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post #1 of 102 (permalink) Old 12-06-2007, 10:40 AM Thread Starter
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Exclamation The Mortgage Bailout: your thoughts

What're your thoughts on this mortgage bailout?

Last edited by DP; 12-06-2007 at 10:45 AM.
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post #2 of 102 (permalink) Old 12-06-2007, 10:46 AM
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Stupid, not right nor fair for others who have dealt with an ARM for years. He is bailing out the banks and the people that made all of these very bad credit decisions and I think he may be doing it not only becuase of where the economy is heading but where inflation is heading as well and he has probably been given a headsup if they have too raise interest rates due to inflation the people who have ARM's are screwed even more. But he needs some kind of favorable legacy........
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post #3 of 102 (permalink) Old 12-06-2007, 10:47 AM
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Isn't "the economy is doing great" and "the unemployment is at the lowest" still actual?
Some people will believe you can walk on the water.
bailout is just a tool. You use any tool you can to get the job done.
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post #4 of 102 (permalink) Old 12-06-2007, 11:05 AM
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Isn't "the economy is doing great" and "the unemployment is at the lowest" still actual?..........
That is still true, and the President is just trying to make sure it stays that way. Though I ordinarily would say keep the government out of our business, I think the repercussions of the sub-prime mess could keep our very strong economy from continuing to blossom; and if taking a small joint-action between government and banks to head off a greater slowing than already anticipated it is a prudent move. I give the President credit for doing something I suspect goes against his basic, free market, belief system.

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post #5 of 102 (permalink) Old 12-06-2007, 11:10 AM
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That is still true, and the President is just trying to make sure it stays that way. Though I ordinarily would say keep the government out of our business, I think the repercussions of the sub-prime mess could keep our very strong economy from continuing to blossom; and if taking a small joint-action between government and banks to head off a greater slowing than already anticipated it is a prudent move. I give the President credit for doing something I suspect goes against his basic, free market, belief system.
Damn Jay and I thought the DEMS played the flip-flop game good, you have mastered it..........
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post #6 of 102 (permalink) Old 12-06-2007, 11:18 AM
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I think it's a bifurcated cluster fuck. You had the speculators in the sunbelt buying preconstruction spec homes on interest only mortgages hoping to get healthy on the appreciation and they got crushed. I say fuck the greedy bastards. I said they'd get crushed a year and a half ago when I heard one of my friends tell me his cable installer had three spec homes.

Then you had the really poor people in Cleveland and Detroit who had some fast talking lying bastard wave $50,000 in their faces if they signed on the dotted line. I say track down the predatory lenders and fine the hell out of them. If the home owners who occupied the dwelling can make the teaser rate payment but can't handle the reset, freeze the rate until the loan is restructured. If they can't even make the teaser rate payment they screwed themselves.

The institutional investors who invested in CDO's (collateralized debt obligations) took a risk. They're going to take a haircut. That's the nature of investing.

CDO's are like sausage...there some good stuff in there, there's some not so good stuff in there. You don't really know what you're getting, you were taking a risk.

The big boys, Citi et al are alreading taking their write downs.

The good news is that 94% of mortgages are performing right now. I know 6% is a lot, but if you can attack that 6% and break it down so that only 3% is written off, the effect on the economy will be minimal. The real effect, using your home as an ATM machine, has already stopped and we are now in the middle of that effect on consumer confidence and consumer spending.
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post #7 of 102 (permalink) Old 12-06-2007, 11:26 AM
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I think it's a bifurcated cluster fuck. You had the speculators in the sunbelt buying preconstruction spec homes on interest only mortgages hoping to get healthy on the appreciation and they got crushed. I say fuck the greedy bastards. I said they'd get crushed a year and a half ago when I heard one of my friends tell me his cable installer had three spec homes.
Yup, they're everywhere here, and I couldn't agree more. These lots are meant for home-owners to buy and build their personal custom homes, in which they take up residence. Spec-home guys are so prevalent here, that these opportunities are substantially reduced and far more costly than they should be. They are a blight upon the system, IMO. Fuck 'em.

"If spending money you don't have is the height of stupidity, borrowing money to give it away is the height of insanity." -- anon
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post #8 of 102 (permalink) Old 12-06-2007, 11:39 AM
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Originally Posted by gerkebi View Post
I think it's a bifurcated cluster fuck. You had the speculators in the sunbelt buying preconstruction spec homes on interest only mortgages hoping to get healthy on the appreciation and they got crushed. I say fuck the greedy bastards. I said they'd get crushed a year and a half ago when I heard one of my friends tell me his cable installer had three spec homes.

Then you had the really poor people in Cleveland and Detroit who had some fast talking lying bastard wave $50,000 in their faces if they signed on the dotted line. I say track down the predatory lenders and fine the hell out of them. If the home owners who occupied the dwelling can make the teaser rate payment but can't handle the reset, freeze the rate until the loan is restructured. If they can't even make the teaser rate payment they screwed themselves.

The institutional investors who invested in CDO's (collateralized debt obligations) took a risk. They're going to take a haircut. That's the nature of investing.

CDO's are like sausage...there some good stuff in there, there's some not so good stuff in there. You don't really know what you're getting, you were taking a risk.

The big boys, Citi et al are alreading taking their write downs.

The good news is that 94% of mortgages are performing right now. I know 6% is a lot, but if you can attack that 6% and break it down so that only 3% is written off, the effect on the economy will be minimal. The real effect, using your home as an ATM machine, has already stopped and we are now in the middle of that effect on consumer confidence and consumer spending.
Excellent summary.

At this point an independent audit of the loans need to winnow out the spec buyers from the true homeowners. Freeze the rates on the homeowners until this sorts itself.

Other than the homeowners who are getting hosed the Treasury is taking a massive hit as Banks and Investors are writing off bad debt by the Quarter, keeping further tax revenue from flowing into the system.

With this freeze we are looking at about a 1 year "end of crisis" for this thing. as the final wash of borrowers who are going to default run through the system. This past quarter, Q3 again set the record for Foreclosures, defaults and past dues.

New home foreclosures hit record, late mortgage payments up - Dec. 6, 2007

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post #9 of 102 (permalink) Old 12-06-2007, 12:08 PM
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Before everyone jumps on the 'bifurcated cluster fuck' bandwagon, you might want to wait and see what actually is being proposed. I'll be surprised if the new law doesn't include solutions and requirements that address those issues which you have identified. This strikes me as the perfect opportunity to correct some problems that are inherent in the lending system.

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post #10 of 102 (permalink) Old 12-06-2007, 12:10 PM
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Quote:
Originally Posted by gerkebi View Post
I think it's a bifurcated cluster fuck. You had the speculators in the sunbelt buying preconstruction spec homes on interest only mortgages hoping to get healthy on the appreciation and they got crushed. I say fuck the greedy bastards. I said they'd get crushed a year and a half ago when I heard one of my friends tell me his cable installer had three spec homes.

Then you had the really poor people in Cleveland and Detroit who had some fast talking lying bastard wave $50,000 in their faces if they signed on the dotted line. I say track down the predatory lenders and fine the hell out of them. If the home owners who occupied the dwelling can make the teaser rate payment but can't handle the reset, freeze the rate until the loan is restructured. If they can't even make the teaser rate payment they screwed themselves.

The institutional investors who invested in CDO's (collateralized debt obligations) took a risk. They're going to take a haircut. That's the nature of investing.

CDO's are like sausage...there some good stuff in there, there's some not so good stuff in there. You don't really know what you're getting, you were taking a risk.

The big boys, Citi et al are alreading taking their write downs.

The good news is that 94% of mortgages are performing right now. I know 6% is a lot, but if you can attack that 6% and break it down so that only 3% is written off, the effect on the economy will be minimal. The real effect, using your home as an ATM machine, has already stopped and we are now in the middle of that effect on consumer confidence and consumer spending.
Excellent analysis.

It is VERY, hard to feel much sympathy for people that are spec home buyers, people that buy homes to flip, too foolish to be aware the risks of interest only loans and ARMS, or who use their houses as ATM machines, predatory lenders and sharpies who prey and foolish, greedy, naive or stupid buyers, in the business.

Jim
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