McCain's Housing Plan: People Get Overpriced Homes For Free?

McCain's Housing Plan: People Get Overpriced Homes For Free?

www.cnbc.com

Senator McCain announced a plan last night for the Treasury to directly purchase home loans from borrowers and servicers at full price and then give the borrowers cheaper fixed-rate FHA backed loans at lower principal values; in other words, give people their overpriced homes for free.

(visit the link for the full news article)



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I searched and did not find where anyone had posted this story, if they have I apologize. Also if this is not posted in the right place feel free to move. Thanks

mmmm, I would like assistance in these days with my home as well. But, I have not gone into forclosure nor do I have an "overpriced" home. I agree that American's need help, maybe everyone should get a "new deal", instead of just some people?

I admit that something does need done, but not sure exactly what.

www.cnbc.com
(visit the link for the full news article)

'...in other words'? I disagree, it does NOT say give away for free. It says at a lower, non userious rate. It is not specific, so we don't know how high or low. Just lower than usurious. Perhaps 6,7, or 8 percent is not outrageous, but the 'points', the user fees, the late fees, they all are outrageous. If you bring it up to them that they are causeing you major problems, they are 'nice' enough to help you out in your single problem, but they don't change their highly profitable and corrupt 'policy'. Why should they? They are getting away with it.

reply to post by amazed

It's a gimmick. It will never happen because economists aren't that dumb. McCain thinks the American people are dumb (check out Sarah Palin as VP, and this latest gimmick). As McCain so proudly admits, he's a maverick, and mavericks don't have to be right.

reply to post by amazed


First i'm not a fan of any bailouts, But do you care about the story. I noticed on the link you provided the plan was not included. Do you know the plan? Do you care what it is? Or are you just looking for reactions?

The truth is it's not a "plan" it was a plan and it's in effect as of Oct. 1st.

What should have each and every fiscally-responsible home-buyer absolutely STEAMING pissed-off is the fact that borrowers who were stupid enough to live beyond their means will, almost positively, have the principal amount of their home loans reduced (by how much, who knows? I don't believe a particular amount is specified) thanks to the bailout bill.

This provision, along with the power to lower interest rates on current crappy home loans, was placed in the bailout bill by the House and remains today.

For example:
Idiot Borrower who earns $50K per year is loaned $400,000.00 by Greedy Lender, to be repaid over a 30-year period. Not long into the life of Idiot's mortgage, he realizes that he cannot afford the house he purchased. Multiply this scenario by a bunch...all hell breaks loose on the stock market.

Rather than having the POV of "we don't need no water, let the you-know-whater burn" with regard to the financial meltdown, Big Daddy Gov't steps in with yet another nail in the coffin containing our Constitution: the bailout bill.
Big Daddy says: instead of having to pay back $400,000.00, you'll only have to pay back $200,000.00 (or more, or less...who the hell knows at this point??) Big Daddy pats Idiot Borrower on the head, while those who are responsible and self-sufficient sit back and stew.

Will this principal reduction include folks who have non-toxic mortgages, or will it only be Idiot Borrowers?

My guess is only Idiot Borrowers....

Ezzi



[edit on 10-10-2008 by ezziboo]

[edit on 10-10-2008 by ezziboo]

reply to post by ezziboo


Idiot and non idiot, It's up to the current bank that holds the note. They are the one who agrees to rights down the note and get rid of it. But, with the bailout why not? Send in the reciept to the GOV. and get reimbursed.

I do not like the Gov. stepping in BUT, for those who did it right this is the only way to save the equity in there house. If not values tumble much further and they will soon possibly be in the same situation.

In fact we are and have been forced to cut of our nose to spite our face.

This plan is such a crock... so the bank gets their full price, the homeowner maybe gets to stay housed, and all of us, who had nothing to do with it, get to pick up the tab for the difference.

I'm not sure why, other than it makes too much sense, nobody is talking about this plan:

These mortgages are re-negotiated, to maintain the face amount of the loan, but the time is extended so that the homeowner can make the payments.

So you start with a 30 year mortgage, now maybe it's 50.

Then, if all goes well (HAH), and the price of the home comes back up, then it can be sold or re-financed again to a more reasonable time span.

The homeowner stays housed, the bank actually comes out ahead in the long run due to more months of interest, and those of us who did not mis-behave don't pay for it.

And if the homeowner wants to sell at any time, it's just like it is anyway... you have to pay off the mortgage before you can sell the place (this happens all the time, in the sales contract). If they can't get enough of a price to do that, well too damn bad.

reply to post by anotherdad


I see what you're saying, Anotherdad...but this is what I'm getting at:

The crux of the bailout is that the government will own failed banks. The government will also own the homes of those with mortgages sold by the failed banks.

(Idiot Borrower, along with borrowing for a home he really couldn't afford, is also guilty of being greedy, hoping to "flip" his $400,000.00 house for a higher price in a few years).

When it comes to our current system of economics, for someone to be a WINNER, someone else has to be a LOSER. I only realized this a couple of months ago (shame on me for taking so long), and it has changed my outlook on money and life in general.

Ezzi

McCain is a Fiscal Socialist...


Following in the footsteps of the biggest Fiscal Socialist in American History...

George W Bush...

From Jorge to Juan...

reply to post by ezziboo


Your concerns are well thought out, unfortunetly the media has not shared the whole story. Again i'm not agreeing or disagreeing just trying to inform.

Example: and this should answer the above poster LEGIT concern. I actually think believe it or not this was somewhat thought out.

Homeowner bought there house 2 years ago for $400 K and For arguments sake had there rate adjust and can no longer afford it. So they try to Refinance it and the bank says no way its only worth $300K now. (this is where were at.) So the new program says that the FHA backed by the Gov. will finance it for 90% of the current value or $270K. Homeowner takes that to there current note holder and they can (not forced to.) say we will accept that and both are out from under.

Now moving forward....If the homeowner sells his/her home in the first 12 months FHA/GOV keeps all the profits. 13-24 they keep 90%, 25-36 80%, 37-48 70% 49-60 60% and 50% from then on. So it is not entirely a free ride.

What is accomplished, Homeowner still in home and still paying for it. Most importantly there home is not on the market for sale because thats whats killing us right now.

And not a free pass as 50% of what they may make on the sale of there house goes back to FHA/GOV.

I may be in minor ways off on my numbers, i will find the e-mail with the new guidelines and correct any mistakes. The above accuracy is/and may be perfect. I just dont want to mislead. Although to be honest i am only am curious on correcting the 50% i feel like that may go away after say year 10.

I agree with the outrage a previous poster mentioned, with regard to paying for others 'idiotic' mistakes.

But perhaps this is the lesson Americans need to learn: we all pay for the mistakes of our idiots.

Are we our brother's keepers?

Look at the evidence: the current national debt is the direct result of the People being hoodwinked into allowing such irresponsibility.

Who is to blame for their trust? A better question: could we have better educated our fellow citizens, and avoided these sorts of problems?

While we at ATS are often fairly outspoken, consider the hypothetical of someone who did see this coming, knew convincing arguments that would inform people, but did not attempt to speak up or warn fellow citizens. Could they be considered blameless? How much less so, us -- all of us?

It is interesting to see the differing opinions here, thanks for sharing.

Personally I feel that people should be assisted if they only have one home, the one they are living in.

My family and I chose to get a loan far below what the mortgage company was telling us we qualified for, if we had not we would be in the same position as many people who are going into forclosure.

I wonder how many of you, that are calling those who are having problems "idiots" are truly aware of the loan tactics that banks and mortgage companies were using on people. I feel that these banks and mortgage companies were greedy and telling people they could afford more than they truly could, and because people want a home they can be proud of, they believed the lies they were told.

IMO these banks and mortgage companies should be held accountable, not given a bailout.

Greedy home buyer? How about the greedy, sleazy crooks who counterfeit the money to loan out? Politicians, bribed politicians, belong in prison for allowing this kind of robbery, making it 'politically correct'. Also the individuals in the FTC who allowed 'naked shorts', where people sell stocks they don't own. Many stock owners will find out soon, that they actually have ficticious stock; they lose. Thanks to the accessories to the fraud, in the FTC. It is not just the banks.

Originally posted by Gregarious
'...in other words'? I disagree, it does NOT say give away for free. It says at a lower, non userious rate.

You probably missed the point about the principal on the loan. It really amounts to a significant handout.

Here's my solution: use federal money to build spartan style family housing, no bells and whistles (basically a dorm). Let them foreclose and offer to rent this housing to displaced people at cost for some period of time, maybe buy the original house at market and hold on to it but not give it away.



[edit on 14-10-2008 by buddhasystem]

Originally posted by anotherdad
reply to post by ezziboo

 

Idiot and non idiot, It's up to the current bank that holds the note. They are the one who agrees to rights down the note and get rid of it. But, with the bailout why not? Send in the reciept to the GOV. and get reimbursed.

I do not like the Gov. stepping in BUT, for those who did it right this is the only way to save the equity in there house. If not values tumble much further and they will soon possibly be in the same situation.

In fact we are and have been forced to cut of our nose to spite our face.

Carter and Bent Billy both 'forced' those self same banks to make stupid loans to deadbeats and any others that had no intention of repaying. So in defense of the banksters, I can't believe I'm actually defending these corrupt counterfeiters, the bad loans were caused by the people bailing them out. However, the derivatives and naked shorts had nothing to do with the bad home loans. In this case, the burearats who were accessories to the fraud and robbery ought to rightly be horse whipped.

You have a choice when you go for financing the biggest investment of your life. I bought my house 4 years ago and was told I could get a bigger house with a non conventional mortgage, ie ARM or Interest Only. I opted for the smaller house, fixed interest rate realizing that this would not work out good in the long run.

So someone in the same position as me, who opted for the non traditional loan and gambled, will benefit?

I do not have any problem with negotiating interest rates, but the second you start adjusting principal owed to keep someone in their house is Ridiculous!!!

If it comes to that, it may be Torch and Pitchfork time.

What do you need for a car? A box to sit in, wheels, steering, an engine, and a banker. What do you need for a place to live? Land, a box to 'live' in, and a banker. Pretty neat to be a banker, huh? I want to stress that we don't need no stinkin banker to counterfeit money to loan out to us. The ready abundance of that counterfeit money drives up the prices, so that those paying cash can't afford it. There is not enough cash for bankers to loan out without counterfeiting, at the current inflated prices. It is all a giant scam, and the politicians who are supposedly representing us? They have all been bribed, thru the Political Action Committees, who the bankers send their bribes to, and the politicians just happened to 'legalize' this form of bribery. Legalized bribery, legalized theft. Incredible. No Hollywood writer could ever come up with a fiticious story to equal this.
What absolutely needs to be done, is to do away with banks loaning large sums and counterfeiting, and to eliminate PACs