Posted on 05/19/2008 5:52:08 PM PDT by Bishop_Malachi
A bailout that wouldn't cost you a dime There's a way to keep buyers in their homes that's simple and fair, but lenders have persuaded Congress to set it aside.
By Liz Pulliam Weston Congress is considering a plan that could prevent foreclosures for about half a million homeowners. The legislation, which passed the House earlier this month, would do the following:
Allow strapped borrowers to refinance into more-affordable, federally guaranteed mortgages.
Aid only homeowners, not investors or speculators.
Require those homeowners to split any future home profits 50-50 with the government.
Cost taxpayers an estimated $1.7 billion, according to the Congressional Budget Office.
That price tag isn't as hefty as it seems when compared with how much the rest of us could lose because of foreclosures. Homeowners who keep their houses, but who live in areas where foreclosures are rising, are expected to lose $356 billion in home-equity wealth in the next two years as neighborhood foreclosures whittle away at the value of their homes.
(Excerpt) Read more at articles.moneycentral.msn.com ...
Oh Really? Tax-payer-guaranteed mortgage loans? Why that sounds like...nah...couldn't be socialism could it? What gets me is the title of this woman's article.
This woman is a complete moron: such a scheme would encourage bankruptcies....which ends up costing everyone who doesn't file bankruptcy.
The problem is that these people are upside down in their homes. They owe a lot more than the homes are worth and more than the homes are going to be worth in the foreseeable future. The smart move for many of them is to simply walk away and take the hit on their credit.
This scheme is a way to unload the bad properties onto the Government. Also splitting the future profits 50/50 is another incentive for the homeowner to walk.
Government for profit? Hello 4th world backwards crap hole.
The low down pmt. loan for the first time home buyer has really allowed most people to get on the ladder. The bankruptcy idea would simply destroy that. The borrower would have NO incentive to make payments and ride it out. So, if the lender just about knows that the borrower will screw them, they will not make the loans.
Second, there will never be any profits to split. IF the value ever gets to be at the mortgage value, they will refinance out or sell then. Why wait for Uncle Sam to get part of your house. Also, if you believe that there is mortgage fraud now, put in that system that the buyer and seller have to “certify” what the actual selling price was so that Uncle Sam can get a check. Only a loon would believe that it could work.
All very Good points.
It simply boils down to the government buying up all of the bad loans and bailing out the lenders in full. Can anyone say campaign contributions?
The next stage in lending would then be the lenders paying people to take a loan, with the lenders knowing that the entire amount would be guaranteed by the government.
If a bank makes too many bad loans it should go out of business.
If anyone should absorb some pain it should be the Rating Agencies (Moodys', Fitch etc).
Nice job guys. Every single day these fools come out and downgrade securities they had previoulsy rated.
I’m waiting for taxpayer-guaranteed credit cards.
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