DamnoIT said:Now a good question is how is real estae industry going to take advantage of this. Think about it, a builder or broker advertizes that anyone can buy a home with 0% apr simply by missing payments, changing jobs for a short period and only having 90% LTV. THIS WILL HAPPEN - BELIEVE ITIncorrect. Lending standards have tightened significantly, so this will not happen. The only way to take advantage of this plan is to take out a mortgage at 90%+ LTV greater than 38% of your HHI, and this type of loan is very difficult to get these days.

skagen said:We, the taxpayer, ARE the lenders now.Alright, so:

It is in the taxpayers' best interest to negotiate a lower payment if the only other option is foreclosure, even if the taxpayers have to absorb some of the cost.

jayK said:DamnoIT said:Now a good question is how is real estae industry going to take advantage of this. Think about it, a builder or broker advertizes that anyone can buy a home with 0% apr simply by missing payments, changing jobs for a short period and only having 90% LTV. THIS WILL HAPPEN - BELIEVE ITIncorrect. Lending standards have tightened significantly, so this will not happen.

Sadly, while standards have tightened, they're still a ways off thanks to the BS programs available via FHA. A friend just bought a new townhome (although in his defense, the guy didn't buy a gigantic house, he has a good job, and has a renter (or maybe two), so he SHOULD be ok). But.. how much was his downpayment? 3%

If things go in the shatter, you can bet plenty of "first time homebuyers" via FHA will be looking to suckle on the government teat for assistance.

sensia said:
The interest rate or principal amount of the loan would be reduced so that borrowers would not pay more than 38 percent of their income on housing expenses, the industry official said.

If you quote something and put it in bold, you might as well keep the original quote intact.

The interest rate would be reduced so that borrowers would not pay more than 38 percent of their income on housing expenses, the industry official said. Another option is for loans to be extended from 30 years to 40 years, and for some of the principal amount owed to be deferred.

This is a much different approach. I don't mind giving people a break on the interest rate. However, I am very much opposed discounting the principal, though. Everybody should pay back what they borrowed. And the article seems to support the approach that the principal will remain intact, just stretched over longer period.

josecuervo said:This is crap, I work and work and save and scrimp, wait to buy until I can afford it, and now the assholes who got us into this mess get bailed out with my tax dollars. I know that in the long run our economy will probably be better with a bailout, but it still burns.

In the long run, it would be better without a bailout. Let the assholes learn the lessons now. Instead, we're just breeding new assholes as they see what the govt will do.

jayK said:DamnoIT said:Now a good question is how is real estae industry going to take advantage of this. Think about it, a builder or broker advertizes that anyone can buy a home with 0% apr simply by missing payments, changing jobs for a short period and only having 90% LTV. THIS WILL HAPPEN - BELIEVE ITIncorrect. Lending standards have tightened significantly, so this will not happen. The only way to take advantage of this plan is to take out a mortgage at 90%+ LTV greater than 38% of your HHI, and this type of loan is very difficult to get these days.

Well the person can enter the position with a good job with high security and with ablity to engage this contract however after they get the home then quit thier job and not pay mortgage for 3 months and refi to 0% lock it then pick right back up right? Consider a healthcare worker (they are in high demand) they could take a hiadeous for 6 months to execute this strategy and save 10's if not 100's of thousands in interest payments.

skagen said:I don't think so, because it sets precident that continues to encourage irresponsibility.A certain percentage of people will be irresponsible regardless of government's policies.

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.There are already alternatives that let people "benefit" from overspending. This plan offers an alternative to foreclosure and BK that's financially beneficial to all parties.

I could possibly support this if 100% of any equity gains is handed back to the government on a dollar for dollar basis upon a house sale until the "forgiveness has been repaid".That could potentially be part of this plan. When I got my first FHA loan years ago, there was a recapture clause where a percentage of the increase in the value of the house would be paid back to the gov't.

HumDoHamaraDo said:Economy is like the Titanic, expecting some people to drown while others to stay relatively dry is wishful thinking. There are no lifeboats, either we avoid the iceberg or we all sink.

Tell that to the guys at the soup kitchen they have already sunk. The ship has been sailing full steam ahead while the captains are getting bailed out with yahts as we speak and we are all still passengers. If we caught those captains before they left we could put resources in the proper places to miniamize the damage but we are not catching them as they burn the place on the way out so we are heading for that iceberg without the silver spooners who have left but are still flying around like vultures picking away at the passengers on the boat while it heads for it's fate.

hope69 said:HumDoHamaraDo said:Economy is like the Titanic, expecting some people to drown while others to stay relatively dry is wishful thinking. There are no lifeboats, either we avoid the iceberg or we all sink.

Hmmm I don't know about you, but I know people that are making a killing right now. There always ways to make money, even if the economy tanks. There still people that are very well off. Its all about how you position yourself.

Do share, just shorts across the board or?

HumDoHamaraDo said:Economy is like the Titanic, expecting some people to drown while others to stay relatively dry is wishful thinking. There are no lifeboats, either we avoid the iceberg or we all sink.

Rather than open up another 86 pages, let's just have the readers refer to the same discussion on this thread

The difference now is that we have actual examples of what our govt has done with these bailouts.

1. AIG bailout - has come back for more several times, it's never enough.

2. TARP (i.e. CRAP) - the govt campaigns on one approach then ended up acting in a different way once the bill was passed. Now, the government refuses to tell us where our money is going.

3. Detroit bailout, again not saving anybody and again Detroit comes back for more.

Why do they think anything else will be different? How many more examples do we need to realize that govt doesn't fix problems like the savior everyone thinks they are? Obviously we are going to see a lot more with the political trends that are now in place.