It's not necessarily their fault if they suddenly owe 5% more than their home is worth, subby- but then I suppose it's hard to put nuance into a greenlightable headline.

Make it so mortgage holders pay the principal plus interest like they normally do on the value of the home, but interest only on the land. The government then holds title to the land, plus any rights (water, mineral, whatever), and the homeowner pays the equivalent of rent for the land.

Their monthly payments are lower, but they don't get a windfall later on if the price of land rises.

The article is a little vague regarding how this program actually works. If the homeowners are allowed to refinance the home at the new perceived market price, then it stinks in the sense that we, who pay taxes, are taking a hit (the difference between the present mortgage amount and the refi amount.) On the other hand, if they are refinancing the original amount at a lower rate, then this will help stave off further foreclosures, not all, but some.

The article does speculate that at the present rates, it might not make sense to refinance for some people. That is true if you have a mortgage at 6-6.5% I think that many of the people who are in trouble had one of those of what I call "voodoo" mortgages that went from 4% to 8% after the original "Hot sale" period.

"It's great. It's good news," says Lawrence Yun, chief economist with the National Association of Realtors. "Many homes are way deeper underwater.


I find this quote amusing. When the home market started heating up, Realtors had no problem advising homeowners to sell 200K homes for 500k and then hooked buyers of these overpriced shacks with these "marvelous" mortgage brokers who financed the 500k homes with the now famous "poison mortgages." And not a peep has come from them saying they should have seen this coming. Now they are on TV saying that this is the time to buy. Hypocrites.

DrSandyBeech: Now they are on TV saying that this is the time to buy. Hypocrites.

Realtors always say it's the time to buy.

Housing prices are rising: "It'll never be as cheap as it is right now to buy a home. Prices will keep going up and up. It's a great investment!"

Housing prices are falling: "It'll never be as cheap as it is right now to buy a home. Prices will soon start going up and up. It's a great investment!"

Obama expands assistance to poor decision makers


Poor (decision makers) or (poor decision) makers?


I suppose it could be both.

Obama's going to start helping republicans?

DrSandyBeech:

Lawrence Yun, chief economist with the National Association of Realtors.

Yeah, this guy should be tarred and feathered.

I agree with FoxNews on this. Let the banks fail, let the car companies fail, let the homeowners lose their houses, let the states go bankrupt then round up everyone with nothing and nothing to do give them a day to learn how to use an automatic rifle and send them to Iran.

Englebert Slaptyback: Obama expands assistance to poor decision makers


Poor (decision makers) or (poor decision) makers?


I suppose it could be both.

Both.

sgilman: Obama's going to start helping republicans?

I was thinking John McCain specifically. Oh, and Sanford.

Expands?

Penis

I'm 50% underwater in my house. I have a fixed rate and can still afford the payments so I'm not going anywhere though. Maybe in 5-7 years I'll be even (between what I pay down on the principle and the small increase in home values).

The plan only allows you to refinance, it doesn't adjust the total amount due to the bank. Taxpayers shouldn't see an hit at all due to foreclosures because the mortgages in question are already backed by freddiemac/fanniemae so you're already on the hook. Just the impact of the government refinancing the loans (administration costs).

Banks?

sgilman: Obama's going to start helping republicans?

Done.

No real problem with this as long as its your primary residence. Way better for people to keep living there, paying on the property and upkeeping it then having everyone who is underwater simply walk away and let the banks manage the mess.

I'd way rather they throw billions at THIS problem then letting people who managed to run up $60,000 in credit card debt keep being a financial moron.

Won't somebody think of the realtors?

I'm $20k in debt for my wife's teaching credential, which she can't use now that we've turned our schools into low-rent zoos. I can haz bailout now?

subby.... you forgot one key phrase from your headline there... "Thanks to the 69,456,897 poor decision makers that put this disgrace into office."

ragekage,

It wasnt my fault that my Worldcom* stock went to zero**, but that doesnt make my decision to buy any less poor.

Its possible to be both a "poor decision maker" and "not at fault".

Part of making decisions is calculating what idiotic decisions other people will make.


*going old school
**close enough

boobsrgood: I'm $20k in debt for my wife's teaching credential...
Come to South Dakota, she can make that in a year as a teacher.

Being a poor decision maker himself...he apparently has sympathy for other poor decision makers.

This is like watching the meticulous five year old open presents on his birthday.

Yay! My tax dollars go to fund the people who priced me out of the market.

What's the point in voting anymore? It's PMITA either way, but at least we get to choose the lube. Go America!

This is like watching a slowly declining senior citizen butter a pillow.

Snarfangel: Make it so mortgage holders pay the principal plus interest like they normally do on the value of the home, but interest only on the land. The government then holds title to the land, plus any rights (water, mineral, whatever), and the homeowner pays the equivalent of rent for the land.

Their monthly payments are lower, but they don't get a windfall later on if the price of land rises.

Oh, I'm sure that would go over really well with the GOP. In fact, I'm not sure that would go over well with anyone, considering how tightly property ownership has traditionally been applied to the American Dream for so long.

vernonFL: DrSandyBeech:

Lawrence Yun, chief economist with the National Association of Realtors.

Yeah, this guy should be tarred and feathered.

I'm not singling out Mr. Yun. I am pointing out what he is saying as a representative of a group that is supposed to know about the real estate market. A group, collectively, that should have counseled their seller clients about realistic home prices and vetted the mortgage brokers they recommended to buyers. Unfortunately they were blinded by the "6% commission on a 500K home is better than 6% on a 200k home" syndrome. Once the home was sold and the buyer was hook, lined and sunk by the 5/1 arms and 80/20's and 120% mortgages, they gave a fark what all that was going to do to the market. Now they are concerned that the "homes are deeper Underwater." Well DUH, they helped create that monster and have never expressed any type of concern that their memebrs dropped the ball.

I'm not trying to blame it all on the Realtors. But if we are going to blame the homeowners for being irresponsible (and many are, especially those that bought more home than they could realistically afford), The banks for offering crappy loans and crooked mortgage brokers, They should also be included in the long list of those that participated in this fiasco. Instead they stand around quietly looking around to see if no one notices them and forces them to come clean and accept some of the blame.

Hopefully they did notice and will work with their members to be the professionals home sellers and buyers perceived them to be.

Funny, considering that the government of the previous 8 years specialized in placing poor decision makers in important posts and then lauding praise on them when they fark up royally.

Do I like the fact that tax dollars are going to help people who got themselves sucked into a black hole of debt? Of course not, especially since the money is eventually going to crooked lenders, but it's a hell of a lot better than the consequences of throwing all those people out on the ice. If reincarnation was real, then these people could just kill themselves and come back to try life again, this time reading the fine print. But it doesn't work that way, and most people won't just crawl into a hole and die because society decided they were too expensive to manage. You will have to deal with them at some point.

Thank goodness we re-financed at 4.625 and the end of May. We were not 'underwater'. In fact our house was worth a lot more than I thought it was going to be given the current state of the market. Its just goes to show how screwy the economy is when there are people who are, for whatever reason, loosing their home and we are saving $500 a month because I was actually paying attention to mortgage rates in April and May.

//Thanks Obama??

jaymzz: Yay! My tax dollars go to fund the people who priced me out of the market.

What's the point in voting anymore? It's PMITA either way, but at least we get to choose the lube. Go America!


THIS. I'm so farking pissed off at my fellow leeches, excuse me americans, right now that I may root for N. Korea next round. I don't want them to win but if about half of you farks would just die and stop taking my money I'd be cool with it. you lazy, irresponsible twats.fark you.

Wait, I thought this was about Wall Street

But I wanted a big house.

/time to rid the world of the parasites

Of course he did. They're the bulk of his constituency. It's compensation for voting for him (as if easing of the white guilt wasn't enough).

sgilman: Obama's going to start helping republicans?

WIN

125% LTV?

Well, I guess it's not their bad loans have caused any problems so far......

Obama's gonna pay for my gas and my mortgage.

So many in this thread are happy about more of their tax dollars blowing out the door?

schadenfreudian: Of course he did. They're the bulk of his constituency. It's compensation for voting for him (as if easing of the white guilt wasn't enough).

But if you think about it, it means that voting for him got them results. Unlike most Republicans with their candidates.

Got nothing; got nothing to lose.

/Negative net worth.
//Student loans FTW.

Ok, Just because the house is worth less, their original loan terms haven't changed. If they could afford the payments when they got the loan, they should be able to continue affording them now. Unemployed? Plan for it. Save money. Don't overextend yourself, stupid.

As for the Boobies on this thread where some retard says it's not the owner's fault the house is worth less than what they owe, guess what? It's not my fault either, Why the fark should I pay for it for them? I have my own farking mortgage, thank you very much.

Fark Obama and fark you idiots who voted for him.

DrSandyBeech: "If the homeowners are allowed to refinance the home at the new perceived market price"

They're not. The program allows people refinance what they owe. The thought is that people are trapped into ARM rates that are ballooning and if only they could refi to a fixed rate, they could afford to stay (which has been shown statistically false over the last nine months.)

The government intervention is necessary to achieve that, because no (reputable) bank would refinance an underwater mortgage under normal conditions, let alone Current Economic Conditions.

The hit the taxpayers take, is the few grand the banks get as a straight-up 'gift' for refi 'costs' and the few grand that the government kicks in toward the mortgage holders principle.

They're extending the program limit from 5% to 25% under, as almost no-one took advantage of the original program; because if you were only under 5% you probably weren't going to benefit from a refi.

But the government has a lot of earmarked money sitting around 'to help people' and fark if there's a government agency on the planet that isn't going to spend every last penny of their allotted funds.

It was much better when Bush and Obama were giving hundreds of billions of dollars to poor decision makers who RAN BANKS.fark the consumers! They're only responsible for the economy moving at all!

Mentat: Snarfangel: Make it so mortgage holders pay the principal plus interest like they normally do on the value of the home, but interest only on the land. The government then holds title to the land, plus any rights (water, mineral, whatever), and the homeowner pays the equivalent of rent for the land.

Their monthly payments are lower, but they don't get a windfall later on if the price of land rises.

Oh, I'm sure that would go over really well with the GOP. In fact, I'm not sure that would go over well with anyone, considering how tightly property ownership has traditionally been applied to the American Dream for so long.

This wouldn't be a program for every home buyer, just those who have chosen...poorly.

Just to play a bit with numbers, let's assume someone purchased a home for $400K, $200K for the land and $200K for the improvements, and has paid $50K so far on the principal. If the value of the land drops to $100K, they owe $50K more than the property is worth.

If we insist the government does something to help the poor person (for whatever reason, whether out of sympathy or out of some economic argument), the government can take over the land, move the $50K principal to the house itself, and then rent the land back. The homeowner now owes $150K on a $200K home, so he's not as likely to abandon it. Since the land is now worth $100K, the government charges an appropriate rent, the equivalent of an interest-only loan on the new, lower value.

The mortgage payments are now more affordable, but if the neighborhood becomes suddenly more desirable -- say the land raises in value to $300K over the next few years -- the government is the one that benefits from the windfall, and not the homeowner that required a bailout.

After all, the American dream shouldn't be to socialize losses and privatize profits.

i love being a renter.

purple helmet: Ok, Just because the house is worth less, their original loan terms haven't changed. If they could afford the payments when they got the loan, they should be able to continue affording them now.

RIGHT! So why do they need government assistance and where is this money going?

purple helmet: Ok, Just because the house is worth less, their original loan terms haven't changed. If they could afford the payments when they got the loan, they should be able to continue affording them now. Unemployed? Plan for it. Save money. Don't overextend yourself, stupid.

As for the Boobies on this thread where some retard says it's not the owner's fault the house is worth less than what they owe, guess what? It's not my fault either, Why the fark should I pay for it for them? I have my own farking mortgage, thank you very much.

Fark Obama and fark you idiots who voted for him.

This.

If you are upside down on your car, your wedding ring, or any other asset, it's your own damn problem. House is no different. Save, put more money down, don't take out loans - nobody is forcing you. Live within your means. There are $30K houses out there - anyone can afford these. Leaches.

RIGHT! So why do they need government assistance and where is this money going?

Acorn and the Black Panthers.

Currently, homeowners who owe 5% more than their homes are worth can refinance mortgages through Fannie Mae and Freddie Mac, part of a two-pronged approach to reduce the rapid-fire pace of foreclosures.

They just want as many people as possible under Barney Frank's control.

/ewwww

Ok, so Obama is going to pay my mortgage now like I was promised? And how about the gas for my car? Oh yeah, and when do I get my middle class tax cut?

toonz: jaymzz: Yay! My tax dollars go to fund the people who priced me out of the market.

What's the point in voting anymore? It's PMITA either way, but at least we get to choose the lube. Go America!



THIS. I'm so farking pissed off at my fellow leeches, excuse me americans, right now that I may root for N. Korea next round. I don't want them to win but if about half of you farks would just die and stop taking my money I'd be cool with it. you lazy, irresponsible twats.fark you.

Cut back on your earning, and enjoy some free time. The more you earn, the more these assholes get. Working hard to get ahead only makes you a feast for the parasites.