Posted on 10/08/2008 2:16:46 PM PDT by goldstategop
If you couldn't tell from my post below, I think the McCain housing plan is a disaster. It's Dodd-Frank on steroids. I didn't get the chance to ask any questions in the conference call earlier, but here is what was one my mind:
1. Why are you replicating the Dodd-Frank legislation bailout in your plan? Their plan gave $300 billion to FHA to guarantee failed mortgages. It passed in July. Shouldn't we give that some time to work?
2. Why does your plan empower the Treasury Secretary to buy up these failed mortgages and renegotiate them? Shouldn't that power be given to an existing housing agency, like FHA or HUD?
3. How does the program decide which mortgage holders to help? About 27% of US households have paid off their mortgages and 32% of households rent. How can you ask responsible borrowers and renters to pay for this program?
4. Many people cashed out equity and have now carry second mortgages, will second mortgages be eligible?
5. Does the Senator think that the original TARP program does not need the full $700 billion? If so, wouldn't it be better to return this $300 billion to deficit reduction?
6. There's no evidence the housing market has bottomed out yet. What if housing prices drop another 15 or 20 percent after their mortgages are renegotiated and the homeowners are under water again?
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
“Resurgenance?” WTH is that? Oh never mind, with a name like that, it’s got to work!
So if someone paid $300K for a home which is now worth $210K the government pay the $300K for the house and the owner rebuys at $210K and “We the people” get to pay for the lost $90K with our taxes. Our own homes that are paid for or current, are lower in value too, but who cares. That is a good socialist program. Why couldn’t the money to FannieMae in July be used for that or is it already in Frank, Dodd, Obama’s pockets.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Part of that is to help cover up the fact that many of those loans were given to illegals who didn’t have verifiable documentation.
Many of those loans were for more the initial cost of the house. The recipients got a hand full of cash. Many of them defaulted and absconded across the border. Home prices fell. Thus, the lending institutions were stuck with homes that were below the value of the original loans and a loss of the excess initial cash outlay.
Now, those lending institutions are wanting the taxpayers to share the burder and bail them out.
As another Freeper pointed out to me this morning, this bad bailout idea is already in the main bill.
SEC. 109. FORECLOSURE MITIGATION EFFORTS. (c) CONSENT TO REASONABLE LOAN MODIFICATION REQUESTS.— Upon any request arising under existing investment contracts, the Secretary shall consent, where appropriate, and considering net present value to the taxpayer, to reasonable requests for loss mitigation measures, including term extensions, rate reductions, principal write downs, increases in the proportion of loans within a trust or other structure allowed to be modified, or removal of other limitation on modifications
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
If Obama was not so damn dangerous with SCOTUS picks, I would almost prefer that he wins so this looming crisis goes around his neck. Palin can run in 2012-she has done all she can. I don't think she would be tainted by the loss-she is a rock star.
I don’t like how you keep calling him “McStupid.” It’s mean.
He’s McMentallyChallenged.
(Vote McCain/Palin)
Oh, get a grip, Amanda. Think before publishing.
I’m not advocating McCain’s plan as I don’t know what it is yet. However, a kneejerk “crap sandwich” reaction also is not advisable.
http://www.freerepublic.com/focus/news/2100340/posts?page=21#21
It’s also an approach taken in the recent HOPE legislation.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
John McCain IS the crap sandwich. These are his side orders.
If you have a $300,000 mortgage on your $200,000 house and you get it refinanced for $200,000 do you owe tax on the $100,000 gift?
bfl
Yeah and worse yet we paid our loan off. We just can’t get on the gravy train. I just know they are biased because we work!
He doesn’t. The plan, which is available on the McCainpalin.com website, clearly states that the plan is to simply direct $300bn of the existing bailout toward buying up the bad mortgages. The truth is, this would be significantly cheaper than buying out the bad MBSs and CDOs and CDSs, which will run into the tens of trillions. I had thought that a fundamental problem with the bailout is that it did not address the underlying immediate problem, which is the collapse of housing prices. Some believe it needs to collapse more, but I think with the 20-30% drop in many areas, it is starting to get oversold. I do think a better plan would be to buy up unsold new construction and demolish it.
Again, the bill is passed already. Besides, 50% of all mortgages (and something like 80% of those issued since 2006) are already backed by Fannie and Freddie, meaning that the US taxpayer was already on the hook. Since the vast majority of defaulted mortgages are already covered by Fannie and Freddie, and the McCain Plan specifically targets mortgages that are defaulting because of the inability to refinance with a collapsing price, the total number would probably be much lower than $300bn. There are also a number of qualifications set forth in the plan.
In other words, the plan is simply to direct some of the money already being appropriated towards these mortgages. I don’t like the idea of any bailout, but since it’s already a done deal, I think this approach is actually somewhat better than the crazy, almost unworkable MBS purchase plan they concocted in the end (which is far, far worse than the original Paulson proposal).
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