Posted on 09/25/2008 8:39:31 AM PDT by milwguy
In addition, Frank wants to make it easier for bankruptcy judges to modify the terms of "nontraditional" mortgages -- such as those that start with low interest rates that later reset to higher ones -- to make them easier for homeowners to afford.
Such a move, which would partially reverse a tightening of bankruptcy rules approved by Congress only two years ago, is adamantly opposed by the lending industry.
Frank and fellow Democrats also want the administration to declare support for a new economic stimulus package atop the $100 billion in tax rebates sent out earlier this year. Such a package, however, would be handled separately from the bailout legislation.
(Excerpt) Read more at latimes.com ...
The law of unintended consequences here will be huge. Why should those of us who followed the rules, who made their payments not get the same deal as the least responsible among us? We may as well stop paying for our houses and petition the court for better terms as well.
This bill is a scam being foisted on the American people, and rewards the bad, while punishing the good. This is not capitalism, it is another step towards socialism, with the gov't taking from you and I and giving to those it deems more in need.
Disgusting
It also threatens solvent institutions by incentivising people with adjustables to declare bankruptcy.
Is that what the Stimulus package Pelosi is talking about is going to be?????????
I do agree that people should be able to have a judge look at the terms of a mortgage. I know how the process works and the flutter of paper, the reassurances to the buyer and sometimes outright lies. Barney’s idea is horrible but I doubt it if any one who was selling and profiting from ARMs emphasized the danger to the individuals involved. I don’t think they should be bailed out unilaterally but many of the people who had these ARMs did indeed pay their mortgages until they grew to the point that they had to choose between no paying them or buying essentials. Banks would be more cautious granting these horrible loans if they knew they could be reviewed by a judge.
Salomon Smith Barney Frank, We make money the old fashioned way.....WE PRINT IT!.................
If this is what he wants to do, reset everyones interest rate to 5%.
Two Words:
worse...it gives the judge the ability to set the terms. Who knows what some bankruptcy judge in New Orleans is going to do for his neighbors? 3%, 5%, 7%????
Do Something, but not THIS something - the vast majority of conservative commentators, true conservative legislators, owners of successful and well managed banks, and objective economists. And me.
Do the Paulson Plan Right Now - George Bush, Ben Bernanke, Hank Paulson, Chris Dodd, Chuck Schumer, congressional Democrats in general, and people who have profited/intend to profit from the leverage/derivatives shell game.
Awful, awful, awful. Sixteen years ago, I bought my first home FHA. Six months later, I lost my job and I was a single parent. I had an ARM that went up every year. I was out of work for two years and never was late on a payment. I just lived very, very simply.
Then the same judge could decide the homeowner got too good of a deal and should have to pay a higher interest rate.
Let’s extend the idea to car loans, the dealer is going bankrupt so a judge can rewrite all the sales contracts and raise the prices of vehicles retroactively until the dealer is solvent again. Sound like a way to right the wrongs of too generous deals.
Let’s see. I refinanced twice since I obught my house in 1998. I currently have a 15 year mortgage at 4.875%. I spend less than 12% of income on mortgage. I understood the terms when I signed the paper, and have little sympathy for those who used their house as an ATM and now cry foul about their interest only ARM’s.
If a bank wants to redo the terms, it should be their decision, not a judge who decides.
great analysis. Count me in the second group. Don’t know how to field dress a moose yet, and a poor shot as well.
For some years we have had the poorly named “earned income tax” which is outright stealing from the productive at the point of a gun. The money is redistributed to the working poor. Usually poor with a number of children.
Where was our outrage?
57 million Americans can vote on who will lead this country, yet they have zero income tax. It’s like walking into a Microsoft shareholders meeting and telling them how they are going to run the company when you own no stock.
Where was our outrage?
I have a 5.8% 30 year fixed....so I can default and get it re-set to 5%...great...
The other alternative is foreclosure and the government buying these defaulted mortgages at too high a price to bail out well connected people. This might actually be worse in my opinion. If we cannot force the lenders to renegotiate with the buyers, the best possible outcome would be for the government to buy these mortgages at low cost (ten cents on the dollar) and resell them at a better time. Do you agree?
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