Hold on to your wallets, housing speculators bailout!

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Hold on to your wallets, housing speculators bailout!

Postby platypusman » Mon Jul 28, 2008 7:14 am

Taxpayers are going to be bailing out folks like Kim in the piece below. All Kim would have had to do is caculate what her montly payments would be if the interest rate on her loan rose. I suspect if she did this before signing, she would have know $2800/month was more than she could afford. Oh well, let hard working taxpayers bail her out.


http://online.wsj.com/article/SB121719179401688061.html

Whether banks embrace the program could mean the difference between foreclosure and homeownership for people like Kimberly Cox, 37 years old. Ms. Cox refinanced the $254,000 mortgage on her New Boston, Mich. house three years ago into a mortgage that had a flat interest rate for the first two years and then switched to an adjustable rate. When rates reset a year ago, her monthly payments jumped from $2,100 to $2,800, far more than she and her husband could afford.


Some background:

http://www.telegraph.co.uk/money/main.j ... con128.xml


Fannie Mae and Freddie Mac: Congress backs rescue package
By Ambrose Evans-Pritchard
Last Updated: 8:18am BST 28/07/2008

World markets are poised for a major relief rally today after the US Congress met in a rare weekend session to pass the most far-reaching rescue package for America's financial system since Franklin Roosevelt's New Deal.
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Re: Hold on to your wallets, housing speculators bailout!

Postby RD » Mon Jul 28, 2008 8:24 am

platypusman wrote:Ms. Cox refinanced the $254,000 mortgage on her New Boston, Mich. house three years ago into a mortgage that had a flat interest rate for the first two years and then switched to an adjustable rate.

This smacks of the typical fast-talking, unscrupulous, scumbag mortgage broker.
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Re: Hold on to your wallets, housing speculators bailout!

Postby platypusman » Mon Jul 28, 2008 8:27 am

Caveat emptor!

RD I have to disagree. I suspect most people would know that an adjustable rate loan can go up and increase payments. It is irresponsible to bail someone like Kim out.
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Re: Hold on to your wallets, housing speculators bailout!

Postby fog » Mon Jul 28, 2008 9:54 am

platypusman wrote:It is irresponsible to bail someone like Kim out.


Yup, let's have millions of homeless lining the streets! :?
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Re: Hold on to your wallets, housing speculators bailout!

Postby platypusman » Mon Jul 28, 2008 10:05 am

fog wrote:
platypusman wrote:It is irresponsible to bail someone like Kim out.


Yup, let's have millions of homeless lining the streets! :?



Fog it will be painful, but when we need to cleanup the problem using market forces it will begin to get better. Having the government bailout speculators like Kim will only encourage more bad speculative behavior and penalize good people who did not have a hand in this crime.
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Re: Hold on to your wallets, housing speculators bailout!

Postby Jeannine Stergios » Mon Jul 28, 2008 1:29 pm

fog

Yup, let's have millions of homeless lining the streets


Why would they be homeless? They can go and rent an apartment for a few years and get their finances in order. This is the biggest misconception about these people who can't manage their finances. They will not be homeless - just not be homeonwers anymore. Apparently they're not responsible enough to own a home anyway.
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Re: Hold on to your wallets, housing speculators bailout!

Postby RBarnes » Mon Jul 28, 2008 1:47 pm

Last year when Bush announced a similar bailout (http://lonestartimes.com/2007/08/31/goo ... r-bailout/) there were valid arguments from the press as to why it was a bad idea.

http://efinancedirectory.com/articles/W ... _Idea.html
http://www.marketwatch.com/news/story/1 ... aspx?guid={9CE18A60-C0CF-4CB4-A38B-6AFFE1D6E37E}

Now the democrats push a similar idea and suddenly its a good idea?

The reason we continue to see these problems is because we allow these problems to continue. Look at it this way...

Mr and Ms Smith walk in to Mr Bankers office and want to buy a $400,000 home but they earn only $40,000 a year.

Mr Banker has nothing to risk since he knows that before he leaves that day for lunch that same loan will already have been sold to Freddy Mac or Fanny May earning a profit for his bank. And if the home owner defaults on the loan and the house isn't worth what it was mortgaged for, Freddy Mac and Fanny May turn to the government who simply toss tax payers dollars at them. No one really loses so the behavior isn't discouraged.
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Re: Hold on to your wallets, housing speculators bailout!

Postby Jeannine Stergios » Mon Jul 28, 2008 1:51 pm

RD

platypusman wrote:
Ms. Cox refinanced the $254,000 mortgage on her New Boston, Mich. house three years ago into a mortgage that had a flat interest rate for the first two years and then switched to an adjustable rate.

This smacks of the typical fast-talking, unscrupulous, scumbag mortgage broker.


This smacks of someone who is too stupid to have a mortgage. Having bought many homes in my life, the bottom line of any home loan is "WHAT WILL MY MONTHLY PAYMENT BE?" They gambled about the adjustable rate and lost. I took the safe route and got a fixed rate mortgage. Why is any of this the responsiblitiy of the taxpayers?

Rd, did you get fleeced on a home mortgage or something? Why are you so against mortgage brokers? OR is it the fact that they might make a decent living that has you upset at them? :shock:
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Re: Hold on to your wallets, housing speculators bailout!

Postby RD » Mon Jul 28, 2008 6:47 pm

platypusman wrote:It is irresponsible to bail someone like Kim out.

Sen. McCain supports this legislation. He said he would've voted for it if he was present for the vote.
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Re: Hold on to your wallets, housing speculators bailout!

Postby Wayne » Mon Jul 28, 2008 7:01 pm

RBarnes wrote:Now the democrats push a similar idea and suddenly its a good idea?

I don't think anyone pushed harder for this than Bernanke and Treasury Secretary Paulson. Then the Senate votes 72-13. Sounds pretty non-partisan to me.
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Re: Hold on to your wallets, housing speculators bailout!

Postby platypusman » Mon Jul 28, 2008 8:21 pm

RBarnes wrote:Last year when Bush announced a similar bailout (http://lonestartimes.com/2007/08/31/goo ... r-bailout/) there were valid arguments from the press as to why it was a bad idea.

http://efinancedirectory.com/articles/W ... _Idea.html
http://www.marketwatch.com/news/story/1 ... aspx?guid={9CE18A60-C0CF-4CB4-A38B-6AFFE1D6E37E}

Now the democrats push a similar idea and suddenly its a good idea?

The reason we continue to see these problems is because we allow these problems to continue. Look at it this way...

Mr and Ms Smith walk in to Mr Bankers office and want to buy a $400,000 home but they earn only $40,000 a year.

Mr Banker has nothing to risk since he knows that before he leaves that day for lunch that same loan will already have been sold to Freddy Mac or Fanny May earning a profit for his bank. And if the home owner defaults on the loan and the house isn't worth what it was mortgaged for, Freddy Mac and Fanny May turn to the government who simply toss tax payers dollars at them. No one really loses so the behavior isn't discouraged.


This bailout will only encourage the same behavior when the market recovers. By bailing out people who made poor decisions it tells them they can live beyond their means and Uncle Sam will pick up the tab.
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Re: Hold on to your wallets, housing speculators bailout!

Postby RD » Mon Jul 28, 2008 8:24 pm

Sen. McCain supports this legislation. He said he would've voted for it if he was present for the vote.
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Re: Hold on to your wallets, housing speculators bailout!

Postby platypusman » Mon Jul 28, 2008 9:06 pm

This action is not right! Why should people who did not speculate with ARM mortgages, who did not drain their home's equity to live the high life and paid their mortgage payments on time pay for those who did none of these?
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Re: Hold on to your wallets, housing speculators bailout!

Postby RD » Mon Jul 28, 2008 9:08 pm

Perhaps you should research to find out why Sen. McCain supports this legislation. You can contact his campaign by clicking here. Please let us know what you learn.

http://www.johnmccain.com/Contact/
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Re: Hold on to your wallets, housing speculators bailout!

Postby guesswho » Mon Jul 28, 2008 11:20 pm

RBarnes has it right.

This is less a bailout of the public who chose to take on these adjustable rate mortgages and more of a bailout of the lenders who chose to approve them.

We don't need to research why McCain supports this. We all know that he is a centrist. Unlike his competitor - Mr Obama whose record in the Senate has him rated as THE most leftist of lefties.

I'm not certain as to why abyone who claims to be an ndependent would still make pretend that they are undecided in this election. The choice is clear. You have a true centrist - much to my disliking running against a true left of lefty.

Look up the record. Would you be considering tvoting for a senator that is rated by multiple sources as the most right wing senator? I don;t think so. But here you are supporting - by most every honest account the most left wing senator out there today. I laugh at you fake independents and fake centrists. I laugh because you sleep so well at night even as you lie to your self. But its not uncommon - after all - human nature is human nature.

The good news is that while publically everyone is still 'trying to figure out' who to support - the majority will be pulling the lever for McCain.

ANd that's a positive. HAHAHA
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