Posted on 07/01/2009 11:22:54 AM PDT by unique
Today the US Treasury Department announced an update to allow refinancing of mortgages backed by Fannie Mae and Freddie Mac up to a first lein position of 125% of the home’s appraisal value. This is a level that was previously set at 105% loan to value.
This is guarantees more fraud, corruption, defaults, bailouts and on and on. It is Obama’s way to wipe out the middle class.
Wow. This is a really deep hole we’re in. I’ve got an idea. Let’s keep digging.
Next year's headline: Fannie and Freddie Ask for Another $100 billion bailout.
I’m trying to remember what this was called before Obama became President...
Oh yeah, “fraud”.
Barney Frank to the rescue.... we’re on a sinking ship folks...
Ok, here’s the deal...I want a 125% loan, then I want the government to immediately forgive part of the laon if I am “underwater”...
Fann & Fred going on an unlimited credit binge on the full faith & credit of the US?
People will end up being cotton and artichoke pickers. Artichoke fields smell awful.
I can’t read this sh*t anymore. Grab the handle and pull down....
I'm sure you are, and I sympathize with you in your situation. However, why is it my responsibility to help you refinance your loan? Has it become a right in this country to own a house?
yet the libtards will continue the "our dear leader inherited this" mantra.
Although I see your point, lots of those securing the 125% will default and the loss will be 30%-35% to the government which owns these entities - that’s a loss to all of us.
Handing out 25% more than the property is worth is welfare.
Actually, I’d walk away from the house - but, on the other hand - I wouldn’t buy the house in the first place.
Of course it isn’t your responsibility to help me, or others. I don’t have to refi, I would like to in order to save a couple of hundred a month in interest. I can afford the house either way, if I couldn’t i’d have never bought my screwball ex out of it. By the way, how does raising the cap to 125% cost you anything? As long as the borrowers don’t default,it will cost you nothing. If people with ARM’s, NOT ME, can refi to a fixed, there will be fewer defaults, costing everyone less. Allowing the high risk loans in the first place was the mistake. Also, the fewer forclosures the quicker the housing recovery. Values won’t improve with more and more empty houses on the market for lower and lower prices.
Why is it my responsibility to prop up the housing market?
I agree -Total Fraud-
Fannie and Freddie had about 70 billion in assets
AND 1.4 TRILLION IN DEBT-!!
that is what caused the current disaster-
GET ready for Round 2!!-
THE DEMONRATS ARE DESTROYING AMERICA!
“This is guarantees more fraud, corruption, defaults, bailouts and on and on. It is Obama’s way to wipe out the middle class.”
Actually, I think it’s his way of kicking the can down the road until after Nov 2010. He’s looking at the polls and they are leaning to big R pickups in congress. The CCI is way down this month, which means people are finally figuring out how grim things are despite all the media happy talk. That means the recession deepens from now til the election unless you can take a bunch of foreclosures and push them off until after 2010. It probably does anyway; but this smacks of desperation in response to the jump in treasury rates and home mortgages—the feds are losing control of interest rates.
Not a good situation if you want to keep 60 senate seats. Desperate times call for desperate measures and all that.
“Also, the fewer forclosures the quicker the housing recovery.”
This is part of the problem. Forclosures are not the cause of the problem, they are the cure. Most of the “toxic” assets need to be taken back and resold to someone that can pay the bills. Simple as that. The only entities that should lose in this deal is the lender who made a bad loan and the borrower that can’t pay it back. LEAVE ME THE HELL OUT OF IT!!
It’s not your responsibility, but it’s dragging things down. My house is worth about what I owe on it, no biggie, I’m not going anywhere. But the depressed market means fewer housing starts and really drags on the economy. The bad loans need to go, no doubt. But there are a lot of folks who can afford their house, but can’t refinance only due to the price drop. If they can get a better mortgage, all the better for the housing market which affects the overall economy. They will also have extra disposable income, also better for the economy. I am not avocating govt. subsidies, nor loans for people with bad credit and irresponsible spending habits. I simply point out that the loss in home value has locked a lot of people in and is stagnating the economy. Allowing up to %125 for people with good credit and appropriate income levels will help rid this drag on the economy.
“Actually, I’d walk away from the house “
Really, pretty damn irresponsible, how about paying for that which you committed to pay for? It’s people who are “walking away” but can afford their houses that are making a bad situation even worse.
If the 'homeowner' can't afford the current mortgage, how in the hell are they going to afford a 125% mortgage?
And if they somehow get such a mortgage, they can't sell. Unless they have the deficiency laying around in cash. And if they did, they wouldn't be in danger of foreclosure.
And watch what happens. Few 'homeowners' will be able to qualify for the new 125% so Barney Frank will fire off a letter demanding the underwriting standards be greatly lowered to allow more people to take advantage of the program to "save their home."
Bank on it.
This would be far better than the Taxpayers stepping in and paying thier mortgage or down payment which is what is happening.
By all means “walk away” you lose anything you had in the house the bank loses on a bad lone and I “the taxpayer” don't have anything to do with it.
“Walking away” just speeds the necessary foreclosure and speeds the recovery.
I will say it again foreclosure is the CURE not the PROBLEM.
That would be the 25% above the value. It's unsecured debt. The irresponsible will certainly dispose of it. The taxpayers will be left holding the bag on more bad debt.
Some foreclosures are necessary. But there are a lot of people who bought a home that they could afford, but they stupidly used an ARM, planing to roll into a 30yr fixed. The value plumitted and now they cannot qualify because you cannot get a 125% loan. The rate adjustment forces them to walk. If there credit is fine, doesn’t it make more sense to get them into a 30 yr fixed at current rates? The only thing in the way is the fact that values are off by 30%, 40%, 50%. Allowing foreclosure on people who want to pay for there home, without costing you anything is stupid. Damn, even the govt. gets that.
Not so irresponsible - just acknowledging a mistake.
I think a lot of people are misunderstand the 125% LTV for this program. The actual loan amount won’t be increased (except for closing costs), but more people will be able to refi and therefore decrease their monthly payment. For example. Someone owes $200,000 on their mortgage but the value decreased to $160,000 putting them at 125% LTV. They can now refi when they previously couldn’t but the won’t get 125% of the $200,000 which many are making it sound as if that is the case. The mortgage will still be $200,000 but at a lower rate.
“Some foreclosures are necessary. But there are a lot of people who bought a home that they could afford, but they stupidly used an ARM, planing to roll into a 30yr fixed. The value plumitted and now they cannot qualify because you cannot get a 125% loan. The rate adjustment forces them to walk. If there credit is fine, doesn’t it make more sense to get them into a 30 yr fixed at current rates? The only thing in the way is the fact that values are off by 30%, 40%, 50%. Allowing foreclosure on people who want to pay for there home, without costing you anything is stupid. Damn, even the govt. gets that.”
Nope. First off, the reason these people chose an ARM is they could not afford to buy in the first place. They planned on the value of the home going up and their income going up. At that time they would refinance to a 30 year fixed. Alas, the real estate market does not always go up and they find themselves stuck in an ARM that in reality THEY COULD NOT AFFORD.
Sorry man, there is no way to argue this. The terms of ARMs were stated up front and in writing. You say these borrowers want to pay for their homes. Fine! then why don’t they pay for them? If they want to pay it’s real simple, MAKE THE PAYMENTS! The value of the home has nothing to do with it.
Bottom line is either the borrower needs to make the payments or the bank needs to take these properties back and resell them. It’s the banks loss not the taxpayers.
“I think a lot of people are misunderstand the 125% LTV for this program. The actual loan amount won’t be increased (except for closing costs), but more people will be able to refi and therefore decrease their monthly payment. For example. Someone owes $200,000 on their mortgage but the value decreased to $160,000 putting them at 125% LTV. They can now refi when they previously couldn’t but the won’t get 125% of the $200,000 which many are making it sound as if that is the case. The mortgage will still be $200,000 but at a lower rate.”
No I think most get it very well. Taxpayer money is not to be used to guarantee EXTREMELY risky loans. These are borrowers who were so irresponsible they signed a mortgage that they knew at the outset they could not make the payments when the rates “adjusted”. Now you are in favor of the taxpayers co-signing on unsecured loans for people that have shown they should not have been buying in the first place. Have you not heard these owners deciding if it’s worth it to make payments on their home when the home is not worth anywhere near what they paid for it! It’s going on all the time in CA. These guys will take the %125 refi on a bet the property value will go up and if it doesn’t THEY WILL STILL WALK AWAY.
Many of these crazy %125 loans will still go to default and guess who is left holding the bag now. Sorry I’m not into bailing out banks that make stupid loans and making other peaples mortgage payments. Either way you look at it that is what is going to happen in a huge percentage of these cases. The ones that truly want to keep the homes they bought and are willing to pay for them should simply make the payments on the terms they agreed to. Then maybe down the road the property value may go up and they can refinance. This is how life works.
Plenty of people chose ARM’s because of the 1% interest rate, leaving them more money to spend on imported chinese crap and big screen TV’s. They got caught with their pants down. They are making their payments just fine now, but not when the payment doubles in 2 months. refi them and there’s no forclosure. My girlfriend has a relative facing this, having her townhouse forclose because of a bad decision and sudden decrease in value seems rather pointless to me, and it won’t cost you a penny. They want to keep it and can easily afford it at a reasonable interest rate.
“Plenty of people chose ARM’s because of the 1% interest rate, leaving them more money to spend on imported chinese crap and big screen TV’s. They got caught with their pants down. They are making their payments just fine now, but not when the payment doubles in 2 months. refi them and there’s no forclosure. My girlfriend has a relative facing this, having her townhouse forclose because of a bad decision and sudden decrease in value seems rather pointless to me, and it won’t cost you a penny. They want to keep it and can easily afford it at a reasonable interest rate.”
As I stated, the terms of these loans were upfront and in writing. The fact remains nearly everyone that chose an ARM did so because they could NOT afford the payments under conventional finicing. There are always exceptions but the exceptions are going to be rare.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.