic proportions and the middle class will vanish altogether.

We have, as a nation, been so brain washed into thinking that the poor are always at fault and the rich know better, it is out right disgusting.

We are suffering from a grand illusion of what the difference is between propaganda and what is reality.

[TahitiNut]

12. The mortgage companies would LOVE to control the flow of foreclosures.

They're not looking for any relief for the homeowners - they're interested solely in staging the foreclosures so they can unload the properties they currently hold before they take over more. Their INVENTORY of properties is too large and they need time to unload them.

If it were merely a matter of precluding foreclosure, they'd renegotiate the mortgage with the current homeowners. They could rewrite the mortgage in terms of the CURRENT MARKET VALUE of the property and at a competitive rate ... essentially the EXACT SAME terms they'd have after foreclosing, evicting, marketing, and selling the properties. They'd be able to avoid the costs AND book the loss. But they're not about to do that. If they can get Congress to gin up some bizarre legislation that gives them all kinds of tax loopholes then they can laugh all the way to the bank.

[dysfunctional press]

20. re-writing mortgages at the current market value wouldn't be right or fair...

unless they are going to do it for EVERY mortgage holder- not just the ones who made irresponsible decisions and over-extended themselves- otherwise it's just rewarding, and therefore encouraging, that type of behaviour.

[Cronus Protagonist]

21. Hey, I want them to extend credit to me so I can buy a home on sub-prime too!

That way I can make out like a bandit when they hand out the free taxpayer cash.

[leftofthedial]

18. off the table

it would distract them from their real agenda

[karynnj]

19. some work done in the Finance committee to get some help in the stimulus package

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=273x145981

The Senate’s proposed $155 billion package - which has been criticized by President George Bush and some Republicans - faces a “tough fight” next week in Washington, said Kerry.

But if the bill passes and the bond provision survives negotiations with the House, about $10 billion could be made available to states for use as tax-exempt bonds to help homeowners refinance their subprime mortgages to lower-rate mortgates, Kerry said.

Some of those funds would flow to Massachusetts, where hundreds of homeowners could be helped in communities hit hard by recent foreclosures, such as in Brockton and Lawrence, Kerry said.

Thomas R. Gleason, excecutive director of the quasi-governmental agency MassHousing, yesterday praised the mortgage plan proposed by Kerry and Sen. Gordon Smith (R-Ore.).

The Kerry-Smith provisions would allow the states to cumulatively sell an additional $10 billion in federally-tax exempt mortgage revenue bonds - and some of those funds would flow through agencies like MassHousing.

“With the capital markets drying up, the increase in mortgage revenue bonds means there will be more money available for affordable mortgages, something we desperately need,” said Gleason.