Posted on 11/06/2008 9:19:19 AM PST by BGHater
Oh goody. This will stabilize things. Let’s put people who can’t afford their mortgages in 40 year terms at 3%. Hell, why not put them in 80 year terms? Why don’t we just PAY them a salary to live in their homes?
It appears that Governor Schwarzenegger has never heard of the Fifth Amendment.
The banks have a property right to foreclose on people who do not make their payments, and the government has no right to interfere that contractural right without giving the banks “just compensation” for the taking of their property for those 90 days.
I predict the gov will strong arm banks to rewrite ARMs into fixed rate mortgages at the rate the borrower first had. This will help folks that can no longer afford the loan after the ARMs adjusted higher.
OC Register - Nov 6, 2008
40 years...that’s a long time.
Can I get the same deal? Man, that stinks! I feel disenfranchised and taken advantage of by my lender who sold me something I could afford.
The 90 days will come and go, and people who are in over their heads in debt will still be with us, still living in houses they can’t afford. Meanwhile, the government will figure out how to loan debtors more money to help them get out of debt.
Resetting ARMs to fixed won't be attractive to those who owe much more than the house is worth, which is the majority. Getting to live rent free in a nice house they can trash and loot, and not having to pay property taxes or homeowners dues, is too attractive to pass up. In some states the foreclosure process can take 1.5 years.
Really you want neighbors that have at least 20% equity, not those just scraping by. Those with no equity aren't going to improve their property for the bank's benefit. Speeding up foreclosures to get this bubble over with will get the construction industry and economy restarted faster than letting things go downhill for a long time.
Translation - Another 90 days of free rent for those that haven’t paid rent for 6 months.
“Gov. Arnold Schwarzenegger on Wednesday proposed a 90-day freeze in government spending.”
“Speeding up foreclosures to get this bubble over with will get the construction industry and economy restarted faster than letting things go downhill for a long time.”
I think the fear is that as the bubble is deflated, there would be a domino effect on people not yet in trouble or sitting on a bad asset. That may be why the gov wants to take a more measured approach and try to prop up the situation. My fear is the government will over react and try to fix other concerns under the guise of this mess, like healthcare, college loans, or whatever.
If people are rightfully put out of their (bank’s) houses, what will the result be? Will the mortgage holders just spitefully burn down the house? NO. Will Warren Buffett buy them all to warehouse his money? Not likely.
Other people who can afford those house will buy them and move in. Net result: no change. People will be living in those houses. People who can afford them. Ans house prices will settle to real level rather than pretend level that bad lending practices created.
Is that really better though. The banks are taking 20%+ hit either way, so they can work with the current owner or take the hit with a new owner. I know each case is different and my understanding of this part of the economy is very basic as best, but it just seems that less damage is done somehow salvaging the current homeowners. Granted, each case is unique and some may not be salvageable.
You will someone will need to pay the maintenance.
You will someone will need to pay the maintenance.
Laws in caliornia are like mud flaps on 747 (useless)
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