Posted on 08/23/2007 8:54:39 AM PDT by Hydroshock
About 2 years ago a neighbor of mine got those tersm for his house, he served in the 1st Gulf War.
You never hear from the MSM that the subprime loan defaulters comprise less than one half of 1% of all mortgagees.
Agenda, anyone?
Get a time machine and go back a couple of years. Or wait long enough and it will come 'round again.
So now our money goes through a third party called the Neighborhood Assistance Corporation of America and is no longer 'taxpayer money' but RESCUE money!
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I can't speak for other FReepers, but I'm sick and tired of government taking a chunk of what our family earns every year and then hiding the theft behind feel-good catchphrases.
Why should we have to rescue people from their own bad decisions?
The percentage doesn't exactly matter - it's the damage their existence is doing to the financial institutions that created all of thosee bizare CDO's backed by subprime mortgages. Even a small but larger-than-expected default rate could end up taking down some huge firms, as it becomes evident that they were peddling products based on false assumptions.
When everybody is borrowing prosperity from everybody else, one broken link in the chain can set off a catastrophe.
I didn't ask about this particular program, I asked about your views, motivated by your earlier comment. You're evading the question, which is of course your right to do. But please don't put words in my mouth. Thanks.
What bailout with low interest rates? The yield curve was inverted for over a year. That means rates have been too high. They should come down to be in line with market rates.
Only very slightly inverted, i.e. nearly flat. By the way, the yield curve is not almighty and it's not hard science. It is merely an indication as to how the market feels things will shape up. The market is used to the Fed cutting rates, the market saw the housing bubble about to go pop, the market (unreasonably IMO) expected inflation to remain very low, ergo the market had expectations that the Fed would cut rates, hence the (slightly) inverted yield curve.
Put yet another way, in the "finance theatre" comprised of pseudo-markets presided over by central banks, the audience (investors) watch the actions of the actors (Fed) and make judgments based on past history and perhaps unrealistic expectations. There's your "yield curve".
On the other hand, the real cost of using money is about 3 percent plus inflation; this I am told has been a constant for thousands of years. Inflation has been running about 2%, so rates at about 5% seem sane to me. A rate cut "to get the economy moving again" would be really dumb (ie inflationary), IMO. Note that the Euro central bank as well as the Japanese are contemplating interest rate INCREASES, even in the teeth of the credit crunch. My guess (hope?) is the Fed will also do the sensible thing and let the financial markets sort themselves out without rewarding the stupid greed of the financial industry with an interest rate "bailout".
By the way, the PRODUCTIVE class (i.e. manufacturing corporations) by and large have healthy balance sheets, great cash flow, and lots of cash on hand.
Been there, done that. The rates aren't any better, but if you can afford the payments you can get in for no money down. Even without a seller concession a few thousand in closing costs can get you a house.
And then get moved in less than 2 years and struggle to sell your home... Not everyone in a panic to sell is selling because they got too expensive a home or because they chose the wrong kind of mortgage. Some of us just miscalculated our ability to sell our houses at all.
My comment was based on the comment I was responding to, or do you have trouble with the obvious?
“I’m of the opinion that most folks who took those loans had the intention of flipping their house for profit in short order and were not concerned with interest and such.”
Exactly.
“Easy Money” will get you every time.
Sorry, I misunderestimated you. From your posts on other threads, I thought you had the ability to articulate a position, discuss an issue, as well as some knowledge of financial topics. My bad, guess I was wrong. I’ll leave you alone now.
This paper has no value to anyone except the liquidators at $.10 on the dollar.
The Fed is holding its breath that this does not happen en masse because it is in the hundreds of trillions and we will be back in caves.
BUMP
In 1978 I would have drooled over 5.75% fixed. Then it was 11-13% FIXED!
Corporate Tax Loopholes, Savings & Loan Bail-Outs, Pharmacuetical Legislative Protection Racket, Auto Industry Bail-Outs..., just what are you complaining about?
And you're so right, it is pathetic, and no way reflects the basic principals on which this country was founded, namely fairness, equity, and government accountability, which is who your complaint should be addressed to.
The HOPE hotline (888-995-HOPE) does not offer bailouts, but does offer objective third party counseling. Over half of all borrowers who fall behind on their mortgages never even call their lender to try to work something out. The HOPE counselors have dedicated contact people at all the major loan servicing shops and can get people to face up to their problems sooner and work them out with the servicer. It is a really good program.
Actually, somewhere in the neighborhood of $50 billion is resetting this month. And Next, and ...
There are some, few, credit services organzations that can help after the loan and before the adjustments.
The borrower needs to start as early as possible and do the right things - and not be so far gone that the timeframe isn’t reasonable.
But for some, increasing their scores is possible and can have a sizable impact on being able to afford keeping their home.
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