Posted on 07/14/2009 1:08:38 PM PDT by GreaterSwiss
NEW YORK, July 14 (Reuters) - U.S. government officials are weighing a plan that would let borrowers who have fallen behind on their mortgage payments avoid eviction by renting their homes instead, sources familiar with the administration's thinking said on Tuesday.
Under one idea being discussed, delinquent homeowners would surrender ownership of their homes but would continue to live in the property for several years, the sources told Reuters.
Officials are also considering whether the government should make mortgage payments on behalf of borrowers who cannot keep up with their home loans, tapping an unused portion of a $50 billion housing aid kitty.
As part of this plan, jobless borrowers might receive a housing stipend along with regular unemployment benefits, the sources said. (Reporting by Patrick Rucker; Editing by Diane Craft)
(Excerpt) Read more at reuters.com ...
“I’m paying your mortgage and all I got is this lousy t-shirt.”
That's precisely it. And when the government ponies up money for a plan like this, the money will go to the banks, not the (ex) homeowner. The banks will also have an income on defaulted properties that they don't have now.
I am not in favor of any government bailout. However, there are those here on FR who seem to have a wrong idea about many of the people in these horrible financial conditions -- especially here in California.
Many of these people were full-time, middle-to-upper-middle class people who bought a house that they could afford while the economy was chugging along; they had savings accounts and they had never been "drains on society". But first the housing market took a dive and their house wasn't even worth what they bought it for. Then they lost their jobs and there were no new jobs anywhere to replace the jobs that they lost. Then their savings and 401K's took a dive because of the stock market. In short, the economic floor fell out from under a lot of people and they couldn't make their mortgage payments.
Then, when they have no job, where are they supposed to move? And why would they move when their mortgage holder was letting them live there for free, without foreclosing, because the bank didn't want the property to run down, and the banks also didn't want to devalue the property further by pouring a new glut of foreclosures into the market.
One of my best friends, who has worked every day of her adult life, is in this circumstance. She's 60 years old and was making $250K a year a few years ago. But last year she had to declare bankruptcy and she lost her house. She was not a deadbeat. The economic floor just fell out from under her.
I agree, that as individuals, none of us should be forced to pay each others mortgage. But don't assume that everyone who is in default on their mortgage is a lazy, loser deadbeat.
When governments take actions like this, they may use "the homeowner in default" as a front for their actions, but you can bet your last dollar that legislation like this ISN'T to "help the homeowner" -- it's designed to prop up their banker buddies & make all of us pay for it.
You’re just renting whether your house is paid off or not. Try not paying property taxes for a few years and you’ll see what I mean.
I'll never forget this....
at a town hall meeting, Obama was asked "when are the job's coming back, my husband has been laid off for months ? " his answer was " the job's arent coming back, we don't want them to come back, we will replace them with new job's , green jobs, like installing smart meters in homes, problem is, right now we don't have enough electricians trained to install these meters "
I can't believe he actually said that !
Good, pt. Actually it was a lib that me 16 years ago that we all really rent from the gov in the form of property taxes...
I agree in that control of all real assets end up in the Pharaoh's hands (0 today).
However, I disagree in that Joseph was also insuring that the famine would not kill a great many and the Jews would be preserved. Today we are seeing the dismantling of America as a world power economically and militarily with the only result being a few elites in govt in control. Nothing being done today is being done to save the people, but rather to destroy them.
The actions of a few corrupt politicians and their banker buddies like angelo mozillo and countrywide screwed a lot of hardworking people. Especially in Ca, NV, Fl, and Az. People who bought at the wrong time are screwed whether they can currently afford their houses or not. The value will not recover for 10-20 years. I feel sorry for them, but Obama’s plan is merely a cynical attempt to look compansionate while actually bailing out the same a-holes who got us in this mess. That is what disgusts me.
At first I figured these guys were just ignorant. None of them have ever created any jobs, or run businesses that they built. In fact their boss's big private sector job was being a community organizer.
However, they are 7 months into their admn and they just keep doing more and more to destroy the rule of law involving commerce and the only reasonable explanation for it is they don't want a private sector.
Since when is management of personal property and finances a delegated right of the government in the Constitution?
ping
Obama is now a ‘slum lord’. Good grief.
Because we are conditioned to respond emotionally to these difficult times we don't see that by doing so we are creating the moral hazard we are seeking to avoid. On a micro scale, when we find a way for an individual to not suffer when they default on a mortgage (for whatever reason)we are under cutting the foundation of our economic system, contract law.
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Sorry, if you can't pay cash for the house, you bought more house than you can afford.
If you want to take out a mortgage anyway, that's your choice, but if you don't have the money to pay it off should the need arise, you bought more house than you could afford.
An interesting point, IIRC, between 25-30% of homes in this country are paid off.
Also, there are a sizable number of homeowners who are underwater right now who are still making good on their agreement to pay back the money they borrowed. However, they will increasingly think themselves dummies for doing so if those who don't honor their agreements don't suffer for it.
On a macro basis, why should a multinational corp worry about bad business decisions if there are no consequences. It's going to be hard, but we have to return to the pre bailout mindset.
We didn’t take out a mortgage on our house. We own it outright and paid cash for it.
We could have gone for a bigger, nicer one and had a mortgage payment, but didn’t.
I’m glad, too. We’ve been having a tough enough time making ends meet as it is. I couldn’t imagine adding a mortgage payment to the mix.
Not sure what part of the country you are in, metmom, but out here in the Sac area of California -- in CA in general -- I don't know ANYONE who buys their houses "for cash" -- short of maybe drug dealers!
Yes, there are older people who have paid off their mortgages over time -- and personally, I think that is a great goal. I am old enough to recall "mortgage burning parties", and they need to be brought back. But having a mortgage here is like having a car and a telephone. The land is just too damn expensive to buy outright, unless you bought a more expensive house, made money on selling it, and then downsized to something you could buy outright.
But that isn't the point anyway. Like I said, I don't believe in bailing people out, especially when the money goes to really bail out bankers. But, that doesn't still doesn't make many of the people who lost their homes, deadbeats at heart. Even they would have bought outright, while they would still have a roof over their heads, they also still would have lost money on the deal as the house would now be worth half of what they paid for it. It's a Catch 22, anyway you cut it.
God Bless you, that is smart money management.
I understand how people get caught up in the home trap. A young couple get married. The girl wants a nest for her family and it is status for the couple to show how well they're doing. They go and buy a house just like what Mom and Dad had (not realizing that it took Mom and Dad 20 yrs to get that house) and next thing you know every penny from every check is getting taken to pay for their status. Now a downturn in the economy hits, hours at work get cut, or worse jobs, and paying for the house just got near impossible.
Take that scenario and have the securitization market destroyed for mortgages and you have a perfect storm. The only way people can get out even, or with a little cash, is if there are buyers. The problem is there aren't buyers because getting loans is very difficult because the banks can't sell loans over 750K to a secondary market and the buyers in the secondary market below 750K are very picky.
Why are these ideas more efficient than bringing manufacturing jobs back to America?
Oh I forgot that’s not on the socialist agenda.
You wouldn’t believe the number of people on FR who criticize people like us for doing that.
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