I bought a house in CA for $820,000. It’s nice but very expensive. I had no money to put down but I was told my monthly payment will be $800/month, which is difficult for me but I think I can make it. I got mail 3 weeks ago saying my payment will go up to $5,400 / month starting in Febuary of 2008. I hear now Bush will keep my monthly payment at $800/month. That’s very nice of him, now I don’t have to get a job or move. thank you. I don’t know how I could ever back to renting, that’s for the fresh illegals, not for me who’s love USofA since coming here 2 years ago.
Thank you Bush! Maybe this year you could reintroduce deductible credit card interest?
Well said. Does this plan capitalize the forgone interest rate payment ? Is the idea to push off the pain and increase debt loads (disaggregating bad teaser loans from good - those should have a pretty low market value in a few years if a firm ever thought to sell them) for 5 years ? It is the FedRes’s job to monitor mortgage banks offerings. Greenspan blew this. Like a 1% target rate wasn’t enough. Teaser rates were necessary to ‘put the economy back on track.’
People like you who accpeted these subprime loans have caused this problem should have to face the consequences of your poor decision making. This was suppose to be a lesson to the American people to not be so stupid with their finances. By Bush bailing people like you out, more scandals and financial crisis will continue to occur in this country leading to more instability in financial markets. $800 a month for 820,000 house - You gotta be freaking kidding me!!! In canada a 800 month mortgage won’t even pay for a $380,000 dollar townhouse with a significant down payment. I’m so glad to not have to deal with the poor quality of your country’s politicans and government officals.
Thanks to policy makers, we will see illegal immigrants FROM the US on shores of Shanghai in the future… slash taxes, increase spending, print more money, protect the stupid, get in the way of financial natural selection/evolution, NOTHING could go wrong!!
The guy is obviously making a joke about the lending standards and exotic mortgages that were available. You can’t get a million $ house for $800/month.
rbiren88 Wrote: ------------------------------------------------------- > People like you who accpeted these subprime loans > have caused this problem should have to face the > consequences of your poor decision making. This > was suppose to be a lesson to the American people > to not be so stupid with their finances. By Bush > bailing people like you out, more scandals and > financial crisis will continue to occur in this > country leading to more instability in financial > markets. > > $800 a month for 820,000 house - You gotta be \> freaking kidding me!!! \> \> In canada a 800 month mortgage won’t even pay for > a $380,000 dollar townhouse with a significant > down payment. I’m so glad to not have to deal with > the poor quality of your country’s politicans and > government officals. Feliz Navidad Feliz Navidad Feliz Navidad Prospero año y Felicidad
Rather than a rate freeze, they should have given homeowners in danger of forclosing the option to sell their homes short and convert what they owe into a unsecured loan at whatever rate their mortgage was going to reset to. This would help shake out the subprime loans and help home prices find a bottom.
^but the owners are “unsophisticated” and the government already believes that people can’t make their own decisions without the aid of the government. And what good is an unsecured loan to the holder? That’s just a credit card
I think MFE is but an innocent victim. Maybe there is a little greed, speculation and lack of intelligence involved. But why would someone get punished for listening to predatory loan shark for promising them that their loan payments will not rise in 2 years. Even better, that the loan can be refinanced at a lower rate. After all, that’s what everyone wants to hear.
MFE Wrote: ------------------------------------------------------- > rbiren88 Wrote: > -------------------------------------------------- > ----- > > People like you who accpeted these subprime > loans > > have caused this problem should have to face > the > > consequences of your poor decision making. This > > was suppose to be a lesson to the American > people > > to not be so stupid with their finances. By > Bush > > bailing people like you out, more scandals and > > financial crisis will continue to occur in this > > country leading to more instability in > financial > > markets. > > > > $800 a month for 820,000 house - You gotta be \> \> freaking kidding me!!! \> \> \> \> In canada a 800 month mortgage won’t even pay > for > > a $380,000 dollar townhouse with a significant > > down payment. I’m so glad to not have to deal > with > > the poor quality of your country’s politicans > and > > government officals. > > > > Feliz Navidad > Feliz Navidad > Feliz Navidad > Prospero año y Felicidad Thanks 
This is odd. After years of “don’t interfere with markets, cut taxes and have a war without paying for it, and such,” the Bush administration has finally decided on government bailout of (a few) little people? And he’s not even up for election next year. What happened to “tough love.” Personally, I think the government should get into these things, and I think the separation of owner occupied homes and speculative/flipper/second homes is a good decision. I would be inclined to have the difference between original and rate-frozen contracts capitalized and converted to an option on the equity value of the home at sale. It’s not perfect, but that would keep the answer more market-like. I think the lax loan originators are the real culprits, though the folks who bought the securitized poo from the originators probably should have sniffed at it little more before biting.
Delinquent loans increase financial pressure on servicers because they still have to make payments to investors, as well as tax payments to local governments, according to Canfield. http://money.cnn.com/2007/12/06/real_estate/Bush_plan_is_limited/index.htm?postversion=2007120614 i dont get this? maybe i should read the article again. but how is it increased financial pressure if they are using money from the gov’t to fund the difference in payments?
I hope that’s a joke, $820 wouldn’t even come close to paying the interest!
i’m still up on the air on this. the interesting thing i note is that message boards and blogs are full of people with snarky comments about all these plans, but major RMBS players seem to support them. obviously everyone is looking out for their most immediate interests; street desks and real money mortgage investors are much more concerned with some semblance of normalcy returning to their markets than 2nd order macroeconomic side effects. at the same time, the blogosphere is more focused on idealistic principles like moral hazard without realizing they might be playing chicken with a total systemic meltdown. I think the moral hazard camp has a legitimate beef. At the same time, I’m not really interested in hunting and gathering as a near-term career. As usual, the answer probably lies somewhere in the middle.
BosyBillups Wrote: ------------------------------------------------------- > ^but the owners are “unsophisticated” and the > government already believes that people can’t make > their own decisions without the aid of the > government. And what good is an unsecured loan to > the holder? That’s just a credit card I thought Bush was a Republican
Maybe he did it just to F over the next president (Democrat) 
If it involves F-ing over a Dem, Bush is all for it.
The only ones I feel sorry for are the investors who got duped by their brokers putting them into high risk lower traunche MBS. I wouldnt give ten cents if thats all it took to solve this problem. I dont own a home because I couldnt afford to the down payment and monthly payments would be to high in NYC. Most of these people that are defaulting on their loans were never going to get a traditional loan anyway. I dont see the problem here…they lose their home and they go back to renting…why should anyone be given something for nothing. When I mean something for nothing, I mean why should a borrower with a low credit rating end up making the same payments as someone who was diligent in paying their bills or saved up money to put a down payment down. Foreclose on all their owns…no special treatment. Thats the right way to do it.
I’m no expert in RMBS, but I know in CMBS, no broker would ever be able to convince you to buy a subordinate tranche if that’s not what you do already. In other words, I’d imagine the people who buy subordinate tranches are niche players who understand the risks. While alot of equity tranches probably got thrown into CDO’s and then, essentially, resold to other investors, the products aren’t something that any layman would ever invest in. If you think about it, the estimated default rate could be so high that everyone involved benefits from this, at least in the short term. Although, that does beg the question why the government would need to step in and force the issue if it were good for bondholders in the end. Oh well, I guess it pays to be a borrower…