Bush outlines mortgage help plan

Bryan · 08-31-2007, 01:29 PM

http://www.wfaa.com/sharedcontent/dw....8a57b3a1.html

The problem with the subprime issue is really 3-fold.

1) people wanting to buy more home than they can realistically afford. So they get the Adjustable Rate Mortgages and Interest-Only Loans. With this they pay just the interest for 3-5 years and then after that time the payment goes up drastically as they have to start paying back the principle. On top of that they get ARMs and their interest is reset to a higher amount because rates have risen.
2) the mortgages are lending money to people who have historically shown problems with paying back the money they borrow.
3) mortgage companies are not required to act in the best interest of their clients and place the client's interest above the interest of the mortgage company. So they knowingly recommend an ARM or Interest-Only Loan to someone who won't be able to pay more at a later time when their payment amounts go up.

What we need is a massive overhaul of the credit industry. Credit card companies are the worst. Personally, I think your limit should be tied to amount you earn in a year. A company should not be able to give a $10,000 limit to someone with no job. There is quite a bit that needs to be changed.

Ax · 08-31-2007, 01:34 PM

It's a false flag, just like Spam in a bag.

Bryan · 08-31-2007, 02:58 PM

what do you mean?

JerryLove · 08-31-2007, 05:02 PM

The concern is that, since Bush is basically cutting taxes on short-selling he is essentially offering aid for people who baught investment property and lost.

I don't know about you, but I'm more interested in helping the people who actually live in their homes keep them than those who tried to turn a fast buck in the market (and drove it up in the first place) not loosing money on their gamble.

... actually, I'm *really* interested in keeping the general economy afloat.

Bryan · 08-31-2007, 05:06 PM

Quote:

Originally Posted by JerryLove

The concern is that, since Bush is basically cutting taxes on short-selling he is essentially offering aid for people who baught investment property and lost.

I don't know about you, but I'm more interested in helping the people who actually live in their homes keep them than those who tried to turn a fast buck in the market (and drove it up in the first place) not loosing money on their gamble.

... actually, I'm *really* interested in keeping the general economy afloat.

well i'm not worried about the general economy.

TunerSteve · 08-31-2007, 05:18 PM

Quote:

Originally Posted by Bryan

What we need is a massive overhaul of the credit industry. Credit card companies are the worst. Personally, I think your limit should be tied to amount you earn in a year. A company should not be able to give a $10,000 limit to someone with no job. There is quite a bit that needs to be changed.

I agree totally. Have you heard about the "Ninja" loans, mortgage brokers were doing? It stands for No Income, No Job. They were approving loans, fully expecting those that got them to default. Then they would swoop in, foreclose on property, and reap profits on the appreciated value.

Credit cards are the worst, as you stated. I think a law should be passed to require higher minimum payments (along with credit limits tied to your income). One company I know of, charges a smaller minimum payment, than the interest payment! Meaning if the customer only pays the minimum, they will never pay off the balance, even if they never use the card again! True people need to read the fine print, but too many credit card companies prey on young people just starting college, and not fully aware of these tactics until they are in way over their heads. /rant

i feel better *sigh*

JerryLove · 08-31-2007, 10:09 PM

Quote:

well i'm not worried about the general economy.

You probably didn't loose $10k this month because of the DOW tumbling, and you likely don't own a house that you might want to sell in a market where that's all but impossible.

Both are true for me.

Jfool · 09-04-2007, 03:42 PM

Quote:

Originally Posted by Bryan

well i'm not worried about the general economy.

In general, a good general economy helps the home owner / buyer / seller. It also helps the general public whether they are saving to buy a house some day, older people who may be in a position to help their kids buy a house some day, and people who are saving to improve a house they already own. Not to mention I would like to sell my house for a decent price when I decide (or my kids decide) its time for assisted living. Yea, the general economy is pretty important to me.

normajean777 · 09-08-2007, 03:39 PM

What we really need is to stay the heck out their way. Banks who have made crappy loans need to take the punishment. If any insiders made money by looking at their crappy debt that they hold, and sold their shares in their bank, they should be charged with insider trading. But people should of had common sense not to borrow what they repay, and banks should of had common sense to not lend to people who could not repay. They will all be punished now. No one should help them out, it will be fine, since the economy is so flexible.

For the first in quite a few years, home prices stopped rising where I live. I take it as a short term correction. Even though I live in the province with the highest GDP is the developed world, I wonder if there is some weakness in the debt held by our local banks (we have a bank oligarchy). But in these prosperous times I hope they will keep strong balance sheets.

Bryan · 09-08-2007, 06:04 PM

Quote:

Originally Posted by JerryLove

You probably didn't loose $10k this month because of the DOW tumbling, and you likely don't own a house that you might want to sell in a market where that's all but impossible.

Both are true for me.

actually my portfolio is down about a 1/3 that the general market is down.

I don't own a house yet.

Bryan · 09-08-2007, 06:06 PM

Quote:

Originally Posted by Jfool

In general, a good general economy helps the home owner / buyer / seller. It also helps the general public whether they are saving to buy a house some day, older people who may be in a position to help their kids buy a house some day, and people who are saving to improve a house they already own. Not to mention I would like to sell my house for a decent price when I decide (or my kids decide) its time for assisted living. Yea, the general economy is pretty important to me.

let me say it this way. I'm not concerned with the current health of the economy right now.

Jfool · 09-10-2007, 10:11 AM

Quote:

Originally Posted by Bryan

let me say it this way. I'm not concerned with the current health of the economy right now.

I agree with you then. Economy is always cyclic. If you're going to need your cash, move it to a more conservative place according to the time frame.

JerryLove · 09-11-2007, 12:12 PM

Quote:

Originally Posted by Jfool

I agree with you then. Economy is always cyclic. If you're going to need your cash, move it to a more conservative place according to the time frame.

Cool. Where can I move the paychecks I haven't gotten yet.

You do realize "the economy" covers more than "The stock market"?