Not So Fast on the Deal, House GOP Says Make Wall Street Pay

U. S News and World Report ^ | September 25, 2008 | Paul Bedard

[dickmc]

House Republicans, who've been swamped with your phone calls demanding that they reject President George Bush's historically huge $700 billion bailout of Wall Street and bad mortgage bankers, have come up with another idea:

[shadowgovernment]

“Yes, I think that the original Paulson plan is better also. “
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I would like to know what” Unions rep on bank boards” has to do with Original Paulson plan..lets get this strait the
pols have added so much to this plan that it is not going anyware..you nor I know all the crap they have added so how can you defend it??

[SirJohnBarleycorn]

The original Paulson plan did not have that provision you are talking about or any other of these Christmas tree ornaments the Rats are piling on to it.

[JSDude1]

No we need to reject this plan as well as it is socialism, just to a lesser degree. WHy don’t we just try some of Newt’s fiscally responsible and free-market solutions which would inject private capital into the market..?

[shadowgovernment]

“Christmas tree ornaments the Rats are piling on to it.”
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right, this plan from the get go is flawed..The sec can change the mark to market rules tonight and much of this goes away..this value of CDO’s based on forecloseure rates is what is bringing down the system..the mark to market change would cost the Tax payer nothing and would not enlarge the FED GOV..if you are for the Paulson plan you are defacto a socialist.

[SirJohnBarleycorn]

I agree with you on the mark-to-market rule which helps but that by itself IMO wouldn’t be nearly enough of a change to reverse the ongoing credit contraction to businesses.

[shadowgovernment]

“agree with you on the mark-to-market rule which helps but that by itself IMO wouldn’t be nearly enough of a change to reverse the ongoing credit contraction to businesses.”
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credit contraction is result of capital required by Feds to be in banks,,,that could be lowered ..my point many other options exist that would not involve more Government ownership of private co’s..Socialism (via law and gov run
fanny and Freddy) is what caused this and it surly is not the cure as the paulson plan is just that socialism with capital S.

[Zeddicus]

If one of the major problems is people defaulting when their ARM goes into float mode, then why not do this: make as part of the bill a stipulation that mortgagees simply be allowed to convert their ARM to a fixed, at a specified current rate (say, 5%)?

Simplify the process it so there is no complex closing or heavy associated fees; just change the terms.

I know this is possible: I bought our current home in 2000 (got a good deal too, we're nowhere near upside down even with the drop in values), with a 5/30 ARM. As interest rates have declined over the years, our mortgager (HSBC) has voluntarily both lowered the fixed rate and extended the period at which the rate is fixed, twice. We're now in our 9th year with a fixed rate, currently at 4.625%.

They offered this reduction and extension of the fixed period without me even asking, and it took nothing more than signing a letter of acceptance and small one-time processing fee.

Say what you want about ARMs, but this deal has saved us many thousands over the years vs. what we would have been paying had we initially financed with a 30 year fixed in 2000.

Offering this would enable folks who are on the edge but have otherwise been making their payments to continue doing so, but doesn't completely bail them out for property devaluation. I don't believe in rewriting the loans for a new, lower valuation - buying real estate is a gamble and you have to take the good with the bad.

Seems like a workable compromise that will reduce the number of mortgages that go bad, while not really costing anything.

[Ol' Dan Tucker]

Only if your boy DINGY or Miss America put it in there. FHA and VA will not lend to anyone who is not either a citizen or a permanent resident alien. No bu!!sh!t Tax ID numbers Se Hablo Espanol, No Credit Check stuff. That is why I say, if its an insurance program, that means that there will have to be criteria, guidelines, and a underwriting process to get the insurance.

I'm not sure to whom you're referring, but I'm a fan of very, very few folks in DC, least of all, Bush. This includes all the democraps and the vast majority of republipukes.

Does this insurance program only cover FHA and VA loans? Or, does it cover loans to so-called low-income minority homeowners, a.k.a.: Mexican illegal aliens.

You see, it was Bush to actively sought to change the banking rules to allow Mexican illegal aliens to obtain US banking goods and services in the first place.

In an auction situation, you will potentially have clowns in wall street taking two good loans and showing those to the fed and bundling 98 bad loans and auctioning it off. If there is insurance, someone with capital, like a buffett, takes the risk, and we only pay on a default.

Who defaulted on their loans? Do you have demographic data that shows the break-down of the defaults to date, such as whether the loans were US ID and SSN or ITIN and Matricula Consular as well as the percentage of both for all lenders who would be taking advantage of this insurance program?

I ask only because you said earlier that we should flood DC with calls to support this program, but I want to make sure of what I'm actually supporting before I make any calls.

[Maelstorm]

Sounds better than the alternative. The other one was just another of Bush’s blank checks where no one could question anyone about how they spend the money. How in the hell did he think anyone would fall for that crap again? Does he think he is special? This is an opportunity to break from Bush and Leave the Democrats holding his hand. It is long over due. It was his big spendign compassionate conservatism that left the GOP in a shambles as fiscal restraint went out the windows as he forgot how to use his veto.