They'll come up with something similar for student loans.

xoneinax said:jayK said:article said:Investors who do not occupy their homes would be excludedAhh, good. "Occupy" is ill defined. An phone bill to 12345 1/2 Main St should be sufficient for proof of occupation. Gotta stop paying that payment for 90 days; timing is critical.Again, lenders are not idiots. There will be at least a basic level of investigation before people can participate in the program.

And by the way, if you intentionally stop paying your bill even though you have the means to do so, you just trashed your credit for nothing because the lender won't let you renegotiate - unless you do a very good job of hiding your assets.

skagen said:I would rather lose 30% of my [house's value] and have everybody suffer and learn rather than watching my children continue to get burdened by other peoples' mistakes - because that is what's happening.

I would argue that you're in the stark minority then. What if you put [Social Security] into that spot? Seniors would go into conniption fits. What if you put [Medicare] there? Seniors would fly into a rage. And yet, seniors are leaving their children with almost 100 trillion in future unpaid bills for those programs.

The same goes for every institutionalized welfare program, no matter how well meaning. Once it's in place, the long term sustainability is irrelevant to those on the dole, and to the politicians that hold onto power by crucifying anyone that attempts to reform the programs.

Tarajunky said:skagen said:I would rather lose 30% of my [house's value] and have everybody suffer and learn rather than watching my children continue to get burdened by other peoples' mistakes - because that is what's happening.

I would argue that you're in the stark minority then. What if you put [Social Security] into that spot? Seniors would go into conniption fits. What if you put [Medicare] there? Seniors would fly into a rage. And yet, seniors are leaving their children with almost 100 trillion in future unpaid bills for those programs.
Considering how the value of homes shot up so quickly, it isn't that big of a deal if the prices drop 30%. We all knew they would have a big dip eventually. The only people that will truly be affected are the idiots who bought a house in the last 3-4 years with the intent to sell it after 4-7 years. Easy come, easy go...

Tarajunky said:The same goes for every institutionalized welfare program, no matter how well meaning. Once it's in place, the long term sustainability is irrelevant to those on the dole, and to the politicians that hold onto power by crucifying anyone that attempts to reform the programs.
I wholeheartedly agree. There are many programs that are started with good intentions, did their job, are no longer needed, but find a way to keep getting funding. It is difficult to remove any of these programs once they are started.

The same idiots who take advantage of this bill, will need a future bailout when they again start spending more than they earn.

I understood this program to aid those who can't afford increasing payments, they would lower the payments also by cutting principal, but at the end of the mortgage or selling the house that principal would have to be paid. So, really it seems a good way to keep the housing market more stable. Especially if people could make the payments and pay the taxes etc. Think everyone wins

I should have bought a bigger house and defaulted on it instead of staying in my "I can afford this on my monthly income" house.

Or I should just buy a sign that says "sucker" and stick it on my lawn.

ToofanMail said:Private lenders don't need "permission" from the government to modify their loan terms conducive to lender's needs. Citibank, JP Morgan etc. were all doing it before the govt announced it also. Govt is specifically talking about Fannie and Freddie loans.Correct, thanks for the clarification.

I estimate the reduction in interest rate to be conservatively 4% (and hence the figure of 400B on 10 trillion of mortgages).I see the majority of renegotiation happening on ARMs that have adjusted to very high rates thanks to predatory lending, so instead of FNM/FRE getting 9-10% in interest from these people, it would get 5-6%. Of course, there would be no chance of FNM/FRE collecting on the original interest rate anyway if a foreclosure is imminent, so the $400B loss (and more) would happen anyway even if there was no renegotiation plan in place.

Mulligan said:....Where should house prices be? Look at your county assessors website for prices in 2000, then see what the price would be 8 years later with normal average house appreciation, usually around 3 or 4 percent. That should be highest sustainable prices...Around here, assessed values have no relation to actual market values. They do not increase or decrease in relation to the market, either. They're artificial numbers, used solely for taxation purposes.

I would never consider assessed value as being accurate of any real market price nor would I ever trust the government to calculate market value for me.

Consider that your scheme assumes that the 2000 assessed value was correct and that all properties appreciate at the same rate. Neither assumption is valid.Mulligan said:The problem with houses is they cost too much for the average responsible budget minded family.Do you have some data to support that? The affordability index suggests that this is not the case, that in fact, homes have continued to be more affordable over time.